E-commerce и AdTech: The Future and Innovations

Every year, an increasing number of people prefer to shop online. By 2040, 94% of all retail purchases in the world are expected to be made online. This sector is not only expanding quickly, but also changing rapidly. To keep up with key trends and adapt to an ever-changing environment, it's critical to understand what changes have already occurred and what can be expected in the future. In this article, we will look at how e-commerce and AdTech have evolved in recent years, and how this has influenced advertising strategies.

How E-commerce is Changing

Let's delve into the technologies that retailers are currently implementing and developing, and what we can expect in the near future.

Growing Importance of Mobile E-Commerce

Mobile app purchases are becoming increasingly popular worldwide, and Russia is no exception. According to "Mediascope," Russia had 98.6 million internet users in 2022. The majority of users access the internet via mobile phone—65% do so on a daily basis, and this figure is growing year after year. Therefore, mobile commerce is gaining more importance and becoming a priority for retailers.

When we talk about mobile e-commerce, we don't just mean purchases made on smartphones or tablets, but also the use of mobile devices in stores. The industry has long embraced mobile solutions that enable brands to interact with customers in both physical and digital formats, manage inventory, and monitor stock levels. Tablets and smartwatches can be used as barcode readers and task managers thanks to their integration with scanners and accessories.

Artificial Intelligence (AI)

AI is already widely used in shopping applications. For example, in the retail industry, artificial intelligence aids in pricing optimization and demand forecasting. However, AI is increasingly being used for personalizing the shopping experience. While retailers currently use customer data to provide more accurate product recommendations, the number of virtual assistants and stylists who can select clothing, accessories, and products based on each customer's preferences will grow.

For example, virtual assistants such as ShopAI.app, Buysmart.ai, and ShopWithAI use AI to have in-depth conversations with customers to understand their needs, preferences, and financial requirements for a purchase in order to find the best product in each case. When chatting with Shop.app AI, you must answer the assistant's questions to narrow your search field so that the recommendation engine can offer a product set that meets all of your needs. The assistants come in a variety of formats, including apps and browser extensions, and serve a variety of purposes. While some, like ShopWithAI, focus exclusively on clothes, others, like Spendless, can assist with lower-cost purchases.

Augmented Reality

The boundaries between online and offline shopping are gradually blurring as AR and VR technologies are implemented. You don't have to leave your house to try on an item or see how furniture looks in your space.

IKEA, for example, has launched the IKEA Place app, which uses Augmented Reality technology to place real-life 3D models of IKEA furniture in a room. This allows customers to see how different IKEA furniture pieces will look in their living space to ensure they make the best decision. For the company, this app helps reduce the number of returns due to size or style mismatches.

Unsuccessful online purchases are frequently the result of photos in online stores failing to accurately depict how an item will look on a real person. Even if the model's image in the catalog is appealing, it does not guarantee that it will fit the buyer's features and style.

Sephora, for example, offers an AR-powered Virtual Artist app that allows customers to try on makeup virtually. It allows you to try different combinations of beauty products such as lipsticks, eyeshadows, and foundations to see how they work together. This approach allows customers to purchase cosmetic products that they actually need.

Another example of an augmented reality application is ASOS' "See My Fit" tool, which allows users to visualize how a specific clothing piece will fit them. So, the experience of virtual fitting offers huge advantages — firstly, app users experience fewer disappointments from unsuccessful purchases and unnecessary expenses, and secondly, online stores see fewer returns and unclaimed orders.

AR has the potential to be used "behind the scenes," particularly in warehouses and distribution centers. 3D visualization aids in the proper distribution of goods and the training of on-site teams.

Blockchain

Blockchain has been one of the most widely discussed technologies in recent years. In the near future, blockchain could play a significant role in transforming e-commerce, thanks to its capacity to greatly increase the transparency and traceability of payments. Additionally, this payment method simplifies GDPR and CCPA compliance and reduces administrative costs for retailers. Online store Overstock has been a pioneer in Blockchain introduction in e-commerce, starting to accept Bitcoin as payment method in 2014. Since then they have also begun using it for improving supply chain operations and inventory management.

Seamless (Omni-channel) Shopping

The term omni-channel refers to a product that is sold and promoted simultaneously across multiple platforms, such as websites, marketplaces, and physical stores. Needless to say, this approach is effective at increasing sales and brand recognition. Sellers strive to make shopping as pleasant and convenient as possible for customers, and seamless shopping serves this purpose well. It gives customers more flexibility because they can now try on shoes in an offline store, ensure they fit, and then place an order on a marketplace where the price is usually the best.

Nike has been actively creating digital channels to communicate with consumers and advertise its goods without shutting stores. As a result, anyone can now have a comprehensive user experience by communicating with the brand directly. If you need shoes, you can look up all of the options and reviews on Nike's website before going to a retail store and purchasing the exact pair you need.

Voice Shopping

Amazon introduced the Echo smart speaker in 2014, and since then, the percentage of Americans who use voice search functions on a daily basis has surpassed the 50% threshold for the entire US population. Amazon, Alibaba, Walmart, and other major retailers have already implemented voice shopping in their online hypermarkets. In e-commerce, voice interfaces are used to increase the average check due to new behavioral trends, rather than to attract new customers. These could include orders placed on the go, ordering familiar products that do not require selection because they are well known, and personalized offers from a voice assistant for a specific consumer.

AdTech Trends

Let's take a look at the world of advertising, see what trends are gaining traction, and how they relate. First and foremost, recent global changes have had an impact on the advertising market. The changes are related to the 2020 pandemic, the resulting global geopolitical instability, and the exit of major advertisers from the Russian market. Nonetheless, the Russian advertising market was stable in 2023, with some sectors showing growth.

E-commerce as New Media

The AdTech industry has also evolved as a result of changing consumer behavior. E-commerce platforms and marketplaces have emerged as new media platforms in high demand, so one of the major trends in this area is the development of their own advertising services. Yandex.Market, Ozon, Aliexpress, and Wildberries have already entered the game. As this trend gains traction, other participants will inevitably join them.

In-App

As smartphones have become the primary means by which users spend their time and money, advertisers are increasing their investment in In-App. The main advantage of this type of advertising is the wide range of advertising formats available, including Rewarded Video, Interstitial, and Full Screen Video.

Video Advertising

Advertising in video format, as well as the use of artificial intelligence for targeted audience engagement, are becoming increasingly popular. This is because, in the past, video advertising was prohibitively expensive for small and medium-sized businesses, but now even high-quality videos can be produced without significant investment. Previously, companies filmed commercials for television; however, YouTube Shorts, Reels, TikTok, and VK Clips have recently emerged as the most popular platforms.

First-party data

Cookie files are a thing of the past, which means companies need to collect their own data. This has a significant advantage because first-party data provides a more complete picture of the target audience's interests and characteristics, allowing advertisers to create a more personalized experience. The importance of effectively collecting and using one's own data will only grow in the future.

Finally, it is important to note that, despite the rapidly changing context, the Russian advertising market is successfully adapting to current realities. New strategies emerge, and old methods and tools are being replaced by newer, often more effective ones.