Many of these answers can be found in Mary Meeker’s Internet Trends 2018 report. The guide takes an in-depth look into every element of online commerce that impacts retail today and in the very near future. It covers the state of e-commerce in 2018, its growth trajectory, and how consumers are engaging with merchants and shopping online.
Meeker’s report is broken down at length in 294 slides. We know, that’s a lot of slides. To streamline the data, and to give you the info you care about most, we’ve done the digging to provide a deeper analysis of what the report means for merchants.
Strong E-commerce Growth Continues
Good news for online retailers: e-commerce is alive and well. In fact, Meeker’s report indicates that the U.S. saw a 16% year-over-year growth in the e-commerce market in 2017. In terms of sales, that figure is up roughly 18% to approximately $45 billion.
E-commerce is also accounting for more of a percentage of overall retail sales, too. While brick-and-mortar still has a dominating presence, e-commerce accounted for 13% of total retail sales in 2017. Compared to ten years ago, this is roughly an 8% swing — a figure that has been steadily climbing each year.
Search is a Major Driver of Success
This statement probably isn’t all that shocking to most retailers, but when you look at the stats, it’s pretty clear why Amazon is still the top dog. Amazon now accounts for 28% of all e-commerce gross merchandise value. This is up 8% from 2013. Those figures amount to $129 billion in gross merchandise volume (GMV) — up from $52 billion GMV in just four years.
What’s driving this massive growth? The giant’s ability to quickly and easily have its products located by online shoppers. Amazon managed to dominate its way into the top of search engines, while also leveraging its own search functions to keep customers better engaged. They keep shoppers happy by allowing them to customize how they’d like to search for products on their site. The same customization is being made possible through search engines like Google.
To convert customers, you must find creative ways to make your products visible in a crowded marketplace.
Meeker’s report indicated that 49% of shoppers begin their product search on Amazon, while 36% start by using a search engine, and 15% reported starting on other sources. The report also pointed toward a growing trend in how consumers are finding products via search. This includes traditional organic search, paid search options, Google Shopping, and product listing ads. Retailers are offering more data-driven personalized offers by leveraging technology capabilities that better match consumers with products that fit their desired search.
Shopping Experiences are Becoming More Personalized
Shoppers today want more from online shopping, and merchants are delivering through the application of better, more interactive technology. From the ability to search online for items in store, to live coupons and personalized deals, tailoring the online experience to meet consumer demand is a trend that’s not going away.
Other key functionalities, such as the ability to view and share product recommendations, personalized product offers, and the option to customize how one chooses to shop across e-commerce channels are also becoming more seamless. Meeker’s report specifically highlighted services like Instacart as drivers of the personalization trend.
And personalization is not just limited to browsing. Personalized payment options that meet individual consumers’ needs are well on their way. Instant financing solutions, like Klarna’s Financing, allow e-comm retailers to offer different financing options with flexible month-to-month payments, enhancing the personalized shopping experience.
Social Media is Leading to More Product Discovery
Personalized offers are also growing through more channels. Facebook and Instagram have offered merchants new outlets to target customers. Thanks to more sophisticated search technology, merchants are able to better pair products with customers who are more likely to engage with that specific item based on their own search interests.
According to Meeker’s Report, 55% of consumers bought a product online after finding it on social media. Within that figure, 11% bought online immediately. This insight highlights the importance of effective social media advertising for keeping customers engaged with a specific product. Social continues to be another popular channel for e-commerce merchants looking to boost GMV, with referrals up in the first quarter of 2018 to 8%.
E-Commerce Storefront Builders Drive Rapid GMV Growth
For merchants wanting to sell items online, platforms like Shopify have been a major contributor. Meeker’s report indicates that Shopify has had a sharp growth in active merchants on a global scale, which is now hovering above the 600,000 mark. Merchants on the platform now produce roughly $45 billion in GMV annually.
Payment APIs, improved fraud protection, and the ability to offer instant financing have been major factors in this growth. The ability to integrate purchase financing into checkout has become a driving trend. Along with financing, the ability to seamlessly pair better online customer support has enhanced the overall online shopping experience.
Meeker’s report points toward key trends and insights into the state of e-commerce in 2018 and how rapidly the market is evolving. For merchants who embrace the trends noted above, you’ll be well equipped to better engage customers heading into 2019.
Are you ready to enhance your e-commerce strategy and drive more online sales? Klarna helps your brand create smoooth shopping experiences by giving your customers options to pay how they want, when they want. Get in touch to learn how you can stay ahead of the e-commerce trends.