E-commerce Trends in 2024: What Brands Need to Know

Fueled by a surge in online shopping, the global e-commerce market is projected to reach a staggering £4.9 trillion in 2024. On one hand, the potential of groundbreaking technologies like virtual reality, augmented reality, and artificial intelligence to revolutionise how businesses buy and sell is immense and promising. 

On the other hand, economic realities like reduced purchasing power and rising costs force many businesses to focus on immediate needs. So, where does the future of e-commerce lie? 

This article examines the key E-commerce trends in 2024, exploring how large corporations and smaller players can navigate this exciting yet complex landscape.

E-commerce in 2022 navigated economic headwinds with value-conscious consumers prioritising deals and delaying non-essential purchases. However, innovation thrived with personalised shopping experiences through AI, AR, and VR, while sustainable e-commerce gained traction as consumers embraced eco-friendly practices. 

Personalisation became key, with retailers leveraging data for tailored recommendations. Social media boomed as a shopping platform, and mobile dominance necessitated mobile-first approaches. 

Seamless integration between online and offline channels became crucial, with BOPIS gaining popularity. Consumers demanded flexible payment options, and data privacy concerns led to a shift towards zero-party data strategies.

This all shaped the key learnings from the 2023 E-commerce year:

Some of these trends are in full swing in 2024 and keep shaping the future of online shopping. Here's at the core trends that are influencing how consumers discover products, make purchases, and interact with brands.

The global e-commerce market worth is projected to jump from £3.2 billion in 2024 to £5.1 billion by 2029. Undoubtedly, such a dynamic environment necessitates a focus on innovation and adaptation. Here's a glimpse into the key trends shaping the online shopping experience for businesses to look up in 2024:

As AI continues to evolve, the e-commerce personalisation software market is poised to offer even more sophisticated tools, shaping the future of online shopping into personalised shopping experiences. This £258.5 million market is projected to reach £1.9 billion by 2033. 

AI in e-commerce analyses customers' browsing history and purchase patterns to suggest products they will genuinely love. 

For instance, Spotify already employs AI for its "Discover Weekly" playlist, which creates personalised music recommendations for users based on their listening habits. In a similar fashion, Netflix utilises AI algorithms to suggest content based on viewing history, which heavily influences viewer activity.

AI-powered personalisation is a transformative trend in e-commerce for 2024, significantly enhancing customer engagement and satisfaction. According to the McKinsey & Company study, AI-powered personalisation in retail can potentially create £1.3 trillion to £2.3 trillion. 

Additionally, AI-driven personalisation extends to dynamic website content and personalised search results, with 49% of consumers indicating they prefer shopping with retailers that excel in personalisation. 

The e-commerce industry is rapidly adopting AI, fueled by several key factors. Customers are demanding new experiences, including cost-effective and personalised customer service. Businesses need more precise data to understand conversational AI trends. But the most fundamental driver is the inherent compatibility between AI and e-commerce.

AI thrives on data, and online stores generate vast customer information. This data allows AI to personalise the shopping journey, optimise operations, and predict future trends – all things that directly benefit e-commerce businesses.

While AI holds immense potential, it's not a one-size-fits-all solution. Successful implementation requires a well-defined strategy. This includes using data responsibly, ensuring smooth integration with existing systems, and constantly monitoring AI outputs.

Retailers create a unified experience, whether customers browse online, visit a physical store, or use a mobile app. Compared to single-channel retailers, utilising three or more channels can increase customer engagement by a staggering 251% compared to single-channel retailers. 

This presents a powerful argument for investing in omnichannel solutions. Marketers need to acknowledge this value as it highlights the potential for increased customer engagement, loyalty, and revenue growth.

Key omnichannel strategies for 2024:

While there may be challenges in certain segments, D2C (direct-to-consumer) remains a viable and potentially lucrative approach for many companies looking to diversify their revenue streams and build stronger customer relationships.

The economic shifts we're witnessing impact the viability of D2C models, particularly in the economy and super-economy segments. However, it's crucial to note that D2C isn't a one-size-fits-all solution, and its effectiveness varies greatly depending on the industry, product type, and target market.

D2C strategies are likely to thrive in the following scenarios:

While the current economic climate may present challenges, companies should view D2C as a strategic investment. By carefully analysing their product portfolio, target market, and existing infrastructure, businesses can identify opportunities where D2C can provide a competitive edge and drive long-term growth.

Smart shipping powered by data insights will choose the best fit for customer needs, considering factors like speed, cost, and even their personal preferences. 

Data-driven decision-making is used to optimise operations and improve customer experience. For example, Amazon has been refining its anticipatory shipping model, which uses predictive analytics to forecast customer orders and pre-ship items to nearby fulfilment centres. This approach has reduced delivery times by up to 1.2 days for millions of orders. 

There's a strong focus on providing customers with up-to-the-minute information about their shipments, as seen with FedEx's SenseAware ID technology. Its real-time tracking technology provides customers with precise package location data. In 2024, SenseAware ID is expected to be used on 90% of FedEx Priority Overnight shipments, offering near real-time updates every two seconds.

Many of these innovations aim to solve the challenges of last-mile delivery, which is often the most expensive and inefficient part of the shipping process. Crowdsourced delivery tackles the last-mile hurdle by leveraging local individuals to deliver packages, speeding up fulfilment and offering convenient scheduling options for customers. Similar to ride-sharing, this resource-light approach utilises existing vehicles and simplifies business logistics.

Amazon, Uber Eats, DoorDash, and Instracart have all adopted this model. It offers excellent scalability advantages, which help companies quickly adapt to fluctuating demand. Also, crowdsourced delivery can be cheaper and faster as it often offers same-day or on-demand deliveries. According to statistics, the same-day delivery market is expected to grow to £20.54 billion by 2027. 

That being said, crowdsourced delivery is reshaping E-commerce by meeting customer expectations, enabling smaller businesses to offer competitive pricing, and providing more personalised delivery expenses. 

Blockchain technology is transforming supply chain transparency, offering real-time tracking and detailed provenance information. Customers are able to track their orders in real-time, see exactly where their product came from, and ensure it aligns with their values. This is a win for both consumers and businesses seeking to build trust and brand loyalty.

For instance, Walmart's collaboration with IBM's Hyperledger Fabric allows it to trace the journey of mangoes in just 2.2 seconds, which is an immense drop from 7 days. 

This level of transparency helps consumers verify the origin of their products, fostering trust and brand loyalty. Businesses, in their turn, benefit from streamlined operations and reduced fraud.

Eco-conscious consumers are driving the shift towards sustainable e-commerce practices in 2024. The global green technology and sustainability market is expected to reach almost £49 billion by 2030, increasing at a compound annual growth rate of 20.8% from 2023 to 2030.

According to the survey, over 80% of consumers trust companies that back up their sustainability with publicly shared data. On top of that, around 25% of surveyed consumers search for sustainability-related government regulations to understand how their favourite products are impacted by them.

Thus, companies must respond by offering a broader range of eco-friendly products and adopting sustainable practices like recycled packaging and carbon-neutral shipping. 

Businesses increasingly use biodegradable materials and optimise shipping routes to minimise their environmental impact, meeting the rising demand for responsible shopping. This helps the environment and enhances brand image and customer loyalty.

For instance, Allbirds, a sustainable shoe company, has implemented several eco-friendly practices in its packaging and shipping processes. The company states that 75% of its materials, such as wool, are sustainably sourced and recycled, which will come from regenerative sources. 

Allbirds is planning to achieve an ambitious goal of becoming a near-zero carbon footprint manufacturer by 2030. Their strategy involves replacing virgin petroleum-based materials with natural and recycled ones, shifting their farming practices to create healthy soil, and using cleaner fuel and electricity. In 2022, these efforts resulted in a 19% reduction in their average product carbon footprint. 

They also use boxes made of 90% post-consumer recycled cardboard, which is certified by the Forest Stewardship Council (FSC). The company has designed its shoe boxes to serve as both retail packaging and shipping containers. This approach eliminates the need for additional shipping boxes, reducing material usage and waste. 

According to McKinsey & Co., 66% of all respondents and 75% of millennial respondents consider sustainability when making a purchase. Therefore, embracing sustainable practices is no longer a nicety but a necessity for businesses of all sizes.

With the increasing importance of cybersecurity, businesses are implementing advanced security measures and transparent privacy practices to safeguard customer information. Gartner predicts that by 2025, data privacy regulations will cover 75% of the global population. Non-compliance can result in hefty fines and legal repercussions.

This includes robust defences against hacking, clear consent management protocols, and compliance with global data privacy regulations like GDPR. These efforts ensure that customers can confidently shop online, knowing their personal data is secure.

To achieve this, many organisations are increasing their cybersecurity budgets to address the growing threat landscape. Top cybersecurity spending priorities remain infrastructure and network protection, real-time threat detection and response, effective security strategies, and robust identity and access control.

For instance, Shopify invests heavily in security measures to protect customer data and ensure safe transactions. This includes AI-powered fraud detection systems, regular security audits, and compliance with industry standards like PCI DSS (Payment Card Industry Data Security Standard).

This trend is expected to continue, with the global cybersecurity market size projected to grow from £149.9 billion in 2023 to £235 billion by 2028 at a CAGR of 9.4%

With the rise of global e-commerce, platforms are adapting to various regional data protection laws. Alibaba, for instance, has implemented region-specific data handling practices to comply with laws like China's Personal Information Protection Law (PIPL) and the EU's GDPR. 

This is crucial as cross-border e-commerce sales reached an estimated £4.565 trillion in 2023. Projections indicate a 39% growth in this figure over the coming years, with expectations to surpass £6.297 trillion by 2027.

Shopping seamlessly through social media platforms is experiencing a significant surge, particularly among younger demographics. This trend is reshaping the e-commerce landscape, with social commerce sales in the UK alone projected to reach £31.27 billion by 2024 and expected to grow to £83.27 billion by 2029. The adoption rate is particularly high among Gen Z and Millennials, with 32% of Gen Zers making purchases based on influencer recommendations.

Major platforms are capitalising on this trend; for instance, Instagram and Facebook combined are expected to dominate 58% of social commerce revenues in the UK in 2023. TikTok, a relative newcomer to social commerce, is rapidly gaining ground, with 36.1% of 18-34-year-olds in the UK having purchased on the platform recently.

As social media usage continues to rise in the UK, the seamless integration of shopping experiences within these platforms is set to become an increasingly vital component of e-commerce strategies. UK consumers spend an average of £107 per month on social shopping, highlighting the significant potential for businesses in this space.

The UK social commerce market is expected to see an impressive 26.6% annual increase, underlining the growing importance of this channel for retailers and brands looking to engage with consumers in innovative ways.

The rapid growth of m-commerce (mobile commerce, M-commerce) is part of a broader trend in social commerce. It is expected to reach £1.9 trillion by 2025, so creating a seamless mobile experience is a must. 

This includes developing apps with a mobile-first design, implementing one-click ordering for faster checkouts, optimising website design for smaller screens, and ensuring fast loading times on mobile devices. 

For example, in 2024, Instagram is expected to have 46.8 million US social buyers. To capitalise on this, Instagram shopping allows businesses to tag products in posts and stories, leading users directly to purchase pages. 

Offering a variety of mobile payment systems, including digital wallets and contactless payments, caters to diverse customer preferences and enhances convenience.

The global subscription box market is expected to reach £83.26 billion by 2032, up from £25.99 billion in 2023. This substantial increase represents a growth of over 220% in less than a decade. It demonstrates the continued appeal of subscription services to consumers and the potential for businesses to capitalise on this model. 

It's unsurprising as, according to 2023 statistics, 83% of US households have at least one streaming service subscription, up from 52% in 2015.

From beauty boxes to pet supplies, these services provide a convenient way for consumers to receive curated items regularly. The personalised nature of the subscription models enhances customer satisfaction and loyalty, as consumers enjoy the surprise and delight of receiving products that match their tastes and needs.

For example, FabFitFun delivers seasonally themed lifestyle boxes containing trendy items tailored to the season. The service costs £44 per box (billed £176 annually) or £56 per box (billed quarterly). With each box valued at up to £240, customers perceive significant value, potentially justifying the subscription cost. 

This highlights the growing popularity of curated subscription models that offer a surprise element and cater to specific interests or seasonal needs.

AR (augmented reality) technology revolutionises online shopping by creating immersive experiences that let customers "see" products in their own environment. This should lead to more confident purchases and 35% less returns (when combined with a 3D configurator).

Together with VR (virtual reality), augmented reality shopping rapidly transform the e-commerce landscape in 2024. The global AR and VR market is projected to reach £31.5 billion in revenue this year, with an expected annual growth rate of 8.97% (CAGR 2024-2029). 

In the retail sector specifically, 61% of consumers prefer to shop with retailers offering AR experiences, while 40% are willing to pay more for products they can experience through AR. These immersive technologies effectively reduce return rates by up to 35% by allowing customers to visualise products in their own environment before purchasing. 

Sephora Virtual Artist enables users to try on makeup virtually using AR technology. This technology uses facial recognition technology to map a user's face, allowing them to virtually try on thousands of makeup products, including lipsticks, eyeshadows, and false lashes. Users can virtually try on over 20,000 SKUs (Stock Keeping Units) of makeup products, allowing for extensive experimentation without needing physical samples. 

Sephora reported a significant 35% increase in online makeup sales after implementing the Virtual Try-on Experience. This clearly demonstrates the powerful impact of AR technology on consumer purchasing decisions in the beauty industry.

Other behemoths like Amazon and Alibaba have already adopted visual search capabilities, enabling shoppers to discover products effortlessly through mobile applications or web platforms. 

Furthermore, 65% of online users are more likely to place orders after interacting with items via AR technology, highlighting the significant impact these technologies have on consumer behaviour and purchasing decisions in the e-commerce space.

It is worth noting that, currently, implementing AR and VR costs around £15,700–£78,700 and £2,360–£118,000, respectively. 

Therefore, businesses considering AR/VR implementation should carefully assess their specific needs, target audience, and potential return on investment before committing to a project. Starting with a smaller, focused project can be a good way to test the waters and gauge the impact on your business before scaling up to more complex applications.

Customised loyalty programs are emerging as a significant e-commerce trend for 2024 as businesses seek to enhance customer retention and engagement in an increasingly competitive online marketplace. 

According to a Globe Newswire press release, the global loyalty management market is projected to expand from £5.04 billion in 2023 to £22.32 billion by 2030, with a compound annual growth rate (CAGR) of 23.7%.

Loyalty programs are evolving beyond traditional point-based systems to offer more personalised and value-driven experiences. Key features include data-driven personalisation, seamless omnichannel integration, and a focus on experiential rewards rather than just discounts. 

However, as personalisation becomes more critical, loyalty managers must navigate increasingly complex data privacy regulations while still effectively leveraging customer data. Moreover, current trends call for incorporating sustainability into loyalty programs to meet the growing consumer demand for eco-friendly practices. 

One notable example of a personalised loyalty program is Sephora's Beauty Insider Program. 

The program offers three tiers (Insider, VIB, and Rouge) based on annual spending, providing personalised benefits and rewards tailored to each customer's level of engagement. 

The program integrates with in-store technology like Color Match, providing personalised product recommendations during physical shopping experiences. 

Also, Sephora sends targeted emails and notifications with relevant offers, product launches, and beauty tips based on each member's profile and behaviour.

Beyond traditional discounts, the program offers access to unique experiences such as beauty classes, meet-and-greets, and exclusive events. Moreover, members can donate their points to selected charities, aligning with personal values and creating an emotional connection with the brand.

With the help of AI, Sephora creates customised product recommendations and discounts, understands customer behaviour and preferences, and curates content inside its community. It also uses AI-powered predictive analytics to anticipate customer needs and preferences. The system can proactively offer relevant rewards and incentives by analysing historical data and patterns, enhancing the overall customer experience and driving loyalty.

Increased personalisation, seamless mobile experiences, and a strong focus on sustainability and transparency characterise the e-commerce market in 2024. AI in e-commerce and advanced technologies will be pivotal in shaping customer experiences and optimising operations. 

For companies with ample resources, pioneering new technologies can generate significant buzz and attract a customer base seeking a personalised and convenient online experience. Conversely, companies with limited budgets should prioritise building strong customer relationships, diversifying sales channels, and optimising their mobile user experience to retain their existing customer base.

So, which e-commerce trends can we expect to come next in 2025?

Obviously, the widespread adoption of (AR) and (VR) technologies will allow for virtual try-ons and immersive shopping experiences that blur the lines between the physical and digital worlds. 

Voice search optimisation and conversational AI will further revolutionise our interactions with online stores, enabling natural and intuitive shopping conversations. Autonomous delivery systems, including drones and self-driving vehicles, could soon become commonplace, drastically transforming logistics and fulfilment. For enhanced security and convenience, biometric payments might become the norm.

Sustainability will take centre stage with the growth of circular economy initiatives promoting product recycling and refurbishment. E-commerce platforms will leverage predictive analytics to optimise inventory management and demand forecasting more accurately. 

Hyper-local e-commerce will also rise, connecting consumers with nearby businesses and products, fostering a sense of community and reducing reliance on long-distance deliveries. 

Finally, integrating Internet of Things (IoT) devices will pave the way for automated replenishment and smart home shopping experiences, seamlessly integrating online shopping into our everyday lives. 

All in all, the future of e-commerce is brimming with exciting possibilities, and 2025 promises to be a year of groundbreaking innovation and transformation.