Trends - Cart-Power

8 Ideas for Utilizing Neural Networks in an Online Store

Ksenia Cheburova — Wed, 24 Apr 2024 11:45:27 +0000

In today’s rapidly evolving world, neurotechnology is advancing at a rapid pace, with one particularly intriguing domain being the integration of neural networks within the realm of e-commerce. These neural networks are already being extensively employed to address diverse challenges encountered in the management of online stores and marketplaces. One prominent application involves analyzing user interactions on websites to enhance the purchasing journey and refine service quality. However, the utility of neural networks extends beyond this. In this article, we’ll explore 8 distinct ways neural networks can be leveraged to optimize the performance of an online store or marketplace.

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1. Generating Product Descriptions

Utilizing neural networks can expedite the process of populating product cards. For instance, they can autonomously craft descriptions based on available product attributes or draw from existing content sources. Alternatively, a neural network can sift through customer reviews and descriptions of similar products to generate novel and distinctive descriptions. This streamlines the workload for copywriters, allowing them to allocate their time to other critical tasks.

Alibaba Group, a prominent global online retailer, actively harnesses artificial intelligence to generate product descriptions and titles across their platforms such as Taobao, Tmall, and Mei. Within Alibaba Group, a neural network has been developed capable of generating up to 20 thousand lines of text per second. For sellers, this process is remarkably straightforward: they simply input a product page link and choose the desired style of output. Subsequently, the program autonomously generates product characteristics and crafts a corresponding description in Chinese.

2. Generating Pictures

One promising field involves generating marketing materials without the need for designers. Tools like MidJourney, ChatGPT-4, DALL-E can produce images based on textual descriptions, simplifying the creation process for websites, advertisements, banners, and catalogs.

To streamline time and resources, companies can employ neural networks such as PixelIDTGAN to automatically generate product photos. This algorithm enables the creation of images featuring clothing on models without requiring studios or photographers.

An emerging trend gaining traction in the industry is substituting real models with AI-generated avatars. Levi’s, for instance, collaborated with the startup Lalaland.ai, employing avatars that emulate various body types, ages, and skin tones. This allows shoppers to virtually try on clothes, enhancing interactivity and personalization in the online shopping experience, akin to virtual try-ons in The Sims.

This advancement is anticipated to boost sales conversion rates as customers can visualize how items fit them specifically, fostering a more informed purchasing decision.

3. Negative Feedback Handling

Neural networks prove invaluable in handling feedback efficiently. They can swiftly and adeptly address negative reviews or comments by delivering personalized and polite responses. For instance, a neural network can autonomously assess the tone and content of a comment, generating a fitting reply without human intervention. This feature proves particularly advantageous in scenarios where managing each review manually becomes time-intensive due to a high volume of work.

Furthermore, proprietors of large SMM channels can leverage neural networks to maintain active engagement with subscribers. For instance, responding to comments on posts often necessitates detailed and attentive replies. The neural network is adept at crafting such responses, taking into account the context and ensuring a friendly, respectful tone. For instance, it can be prompted to “Craft a response to this comment, considering its content, and maintain a friendly, respectful tone.”

4. SEO

Leveraging ChatGPT can address various SEO challenges, streamlining processes and saving valuable time.

For instance, a neural network can adeptly generate meta tags like Titles and Descriptions, along with crafting unique titles for site pages. It ensures the inclusion of relevant keywords while adhering to length requirements. Moreover, ChatGPT simplifies the task of clustering queries by organizing them based on relevance. It also excels in rephrasing content to prevent duplication and evade search engine filters.

Another critical application of neural networks in SEO involves content generation for websites. ChatGPT proves instrumental in producing texts for basic page content, particularly beneficial when managing substantial workloads. However, it’s essential to note that the generated texts necessitate verification, adjustments, and additions to align with audience needs.

5. Advertising Creatives Creation

Neural networks allow companies to quickly and efficiently create attractive advertising creatives, as well as experiment with new ideas and concepts, which helps increase audience engagement and brand promotion.

Neural networks can write text for an advertisement. Suppose we need text for advertising on Instagram. To do this, we can send a request to generate advertising text, indicating the topic, desired volume and call to action.

Upon receiving multiple text alternatives from the neural network, we have the flexibility to choose the most fitting one, make necessary modifications if required, or request additional options. This process allows us to swiftly generate fresh ideas for a successful advertising campaign within seconds.

6. Personalization

Since 2018, there has been a discernible shift towards hyper-personalization in marketing. Consumers are no longer content with generic advertisements targeting broad audiences; instead, they seek individualized offers. Manual processing of all clients, especially for large companies with extensive databases, proves to be inefficient.

Neural networks tailored for business purposes possess the capability to analyze vast amounts of data and discern patterns. This enables companies to automatically provide pertinent products and services to their clientele. For instance, Netflix’s recommendation service occupies a significant 80% of content viewing time.

The operational process involving neural networks for business typically entails uploading data into a database (accessible via developer-provided access), followed by its analysis and storage. When a customer poses a query such as “What to give a girl for her birthday,” artificial intelligence initiates a search within the database and suggests several product options for women. Detailed descriptions of products within the catalog are crucial for ensuring accurate recommendations.

7. Analytics and Forecasting

Neural networks are pivotal in analytics and forecasting within e-commerce. They facilitate the prediction of product demand, market trends, and optimal pricing strategies.

These networks are adept at predicting demand for goods by leveraging historical sales data, weather patterns, holiday occurrences, and other pertinent factors. This capability enables businesses to streamline inventory management, mitigate shortages or surpluses, and enhance customer satisfaction.

An illustrative instance of neural network utilization for analytics and forecasting in e-commerce is evident on the Amazon platform. Amazon’s neural networks scrutinize vast datasets encompassing purchases, user behaviors, and product attributes.

For instance, if Amazon seeks to forecast demand for electronics during holiday sales, like Black Friday, the neural network can analyze previous years’ electronics sales data, accounting for variables such as pricing, promotions, seasonal fluctuations, advertising campaigns, and even weather conditions.

Based on this analysis, the neural network constructs a demand forecasting model for diverse product categories. This empowers Amazon to optimize its product assortment, inventory management, and marketing strategies. For instance, the company can tailor its offers and promotions to align with forecasted demand, maximizing revenue and meeting customer expectations.

8. AI-driven Chatbots and Technical Support

AI-driven chatbots represent a vital tool for enhancing customer engagement by mimicking live interactions with managers, yet without the constraints of a rigid script. Neural networks also serve as technical support, furnishing product information and usage instructions by simply accessing technical documentation.

The integration of neural networks leads to heightened service satisfaction and cost reductions for the technical support department. Live operators are only indispensable for addressing intricate issues.

Consider these specific examples:

Personalized service in chatbots: By scrutinizing a customer’s purchase history, a chatbot can recommend products or services tailored to their preferences.
Automated problem-solving in technical support: AI chatbots analyze customer problem descriptions and propose suitable solutions drawn from the company’s knowledge base or past encounters.
Anticipating customer needs: Chatbots discern when a customer shows inclination towards purchasing a particular product, thereby offering relevant recommendations.
Automatic categorization of queries: Chatbots identify the problem category a customer’s query pertains to (e.g., technical issues, delivery inquiries) and route it to the appropriate specialist.
Data-informed chatbot training: AI enables chatbots to undergo training based on customer interaction data, enabling them to evolve into more intelligent problem solvers and information providers over time.

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Key Considerations When Working with Neural Networks

Neural networks are powerful tools that can greatly improve business performance. However, maximizing their potential requires careful consideration of several key factors.

View neural networks as aides, not substitutes for human input. While they excel at expediting routine tasks, they often necessitate additional refinement of the outcomes.
Clearly articulate your requests. When formulating queries for neural networks, strive for precision and specificity. For instance, if you’re seeking to generate titles for products in your store, provide explicit guidelines: “Craft a title for the ‘Red Stark Cobra Bike,’ emphasizing its lightweight and speed.” Providing contextual details enhances the accuracy of the results.
Be prepared to refine the outputs. Working with neural networks may yield unexpected outcomes. For instance, when using them to generate product descriptions, anticipate non-traditional phrasing. Thus, readiness to tailor the results to align with your style and requirements is crucial.
Factor in costs. While contemplating the use of neural networks, weigh not only the potential benefits but also the associated expenses. For instance, if considering paid services for data analysis and demand forecasting, assess whether the investment is justified and what outcomes are feasible.

Overall, leveraging neural networks in e-commerce holds significant promise. These networks have the potential to automate business operations and facilitate growth within the dynamic online marketplace. Nevertheless, it’s crucial to recognize that achieving success demands thorough examination and customization of the outcomes to align with the unique requirements of your business.

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2024 E-Commerce Trends: Effective Strategies for Selling Apparel Online

Ksenia Cheburova — Mon, 26 Feb 2024 11:26:52 +0000

E-commerce has become a critical sales channel for companies of all sizes within the fashion industry. Small players are joining marketplaces as sellers, while larger companies are establishing their own online platforms. Furthermore, fashion brands are increasingly launching their own virtual stores. With competition intensifying, it’s essential to continuously analyze the market, monitor trends, and adjust strategies to remain competitive. Our findings encompass compelling statistics and insights on the evolution of e-fashion, alongside crucial trends and strategies for initiating a clothing sales platform.

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E-fashion Statistics

Global e-fashion revenue projected to grow from $821 billion in 2023 to $1.222 trillion by 2027, according to Statista forecasts.

Several factors contribute to the ongoing expansion of the industry:

The global market is broadening, with substantial focus on China, India, and Southeast Asian nations.
Internet accessibility has significantly increased, particularly with the widespread adoption of smartphones in developing countries.
The proportion of the middle class is on the rise.
Constant emergence of new innovative technologies.
Low barriers to entry in the online sphere, leading to a proliferation of online stores and fashion marketplaces.

Demand for various products, including footwear, apparel, handbags, and luxury goods, is witnessing growth.

According to the Statista report, the majority of consumers favor making their purchases from the websites of specific retailers and brands (20% of respondents). Additionally, online marketplaces are popular, with 15% of respondents indicating Amazon as their preferred platform for fashion product purchases, and another 10% choosing other marketplaces. Choosing a Niche and Platform for Your Clothing and Footwear Marketplace Launch.

Trend 1: Global Digitalization

Lately, there has been a notable shift in the technologies utilized for shopping and engaging with brands in the e-fashion realm. McKinsey’s research emphasizes the increasing significance of digitalization in the fashion industry, with a focus on enhancing user convenience. Both established and emerging brands are directing substantial investments into their online platforms, harnessing big data and e-commerce analytics to craft tailored experiences for consumers.

For instance, numerous brands employ algorithms to scrutinize customer preferences and furnish personalized recommendations built on user behavior. Moreover, certain companies are introducing virtual fitting rooms, enabling customers to visualize clothing before making a purchase through augmented reality technology.

In summary, the level of investment in digitalization has currently reached an unprecedented peak and is anticipated to continue flourishing across all industries based on various metrics.

Trend 2: A Shift Towards Sustainable Growth

An increasing number of consumers are showing a concern for the planet’s future and environmental sustainability. Brands that prioritize environmental sustainability and adopt a pro-environmental stance are gaining significant attention from consumers.

In the realm of e-fashion, this is being manifested through the implementation of environmental standards. Numerous online clothing retailers are placing greater emphasis on producing eco-friendly clothing, minimizing waste, and utilizing eco-friendly packaging.

Adidas serves as an excellent illustration of this trend, as they utilize plastic waste to create materials for their shoes and clothing. Another case in point is Chanel, which has invested in a startup called Evolved by Nature, focused on replacing synthetic additives with environmentally friendly alternatives.

As environmental awareness grows, the demand for sustainable shopping options is on the rise. Second-hand markets offer an eco-friendly alternative to fast fashion and contribute to a circular economy. Is launching a second-hand apparel marketplace worth It? Read in the article.

Trend 3: Voice Search

As technology progresses, previously unimaginable opportunities are now becoming a reality. For instance, the ability to multitask by preparing food and shopping for clothes simultaneously, which was once considered unattainable, is now feasible due to technological advancements.

Virtual assistants are significantly impacting people’s daily routines. Nielsen reports that one in four U.S. households utilize intelligent voice assistants like Amazon Alexa or Apple Siri, which are now being employed for making purchases.

Gartner indicates that brands that tailor their online platforms for voice search can potentially boost profits by as much as 30%.

To improve the likelihood of your website appearing in search results for voice searches, adhere to these recommendations:

Incorporate long-tail keywords and interrogative sentences within your texts and meta tags.
Include a section containing frequently asked questions (FAQ).
Generate more conversational content.

Trend 4: Personalization

As per research conducted by SmarterHQ:

80% of consumers are more inclined to buy from a brand that offers personalized experiences.
90% of buyers are open to sharing their behavioral data in exchange for benefits that make shopping more affordable or convenient.
On average, 71% of shoppers feel frustrated when their purchases lack a personalized touch.
89% of digital companies, including Coca-Cola, Netflix, Sephora, USAA, and Wells Fargo, are investing in personalization.

Personalization has the potential to reduce customer acquisition costs by 50%, increase revenue by 5-15%, and improve marketing expense efficiency by 10-30%. By analyzing user behavior on an online platform, businesses can create tailored shopping experiences for each customer. The personalization process can commence with customization of featured products but can extend well beyond that.

Consider the ASOS website as an example. When customers browse or buy men’s clothing, there is an expectation that they would be interested in related content. Upon their next visit to the site, these shoppers will encounter a personalized home page tailored to their interests.

Trend 5: Influencer Marketing

In e-fashion, influencer marketing is extensively utilized as a strategy to captivate the target audience by leveraging the popularity of individuals who have established followings on social networks or their own platforms. According to the 2019 Influencer Marketing Report, one in every four sponsored posts pertains to fashion. Influencers possess the ability to generate interest in specific products and engage their audience, thereby facilitating the promotion of fashion brands’ products.

The process unfolds as follows:

Search and selection of influencers: Companies and brands scout for bloggers, influencers, or celebrities with an audience that aligns with the target product group.
Establishing collaborations: Brands form agreements with influencers to host product-related content on their platforms.
Content creation: Influencers craft varied content such as product reviews, styling, and photos or videos showcasing the brand’s products.
Publishing and Promotion: The curated content is shared across influencers’ platforms, effectively capturing the attention of their audience towards the product and brand.

Trend 6: Social Media

Using social media is an effective method to advertise fashion brands, particularly those that sell products online. The consumer can place an order on the platform that is most convenient for them at the time of purchase. While in 2021-2022, the primary sales channels in e-commerce were marketplaces and proprietary online stores, by 2023, they will be supplemented by social networks, instant messengers, and classifieds sites.

Through social media, it is possible to build a distinctive brand and foster connections with customers. Consumers are more inclined to purchase from a brand they are familiar with and have confidence in.

Social media presents an opportunity to engage with customers by addressing their inquiries and providing assistance. This enables brands to enhance accessibility and responsiveness, potentially leading to heightened customer loyalty and sales.

Social media can be utilized for conducting surveys and gathering feedback from customers to understand their preferences and needs. This, in turn, can aid in enhancing the products and services offered by the brand.

Furthermore, social media has the capacity to amplify website traffic by drawing more individuals to the brand through advertising, compelling content, and collaboration with other brands.

Trend 7: Blogs

Blogs serve as an effective means to engage with your audience and disseminate information about your brand, company updates, and other relevant content.

They offer the opportunity to develop style guides, appraise new collections, conduct interviews with fashion experts, provide valuable tips to retain existing customers, and attract new ones as well.

Trend 8: Buy now, pay later

The use of buy now, pay later services for clothing purchases is gaining traction, enabling shoppers to divide their purchases into equal payments without incurring additional costs. Shoppers can easily apply for an installment plan within minutes on the website at the time of checkout.

Trend 9: Email Newsletters

Mindbox, in collaboration with Out of Cloud, conducted a study examining the influence of email campaigns on the revenue of fashion companies in 2022. The analysis involved the study of 746 million mailings from 33 companies, representing local and federal fashion brands.

The research yielded the following findings:

Email newsletters contributed 7 to 18% of the companies’ revenue over the year.
The conversion rate for mailings from large companies was 6 times higher than that of medium-sized companies, and 9.5 times higher than that of small companies.
The conversion rate for triggered mailings for orders was 3.5 times higher, with open and click rates being 2 times higher.
In 2022, the rate of unsubscribes was minimal, not exceeding 0.5%. Typically, customers unsubscribed after receiving an anticipated lucrative offer.

The integration of suitable add-ons can significantly enhance the store’s performance by introducing new features, enhancing existing ones, streamlining management, and boosting marketing effectiveness. We have curated a selection of 10 specialized add-ons tailored for clothing and shoe stores on CS-Cart.

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Key Findings

Embrace digitalization without fear.
Showcase sustainability as a priority.
Prioritize emerging technologies like voice search and mobile commerce.
Ensure all communication is personalized.
Consider leveraging expertise, social media, and blogging to enhance your brand image.

There is a wealth of details to delve into regarding each of these aspects, and we intend to revisit these topics in subsequent articles. Building an effective clothing sales platform demands diligence and expertise. We are committed to assisting you at every phase and simplifying the process.

The post 2024 E-Commerce Trends: Effective Strategies for Selling Apparel Online first appeared on Cart-Power.

Inspiring Innovations and Technologies: 7 Key Web Design Trends for 2024

Sergey Rogov — Tue, 06 Feb 2024 13:02:44 +0000

Just like other design disciplines, web design keeps up with technology, user choices, and market needs. Our UX/UI designer has pinpointed 7 influential trends that are shaping web design in 2024. Gain inspiration from these trends and integrate them into your ecommerce projects.

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1. Heatmaps: Focusing on User Experience

Web designers are increasingly utilizing heatmaps to improve the user experience. Heat maps are warm and cold shades that create a visual dynamic effect and draw attention to certain areas and topics.

2. Botany: Integrating Natural Elements in Design

A rising trend among web designers involves the integration of floral components into their designs to craft distinctive and appealing interfaces. Incorporating natural textures, organic shapes, and colors creates a warm and inviting aesthetic for websites.

3. Typography: Dynamic Fonts for Navigation

This trend involves the use of large fonts on walls, interiors and other surfaces to navigate and create an atmosphere. Large and expressive letters become not only a means of communication, but also a part of the overall design, introducing new textural and visual elements into it.

In UX design, a variety of typographic solutions allows designers to emphasize the individuality and uniqueness of each project. Large and expressive fonts are now in the trend of website design. Their main task is navigation, that is, to share the importance of the content on the page and manage the user’s attention.

4. Geometry: Simplicity and Adaptability of Shapes

The simplicity and versatility of geometric shapes have remained relevant in web design for several years now. Geometric elements can be the basis of the design structure, and play the role of important accents, adding a modern minimalistic character to it. The advantage of geometry is that such elements are easily adapted to various devices and screens.

5. The Golden Age: Opulence and Sophistication in Design

Incorporating golden hues into web design bestows sites with a luxurious and refined appearance. The fusion of gold with black or other neutral colors yields elegant and captivating interfaces that immediately captivate user attention.

6. Kinetic Typography: Animated Visual Engagement

This trend is characterized by the use of deformed fonts to create animation and playfulness in the design. The text becomes lively and dynamic, attracting the attention of users.

7. Artificial Intelligence and Personalization

Machine learning algorithms facilitate the development of personalized interfaces that adapt to individual user preferences and behavior, thereby delivering a more pertinent and user-centric user experience.

Neural networks are also used to create sketches, search for assets and inspiration. However, it is important to understand that neural networks do not replace the designer, but serve as a tool for his creativity.

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In 2024, all trends are crafted to fulfill the expanding user demands for interfaces while also mirroring technological advancements. The outcome is a distinctive, practical, and captivating web presence.

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Exploring E-Commerce in Southern Europe: Is Launching a Business Worthwhile?

Ksenia Cheburova — Mon, 27 Nov 2023 15:14:14 +0000

Southern Europe ranks second in e-commerce market volume, trailing behind leading Western European countries. However, the region holds greater potential for the expansion of online businesses. In this article, we will explore the fundamental statistics of the area, as well as the potential and distinctive features of the three largest countries: Italy, Spain, and Greece.

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Key Findings

The region holds the second position in B2C turnover within Europe, following closely behind Western Europe.
The rising popularity of omnichannel approaches is evident, as consumers increasingly anticipate seamless integration between offline and online channels.
The usage of mobile devices for sales traffic is on the rise, leading retailers to adjust their sales strategies to ensure a positive shopping experience on smartphones.
The significance of social commerce is growing, with social media platforms directly integrating online shopping tools.
Market leaders in the region include Amazon and Shein, with a combined total sales exceeding 6 billion dollars.

Comparison to Other European Regions

The region comprises several countries, namely Cyprus, Greece, Italy, Malta, Portugal and Spain.

Based on the 2022 report from the European Ecommerce Foundation, 89% of the Eastern European population utilizes the Internet, with 64% engaging in online purchases. These statistics represent average figures across European regions.

In 2022, Southern Europe contributed to 16% of the overall B2C turnover in Europe, ranking second only to Western European countries.

Regional Overview

In Southern Europe, the number of Internet users has been steadily increasing. Moreover, the percentage of online shoppers experienced continuous growth until 2021, however, a 2% decline was observed in 2022. This shift is attributed to heightened consumer wariness regarding expenditure, influenced by inflation and the European crisis. However, the European Ecommerce Foundation predicts a revival in the number of online shoppers in 2023, with an anticipated increase to 68%.

According to Statista’s projections, Southern European countries are demonstrating substantial growth rates in e-commerce volumes. Here are a few examples:

In Spain, the e-commerce market is expected to reach 42 billion euros by 2023 and 63 billion euros by 2027, with an annual growth rate of 10.62%.
In Italy, the e-commerce market is anticipated to amount to 55 billion euros by 2023 and 89 billion euros by 2027, boasting an annual growth rate of 12.63%.
In Portugal, the e-commerce market is projected to reach 6.1 billion euros in 2023 and 9.8 billion euros by 2027, exhibiting an annual growth rate of 12.52%.

Prospects

Limited competitive presence: Due to the relatively sluggish pace of digital transformation in comparison to other regions, Southern Europe offers substantial market opportunities for online merchants.
Cross-border online commerce: Consumers in Southern Europe exhibit a keen interest in advantageous offers from other nations, with Chinese trading platforms and online stores from the UK and Germany commanding significant popularity. Analysts attribute the predominance of Chinese marketplaces to the inflationary conditions in Europe.
E-commerce website quality: Local online retailers in Southern Europe continue to exhibit technological shortcomings. Aside from major corporations like Inditex (Zara, Pull & Bear, Stradivarius) and global marketplaces like Amazon, the majority of websites lack modernity, feature limited product ranges, and have a scarcity of shopping apps. For further insights on seizing these market niches, refer to our article “Comprehensive Overview of Vertical Marketplaces: How to Create”.

Italy

Statistics Overview

Italy, the third largest economy in Europe, is anticipated to achieve a total turnover of 75.89 billion dollars in 2023, representing 2.26% of the GDP, as per Casaleggio Associati’s e-commerce report. In comparison to 2022, the turnover experienced an 18.6% increase, with a significant portion of this growth attributed to the escalation in prices. The e-commerce sector is expected to sustain its expansion, with a growth rate of 12.63%, culminating in an estimated market size of 96.79 billion dollars by 2027.

In 2022, 86% of the population in Italy utilized the Internet, and 57% engaged in online shopping. Forecasts indicate a resurgence of this figure to pre-crisis levels, reaching 62% in 2023.

Most Italian online shoppers prefer purchasing from multi-channel retailers that integrate both online and offline resources, particularly within the fashion and beauty sectors. Statista reports that over 20% of Italian consumers utilized apps or websites to make purchases at physical retail outlets in 2020.

Furthermore, mobile e-commerce is on the rise in Italy. According to a survey by the advertising platform Criteo, over 50% of transactions are conducted via mobile devices, notably among individuals aged 35 to 44.

Popular Categories

In Italy, the fashion sector maintains its status as the leading product category in terms of e-commerce revenue. This segment exhibited the most substantial growth in 2022 and contributed to 22% of the total online sales.

As per a Casaleggio Associati study, although total sales declined across most sectors in 2023, the turnover saw a rise owing to increased prices.

Payment Methods

The bank card ranks as the most widely used online payment method, constituting over 33% of transactions. Following closely behind, electronic wallets account for 32% of transactions, securing the second position.

An esteemed payment service provider, Jiffy, boasts a user base exceeding 5 million. This service seamlessly links the bank account’s IBAN code to the user’s phone number. In addition, Bancomat Pay and Satispay rank as prevalent mobile payment systems in Italy. Both of these services provide mobile applications enabling users to link their bank accounts and conduct digital transactions for products and services.

Key Players

According to ECDB, the sales volume rankings of the top five largest online stores are as follows:

Amazon.it (5,202.7 million dollars).
Shein.com (887.4 million dollars).
Apple.com (862.0 million dollars).
Zalando.it.
Unieuro.it.

Trends

Consumer rights protection:

In 2023, Italy enacted the Comprehensive Consumer Protection Directive, imposing fresh obligations on transparency in information sharing for online payments, reviews, discounts, search result visibility on trading websites, and safeguarding against unfair commercial practices. Businesses are required to adapt their operations to comply with these new stipulations to avoid facing fines and penalties.

Product repair popularity:

The EU’s policy on product reparability has impacted the Italian market, fueling a heightened demand for repair services. This influence has prompted certain Italian e-commerce enterprises to prioritize product repairs and refurbishments over the sale of new items.

“Green consumption”:

There is an escalating demand for eco-friendly products and sustainability in marketing and delivery. This is evidenced by the use of electric vehicles and bicycle couriers in major cities, real-time route optimization, which not only aids in reducing carbon emissions but also alleviates traffic congestion and shortens delivery times in densely populated urban locales.

Technological investments:

Significant e-commerce firms are directing investments toward artificial intelligence tools to enhance delivery processes, analyze customer data, and develop more personalized products and services. In the fashion sector, companies are actively pioneering virtual fitting rooms. These technological advancements are poised to minimize the rate of product returns.

D2C growth:

The D2C (direct-to-consumer) model has gained prominence across various sectors such as fashion, furniture, food, and cosmetics. Even food startups are leveraging D2C strategies to directly offer organic and high-quality products to consumers.

Digital payments:

The adoption of digital payments is on the rise, with a growing number of consumers utilizing QR codes and digital wallets for transactions.

Preference for local brands:

Italian consumers exhibit a strong affinity toward their local culture and heritage, often favoring local businesses. This preference has given rise to the expansion of marketplaces and e-commerce platforms specializing in local Italian products and brands.

Luxury goods demand:

Luxury goods are in high demand, with numerous platforms offering upscale fashion, jewelry, and home decor from renowned Italian and international brands.

Spain

Statistics Overview

The e-commerce market reached an estimated 72 billion euros in 2022, marking a 25% increase from the previous year (as stated by CNMC). Spanish experts project further growth in 2023, anticipating a 20% rise in e-commerce gross sales.

In 2022, Internet usage was recorded at 95% of the population, with 72% engaging in online shopping. Forecasts suggest that this figure will surge to 76% in 2023.

Online trading significantly contributes to the Spanish economy, with consumer spending in e-commerce representing nearly 6% of the country’s GDP in 2022, marking one of the highest rates in Europe. Positive growth trends in e-retail revenue are projected through 2027, particularly with a notable surge in new customers observed among food retailers.

Small and medium-sized enterprises (SMEs) are integral to the Spanish economy, constituting 99% of the business landscape, totaling 2.8 million enterprises. Although 75% of Spanish SMEs have an online presence, only a third are actively involved in e-commerce. The government’s “Digital Spain 2026” initiative aims to foster digital advancement among SMEs through funding programs, training initiatives, and digital literacy workshops. The government is dedicated to elevating Spain’s global standing in e-commerce and fortifying economic sustainability.

Popular Categories

In 2022, fashion shopping gained significant popularity in Spain, emerging as the leading e-commerce category with a market share of 27%. Electronics and media products constituted a quarter of the e-commerce market, while food and personal care products accounted for 19%.

According to Statista Digital Market Insights, the electronics segment is projected to dominate in 2023, amounting to over 9 million dollars. Concurrently, the fashion sector is expected to experience substantial growth in the coming years, ultimately surpassing electronics by 2027.

Payment Methods

Over 50% of buyers favor bank cards, while 40% opt for digital wallets, including PayPal, Bizum, and Buy Now Pay. The prevalence of e-wallet usage is anticipated to experience substantial growth in the upcoming years, as the proportion of individuals opting to pay by card is projected to decrease by 2025.

Despite the popularity of Visa and other international payment methods over local options, there is an emphasis on promoting the widespread adoption of Open Banking in the country in the near future. Online banking penetration in Spain reached 65% in 2021.

Key Players

According to ECDB, the sales volume rankings of the top five largest online stores are as follows:

Amazon.es (5,279.7 million dollars).
Elcorteingles.es (1,394.1 million dollars).
Shein.com. (1,142.2 million dollars).
Apple.com.
Carrefour.es.

Drivers of Growth

As per Statista, the primary factors propelling the growth of e-commerce in Spain are:

Convenient delivery is a key preference for the majority of consumers, who favor direct home delivery and the ability to shop at any time, particularly given the typical closure of supermarkets and hypermarkets on Sundays and during siesta on weekdays.

New technologies such as AI and virtual reality play a significant role. According to a 2022 survey on online shopping attitudes, approximately a quarter of respondents expressed a desire to physically interact with products before making a purchase, while 16% are open to utilizing augmented and virtual reality technologies if the opportunity arises.

Social commerce is also prominent, with over 50% of sellers in Spain anticipated to utilize Facebook for commercial purposes by 2023, along with 46% on Instagram. Additionally, merchants widely employ WhatsApp and YouTube, each being utilized in approximately 33% of cases.

Greece

Statistics Overview

In 2022, 84% of the population were Internet users, with 70% engaging in online shopping. The latter figure is expected to rise to 75% in 2023. In 2021, Greek e-commerce achieved a revenue of 3.6 billion dollars, demonstrating a growth rate of approximately 20%.

The majority of Greek consumers (91%) favor purchasing goods from domestic online stores. Furthermore, over a third of individuals engage in cross-border transactions, with the majority occurring within the EU. Among Greeks who made online purchases within the last three months, 27% did so at least once, while 38% did so on a regular basis (six or more times).

Popular Categories

Fashion accounts for 33% of e-commerce revenues.
Food and personal care products make up 24%.
Electronics represent 21%.
Toys, hobbies, and DIY contribute 12%.
Furniture and household appliances account for 10%.

Payment Methods

PPRO reports that in Greece, debit and credit cards are the most commonly used payment method, accounting for 49% of transactions. Following closely is cash on delivery at 24%, with e-wallets making up 16% of transactions.

Other payment methods, including installments and cryptocurrencies, collectively comprise only 1% of all online transactions in Greece. This stands in contrast to other regions where cash has largely been supplanted by new payment methods.

Key Players

According to ECDB, the sales volume rankings of the top five largest online stores are as follows:

Shein.com (162.7 million dollars).
Public.gr (129.0 million dollars).
Plaisio.gr (90.2 million dollars).
Zara.com.
Hm.com.

Trends

The prevalence of microbusinesses:

Greece’s economic framework is predominantly characterized by SMEs, particularly micro-enterprises with fewer than 10 employees, representing 94.6% of all enterprises in the country. To enhance e-commerce in the region, digitalization and support for SMEs are essential.

Gradual technological advancement:

Greece’s shift toward digital technologies aligns with broader pan-European trends. While the country has historically lagged behind more advanced nations, it is now making gradual progress.

Harmonization and disparity with the EU:

Greece shares strong ties with the EU in social and e-commerce aspects, including Big Data. However, it lags in the advancement and implementation of cloud services and artificial intelligence. The state supports e-commerce development through reforms, subsidized programs, and digital literacy training.

Shift to digital payments:

The popularity of e-wallets is progressively increasing, indicating a shift in purchasing behavior. According to a consumer survey, the most anticipated changes on websites include the introduction of convenient payment methods.

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Unlocking the Potential: Assessing the E-commerce Landscape in Eastern Europe

Ksenia Cheburova — Tue, 21 Nov 2023 14:17:05 +0000

In recent years, Eastern Europe has witnessed a surge in e-commerce, presenting ample prospects for business growth. This review delves into the distinguishing statistics of this region compared to the rest of Europe and explores the unique attributes of specific countries.

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Key Findings

E-commerce in Eastern Europe is in a phase of significant growth, with immense potential yet to be fully realized. Despite the remarkable expansion observed in 2020, the market remains relatively immature compared to other European regions in terms of volume. However, specific countries within the region exhibit the highest e-commerce growth rates in Europe.

The ongoing digital revolution and the prevalence of a youthful population are exerting a positive influence on the region’s development. Estimates indicate that by 2025, e-commerce will constitute approximately 16% of the total retail trade. This progression is expected to give rise to new business models, commercial ecosystems, and innovative distribution channels.

Moreover, there is a noticeable evolution towards omnichannel approaches in response to the escalating demand, as retailers experiment with diverse delivery and omnichannel strategies.

Furthermore, marketplaces have emerged as influential leaders in the realm of e-commerce. Many brands have embraced marketplace models as a means of navigating the challenges posed by the pandemic, and this approach is advancing more rapidly than traditional trade, aligning with global trends.

Comparison to Other European Regions

The region includes: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Montenegro, North Macedonia, Romania, Serbia, Ukraine, Moldova, Belarus.

According to the European Ecommerce Foundation’s 2022 report, 88% of the Eastern European population uses the Internet, with 48% engaging in online purchases. These figures represent the lowest indicators among all European regions.

Regional Overview

The majority of Eastern European countries trail behind the rest of Europe in terms of both internet usage and online shopping participation.

Yet, when examining these metrics over a five-year period, it becomes evident that the region holds promise. Projections from the European Ecommerce Foundation suggest that the number of online shoppers in Eastern Europe will surge to 62% by 2023.

While Eastern Europe may lag behind Western and Northern Europe in market volume, it excels in terms of growth rates. As per ECDB, Serbia leads the top 10 in this regard. Serbia’s e-commerce is projected to expand by 23.6% between 2022 and 2026, which is twice the European average, and it is expected to reach a market value of $1.4 billion by 2026.

Belarus (21%), Bulgaria (20.5%), and Romania (19.6%) are also among the top ten most promising countries in terms of e-commerce growth rates. Despite their impressive growth rates, these countries are currently not positioned to compete with the leading European countries in terms of overall market volume. However, they do hold promising prospects and offer numerous untapped opportunities. The rapid progression of e-commerce is influenced by factors such as digitalization, the advent of the 5G network, and the impact of the coronavirus. Furthermore, there is a gradual increase in digital literacy among the population in Eastern European countries, and digital payment methods are gaining popularity.

According to Statista, Romania leads the region in terms of the volume of the B2C e-commerce market in 2022, with an estimated value of $10.8 billion, followed by Ukraine with $5.1 billion, and Bulgaria with $1.3 billion.

Serbia Overview

Serbia boasts a relatively high percentage of internet users, standing at 84%, a figure comparable to that of many European countries. Statistics reveal that in 2021, only 53% of consumers in Serbia engaged in online purchases. However, by 2022, this figure had ascended by 10% to reach 63%. This increase can be attributed to Serbia’s relatively youthful population, with 72% of all online shoppers falling within the 25 to 54 age bracket. Consequently, the e-commerce market in Serbia is poised for continued rapid growth.

As previously noted, Serbia takes the lead among European nations in terms of growth rates, with its e-commerce projected to expand by 23.6% from 2022 to 2026, resulting in a market size of $1.4 billion.

Popular Categories

Toys, hobbies, DIY (28%)
Fashion (24%)
Furniture (18%)
Food and personal care (17%)
Electronics (13%)

As per ECDB in 2022, the Serbian e-commerce market featured the top five largest online stores, which were:

Gigatron.rs ($47.9 million in revenue).
Tehnomanija.rs ($43.8 million in revenue).
Bcgroup-online.com ($36.5 million in revenue).
Ikea.com.
Fashionandfriends.com.

The market is dominated by the three largest online stores, which collectively represent 26.2% of the market share.

Romania Overview

In 2022, the online trading sector in Romania experienced an 11% upsurge compared to 2021, achieving a market size of $10.8 billion. Statista predicts that the market will demonstrate a compound annual growth rate (CAGR) of 16% from 2022 to 2025.

In 2022, 89% of the Romanian population accessed the Internet, and 51% engaged in online purchases. Despite 87% predominantly utilizing mobile phones for Internet access, more than half of online transactions, about 54%, were carried out using desktops. According to the GPeC study, nearly a third of Romanians, approximately 27%, favor purchasing from Chinese retailers, establishing AliExpress as the leading international marketplace in Romania.

Current Trends

Legislative Updates: The Romanian government is in the process of crafting measures to boost e-commerce development, including the implementation of an electronic identification system, the introduction of digital ID cards, and the establishment of a regulatory framework for electronic signatures.
Sustainability Initiatives: There is a noticeable shift towards greater environmental sustainability, with investments in logistics and the electrification of transport driving the growth of the C2C (consumer to consumer) market.
Technological Advancements: According to a PwC survey, approximately three-quarters of Romanian companies are transitioning to cloud solutions and have intentions to enhance their capabilities in areas such as data analytics, cybersecurity, artificial intelligence, and machine learning.
Sales Expansion: Despite substantial economic and geopolitical challenges, online retailers in Romania have experienced sales growth. This increase has been linked to heightened engagement from rural consumers, adaptable delivery and payment alternatives, and improved internet accessibility in rural regions.

Popular Categories

Fashion (40%)
Electronics and media (26%)
Food and personal care (14%)
Toys, hobbies and DIY (12%)
Furniture and appliances (8%)

As per ECDB in 2022, the Romanian e-commerce market featured the top five largest online stores, which were:

Emag.ro ($845.3 million in revenue).
Drmax.ro ($204.7 million in revenue).
Philips.ro ($182.6 million in revenue).
Fashiondays.ro.
Farmaciatei.ro.

The market is dominated by the three largest online stores, which collectively represent 29.4% of the market share.

Bulgaria Overview

The e-commerce revenue in Bulgaria amounted to $1.3 billion in 2022. Projections indicate that the e-commerce market in Bulgaria will grow to $1.588 billion by 2025. Presently, the share of B2C e-commerce in the total GDP is 2.14%, which is half of the European average.

In 2022, 83% of the Bulgarian population accessed the Internet, and 49% engaged in online purchases. The preference for purchasing from domestic sellers was prominent, with 96% of the population favoring national sellers, while cross-border sales constituted 36% of the transactions.

Despite over 60% of the population using smartphones, Statista’s data for 2022 indicates that the majority of online purchases, approximately 59%, were carried out using desktop devices.

Current Trends

Technological Advancements: E-commerce players in Bulgaria are guided by international trends in the use of technologies: artificial intelligence, machine learning, virtual reality, and Big Data. These technologies are widely used in marketing to automate recommendations, personalized content, and chatbots.
D2C Expansion: The surge in direct-to-consumer sales and subscription-based purchases is a noteworthy trend in Bulgarian e-commerce, particularly within the household chemicals and fast-moving consumer goods (FMCG) sector.
Market Dynamics: Major marketplaces and online retailers continue to dominate the Bulgarian e-commerce landscape. Despite many small and medium-sized enterprises maintaining their independent online stores, they also leverage marketplaces to extend their sales channels.
Sustainable Consumption: Increasing numbers of consumers are expressing interest in environmentally friendly products, compelling companies to revamp their product offerings and adopt more environmentally conscious shipping and packaging methods.

Popular Categories

Fashion (34%)
Electronics and media (30%)
Toys, hobbies and DIY (15%)
Furniture and appliances (13%)
Food and personal care (8%)

As per ECDB in 2022, the Bulgarian e-commerce market featured the top five largest online stores, which were:

Emag.bg ($333.9 million in revenue).
Technopolis.bg ($46 million in revenue).
Obuvki.bg ($43.7 million in revenue).
HM.com,
Fashiondays.bg.

The market is dominated by the three largest online stores, which collectively represent 32.8% of the market share.

Ukraine Overview

In 2022, the e-commerce sector in Ukraine achieved a revenue of $5.1 billion. Projections indicate that the market size is anticipated to surpass $7 billion by 2025, displaying an annual growth rate of 18.76%.

In 2022, 90% of the Ukrainian population accessed the Internet, while only 57% engaged in online purchases. Analyzing the trend over a 5-year span reveals that even the pandemic did not significantly drive the growth of online shopping. Nonetheless, forecasts indicate that by 2023, the proportion of online shoppers is expected to rise to 73%.

Popular Categories

Electronics and media (27%)
Fashion (26%)
Furniture and appliances (20%)
Toys, hobbies and DIY (15%)
Food and personal care (12%)

As per ECDB in 2022, the Ukrainian e-commerce market featured the top five largest online stores, which were:

Rozetka.com.ua ($246.2 million in revenue).
Apple.com ($108.9 million in revenue).
Makeup.com.ua ($46.3 million in revenue).
Answear.ua.
Comfy.ua.

The market is dominated by the three largest online stores, which collectively represent 38.9% of the market share.

Croatia Overview

Statista forecasts that Croatia’s e-commerce volume is poised to attain $1.18 billion in 2023, with an anticipated annual growth rate of 9.73% continuing through 2028.

In 2022, 83% of Croatians accessed the internet, and 68% engaged in online shopping, with 36% making monthly online purchases. Furthermore, 98% of the population in Croatia uses smartphones to access the internet, signifying their expected prominence as the primary device for online shopping.

Popular Categories

Fashion (39%)
Electronics and media (26%)
Toys, hobbies and DIY (14%)
Furniture and appliances (12%)
Food and personal care (9%)

As per ECDB in 2022, the Croatian e-commerce market featured the top five largest online stores, which were:

Ekupi.hr ($54.8 million in revenue).
Pevex.hr ($45.4 million in revenue).
Konzum.hr ($43.1 million in revenue).
Aboutyour.hr.
Notino.hr.

The market is dominated by the three largest online stores, which collectively represent 43.1% of the market share.

Popular Payment Methods

As per Statista’s report, approximately 50% of e-commerce transactions in Eastern Europe were conducted using bank cards by 2022. E-wallets and bank transfers also emerged as popular payment methods, accounting for 24% and 15% of transactions, respectively.

Forecasts suggest that the utilization of digital wallets is projected to rise to 29.9% by 2024. This anticipated growth is attributed to the active use of smartphones by the younger demographic in Eastern Europe, leading to a preference for more convenient payment options.

Common Payment Methods in Eastern European Countries are:

Mastercard (most countries)
Visa (most countries)
PayPal (Bulgaria, Belarus, Ukraine)
Paysafecard (Romania)
Maestro (Moldova, Belarus)
American Express (Croatia)
Privat24 (Ukraine)

Сhallenges and Risks

Logistical Challenges:

The transport infrastructure, encompassing road, rail, and air networks, exhibits subpar quality compared to the rest of Europe and necessitates further enhancements.

Underperforming D2C Market:

Direct-to-consumer (D2C) sales from manufacturers to consumers lack popularity in most Eastern European countries (with the exception of Bulgaria), despite holding potential, particularly within the fashion and fast-moving consumer goods (FMCG) sectors. To foster the expansion of the D2C market, resolving logistical obstacles is imperative, ensuring swift and cost-effective goods delivery to customers.

Legislative Underdevelopment in Environmental Practices, Returns, and Recycling:

Several Eastern European countries, being relatively new to the EU, have nascent legislations pertaining to ecological issues, return policies, and recycling practices. Inadequate adherence to consumer protection laws results in a lack of accountability for product durability, waste management, and environmental conservation by manufacturers and retailers. Non-governmental organizations advocate for sustainable and environmentally friendly consumption and production to address these challenges.

Adoption Hurdles for Modern Technologies:

While small and medium-sized enterprises have a strong presence in the online market, establishing their own digital storefronts or partnering with marketplaces, they encounter obstacles in embracing modern technologies, such as ChatGPT, machine learning, and other AI-driven solutions. The implementation of disruptive technologies is impeded by funding shortages, inadequate digital skills, and gaps in legislation, hindering substantial transformations within local Eastern European markets.

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The post Unlocking the Potential: Assessing the E-commerce Landscape in Eastern Europe first appeared on Cart-Power.