To wrap up 2023, Mediaweek is looking at the biggest trends, events, platforms, and brands of the year. Welcome to Mediaweek’s A to Z of 2023 … and beyond.
By Jon Bird, executive director, VMLY&R Commerce
The stats are undeniably impressive. In 2023, global retail e-commerce sales were expected to top USD$6.3 trillion, up 10.4% on last year. By 2026, that figure will have climbed to $8.1 trillion. This year, over 20% of purchases will be made online, rising to 24% by 2026. E-commerce has created retail behemoths, with 37.8% of all e-comm sales in the US taking place on Amazon, and over 50% of online purchases in China happening on Alibaba.
And that’s before you get to “digital-influenced retail sales” – the total of purchases made online, with those that are researched on the internet and then bought in a physical store. Forrester forecasts that in the US, digital-influenced retail sales’ share of total turnover will grow to 70% by 2027.
E-commerce is History
For all that, “e-commerce” itself is a redundant term. Short for “electronic commerce”, the word was conceived in 1984, and conjures up the idea of transactions made on websites via desktop computers. That’s all well and good, but it excludes the myriad of commerce possibilities available today and is blind to the holistic concept of commerce that can take place anywhere at any time in the consumer journey. Indeed, if we were to keep “e-commerce” today, it should be redefined as “everywhere-commerce”, or “expansive-commerce”.
As Beth Ann Kaminkow, global CEO of VMLY&R Commerce said back in 2021, “It’s time to drop the ‘e’ in e-commerce fast…increasingly, purchases are made through a combination of digital and real-world activity and the lines that once separated the two have blurred.”
What’s Next?
So, if it’s time to retire e-commerce on its 40th anniversary next year, what comes next? Plain and simple, we should embrace the word “commerce” on its own, but we need to have a much richer understanding of the components of commerce, and its creative potential.
Let’s focus on the two biggest trends for 2024 – Livestreaming Commerce and Social Commerce – and the most important application, Creative Commerce.
China Shows The Way
If you want to see where commerce is headed, you need to look East. In China, commerce is mobile-first, with over half of all online sales made on smartphones.
In excess of 25% of those sales are via livestreaming commerce, which will total close to USD$100 billion this year with about 750 million livestreaming users across the country, or more than half the population. Think of livestreaming commerce as a kind of interactive modern version of QVC or the Home Shopping Network – influencers host their own shows or channels where they spruik their favourite products, and the audience can comment and purchase live. The format has created celebrities who sold billions of dollars of products, and led to a rush of everyday influencers keen to cash in.
Livestreaming commerce ladders up to Social Commerce, which is ubiquitous in China – last year, around 84% of Chinese consumers shopped on social media platforms. The big players are Douyin (China’s TikTok) and Pinduoduo, which is a group buying model with a motto of “Together More Savings More Fun”.
The tidal wave of livestreaming and social commerce is washing up on Western shores. “TikTok Shop” has launched in the US and UK with many more markets to come. Amazon has built its own TikTok-like shopping feed, called “Amazon Inspire” which is now US-only, but will no doubt make its way to other markets.
The Unifying Factor – Creative Commerce
The hallmarks of commerce in China – and where it’s headed in the West – is that it must be immersive, interactive, and entertaining. As Beth Ann Kaminkow told Little Black Book, “Commerce is opening up and is this incredible canvas of creativity…it’s disrupting marketing as we know it, and in a really inspiring, incredible way.”
So, in 2024, drop the “e” in “e-commerce”, be open to livestreaming, social and all the amazing new kinds of commerce available, and think holistically and creatively. The potential and the payoff are both massive.
See also: Mediaweek’s A to Z of 2023: F is for Free TV
Top image: Jon Bird