James Dye, UK Business Director at commercetools, offers predictions for the most significant challenges and opportunities that e-commerce businesses will face in 2020.

AI on the brain

As smaller e-commerce businesses move to modern systems which were born in the cloud, they are also beginning to take full advantage by becoming multitenant (which means each customer shares the same underlying engine). This will open up AI opportunities that have once been reserved for big tech and only the largest retailers in the past. AI is a hungry beast that needs a huge amount of data to learn. Now, smaller companies can pool their e-commerce data in an aggregated, unidentifiable way through third-party AI partners to make accurate predictions. This can be a way to reduce costs while embracing AI as a powerful revenue driver which helps retailers connect with customers in terms of product suggestions for an entirely personalised experience. Let’s take pricing as an example — with enough training data, an AI could suggest when to discount, by how much, or what that discount might cannibalise elsewhere on their site. 

Heads-up, speed up, go headless 

Headless systems provide a massive advantage to brands that differentiate themselves via (customer) experience. It provides the ability to pivot, make decisions quickly, experiment, test and innovate. One unfortunate certainty in retail is uncertainty, and this is an increasing trend, so retailers need systems in place which allow them to learn in a low-risk way and then adapt quickly to meet ever-changing customer expectations.   

Digitally enabling influencer brands

Thanks to influencers like Kim Kardashian and Kylie Jenner who have paved the way for a new era of influencer marketing, we will see a lot more direct-to-consumer brands. Influencer marketing has proved incredibly successful, but now retailers will need to consider the effects that this will have on website traffic. Customers can easily access goods being promoted over social media. This has been a major challenge for platforms like Shopify, which are a perfect partner functionality-wise for these new influencer brands in their first steps into e-commerce. However, platforms like these are not usually built for traffic spikes from social networks in the way enterprise solutions are able to handle them.

Developers sit with the CEO

Professionals in the C-suite are listening to the technologists more closely than ever before. Too many of them have seen what happens when they are overly trusting of vendors’ marketing and spin. The phrase “Nobody gets fired for buying IBM” is no longer true in 2020, and not all retailers can be tech businesses. Nor should they be. They do, however, need engineers on their side who can ask the right questions and cut through the noise. Cloud is a seismic shift and has reinvented how software is built, sold, and consumed. With this proliferation of software options and customer touchpoints, engineers need a seat at the CEO’s table to help board members who are frozen in the headlights of innovation, across the road before it’s too late.

Discover the major e-commerce tech trends for 2020 here.