Commerce is complex and diverse, and merchants have different needs depending on their scale, what they sell and where they are in the world. Developers hold the key to removing this complexity and solving these problems for merchants, as they are driving the pace of change in commerce. When you go deep on these elements, you’ll find there are billion-dollar industries waiting to be developed within each of them.
SaaS is capturing massive amounts of VC attention and funding around the world: Klaviyo raised $200 million in Boston, as did Yotpo in NYC; Bold Commerce raised $27 million in Canada; Xentral raised $20 million in Germany; and Holded raised $18 million in Spain, just to name a few.
Based on the shifting needs of merchants, there are four areas where developers should spend time building to take advantage of these burgeoning billion-dollar industries.
Conversations are the lifeblood of commerce. SMS marketing in particular is an area that has seen monumental growth in recent years, and hit warp speed in 2020. That’s no surprise when you consider that the average person spends about four hours a day on their phone. Text messages have a 95% to 99% open rate, and 75% of consumers are OK with receiving messages from brands after they’ve opted in. In fact, 50% of the top 1,000 online retailers are already using SMS marketing. Itzy Ritzy, a brand that sells new-born products, used SMSBump to try its hand at this tactic, and has driven its abandoned cart recovery rate up to 19% — achieving a return on investment north of 26,000%.
It’s clear that the future of commerce is commerce everywhere, sleekly integrated so that it’s there when you need it and gone when you don’t. Increasingly, that includes mobile. Other mobile-first areas like social media have already started to integrate with commerce; we’ve seen the rise of social commerce on platforms where consumers are already spending time for connection and entertainment, like on TikTok and Instagram.
This empowers business owners to become content creators, give their brand a voice and sell a product. It’s only a matter of time before commerce and SMS meet head-on, to move beyond marketing and into selling. Platforms like WhatsApp are experimenting with shoppable messages, but the space continues to be ripe for innovation.
Bringing real life online
Last year, many retailers looked to replicate offline experiences online. And now, even as stores open back up, there’s been a permanent shift in consumer behaviour: Retailers will continue to experiment with technology to bring the in-store shopping experience online. Video, 3D and AR are great ways to do this. People want to see the couch in their living room before they buy it; they want to view the product from all angles.
Retailers surveyed reported conversion increases of more than 50%, with 25% larger average order sizes, when they used 3D and AR assets on their sites. It’s clear that video converts far higher than static images; consumers connect better with a layered experience that includes sound and moving imagery. Plus, AR/VR technology is becoming more and more accessible. Even the iPhone is compatible with this tech now.
Social commerce is everywhere
Content and commerce are coming together to power the creator economy. While this trend is not new, it is gaining incredible speed. Commerce is popping up on every social platform, including TikTok, where people can now make their videos shoppable with a Shopify integration. This is not a passing trend, this is a new way that people want to shop — especially young people.
Our Future of Commerce report found that 54% of younger consumers discover brands on social media, and 28% of them have purchased via social media. From February 2020 to February 2021, installs of Shopify’s social commerce channels grew by 76%. Watch this space, and build for it. It’s so powerful that it’s even fuelling our fourth area of opportunity.
An explosion in live-selling
Livestreaming is already a booming market, projected to reach nearly $224 billion by 2028. Such a large, captive audience is the perfect fit for commerce. Live-selling has been popular in China for some time, with sales projected to reach half a trillion dollars by 2023. North America is behind the curve, but not for long. We’ve seen steady live-selling growth in North America, presenting an upended retail industry the opportunity to breathe new life into businesses. With live-selling, a store becomes a studio, and staff members take on the role of brand advocates. This space is also a clear opportunity to work with influencers who have mastered the art of social commerce. In the future, merchants will need technology that helps them rethink their physical space in the digital world, giving them yet another asset they can leverage to reach their customers.
For people watching, live-selling is a way to feel part of something. There’s an element of scarcity, too: If a particular offer is available for a short period of time or with limited inventory, live-selling can promote a frenzied sense of urgency to make the purchase right now. For retailers, live-selling is a great way to collect real-time feedback from potential buyers: “This product is great, do you have it in red?” Some companies are already taking advantage of the potential in this space: Montreal-based livestreaming platform Livescale grew its revenue tenfold from March 2020 to January 2021.
There are near limitless opportunities for developers in 2021. Retail is ripe for building, and now is the perfect time to start.
Feature Image Credit: NurPhoto/Getty Images
By Fatima Yusuf
Fatima Yusuf is the director of partnerships for Shopify’s app developer ecosystem.