Internet Shopping: The Future of Online Retail

Posted under: Blog and Internet

When was the last time you bought something online and had it shipped to your house? Probably recently, and given current times, it may have become a more common occurrence. Some people reading this might be doing literally all their shopping online for the duration of the COVID-19 crisis, or at least as much as humanly possible. It is even possible you have a package from an online retail outlet sitting at your front door as you read this.

Parallel to this fact, there are many brick-and-mortar shopping centers that are shutting down. Malls are not having a good time right now, and businesses are learning to adapt on the fly to more online orders and ensuring that people are getting what they ordered on time. These developments will only lead to a greater emphasis on online business and a departure from the idea that goods must be bought locally, for better or worse.

Expected trends for online retail

Among others, these developments are important and interesting alike, and worthy of further discussion and investigation. There is so much to say about the future of online retail that we cannot hope to tackle every trend and topic in this article and go into the detail each subsection deserves. However, we hope to give you an impressive overview and pose questions that we hope you will investigate the answers to.

Laws, Taxes, and Best Practices

Anyone who has been around long enough knows that the internet was a bit of a wild west in its practices in previous decades. While some law enforcement would take place, online fraud was somewhat rampant, and taxes were difficult to calculate (if they were calculated at all) because it wasn't always possible to determine where everything was. And while we are not saying it was the darknet, people cared less about what occurred online on a daily basis, outside of news stories and sensationalism. It was still primarily an information tool or a novelty.

However, over the years, people got a bigger handle on what the internet was and how things could and should run. How taxes should be handled became clearer. Payment systems became more standardized if not by their creator then by their practices and safeguards. Credit cards became even more popular, and payment processing systems could connect online much more easily.

Yet what can we expect for the future? Here are a few main ideas that are already seeing traction:

  • Geolocation software, greater storage, and information usage mean that local sales taxes are far more likely to be factored into the price, even if transactions took place across state lines.
  • While we will be going into more detail about it later, improved return practices and quality standards have become more widespread, especially among larger chains, retailers, and platforms.
  • Some larger markets will be able to dictate the laws and practices for the world or large areas, using their economic weight to force matters. 
  • For example, California's eCommerce laws are often among the most strict in the country. Due to the influence of its economy (alone one of the largest in the world), many online retailers will comply with those laws or risk losing one of their largest markets.
  • Similarly, international law matters a great deal. Often larger retailers will have different websites or webpages for different countries to accommodate different laws and best practices in those countries (alongside adjusting the price and shipping options).
  • While this is only partially related to online retail itself, we will likely be seeing additional fights over copyright, trademark, and patent laws, and how they might affect online retail outlets. Goods featuring famous characters you could previously buy because they went unnoticed may be taken off a website due to an ongoing lawsuit. As technology improves, companies will have better means of noticing such transgressions.
  • Depending on political outlooks in both the United States and around the world (likely a combination of both), online retailers will need to be increasingly transparent with information regarding their products, advertising practices, and more. It will mostly depend on how effective either business lobbyists or consumer advocates are in the coming years.

Naturally, other trends could and likely will occur, and there are other potential developments that people interested in the future of online retail should consider. 

Product Reviews and Product Information

People are trusting traditional advertising less and product reviews and consumer accounts much, much more. It is generally for the same reason people trust the word of mouth and friend recommendations more than anything else when shopping for a product: advertising cannot generally be trusted, but friends can.

This has led to the shady practices of buying reviews and retailers deleting reviews they find negative on their sites. But overall, crowd-sourced information has become the norm and will likely continue to be the norm as a check to excessive claims in marketing materials and product descriptions. Additionally, there are increasing countermeasures against fake or cherry-picked reviews on many sites, although most consumers should be skeptical of most claims made online.

Similarly, due to competition, transparency laws, or some combination of the two, we are seeing more information presented on products sold online. On most product listings, we are seeing additional pictures and everything from shipping weight to the dimensions of the product. Most features are listed, either as a point of transparency or marketing.

We are also seeing the rise of affiliate sites that are providing increasingly more detailed reviews of products. While they do have a vested interest in people buying products via their links, to remain competitive they are (often, though not always in the case of more shady sites) making sure to provide as detailed reviews as possible, making heavy comparisons and updating their recommendations as often as they can and as would be appropriate. 

Essentially, no matter where you look online, expect to find more information on every product on the market. If you cannot learn much about something you hope to buy, it might be a good idea to avoid it.

The Customer's Data is King

How much data and analysis do you think goes into every little aspect of the online retail experience? Far more than anyone could imagine. Even things such as minor font size differences and slight changes to color schemes are carefully analyzed to provide data to companies hoping to optimize their websites. A/B testing, surveys, social media metrics, and more are used every day with or without your knowledge. When you browse, you're as much a test subject as a customer, albeit usually an anonymous one.

The good news is that we have no reason to believe that companies are spying on you specifically or are out to get you. However, online retailers are interested in your habits, patterns, buying behaviors, and similar considerations. While going into detail about how all these work would go beyond the scope of this article, it's a good idea to research cookies, how websites are designed to funnel you to certain buttons or messages, and the many ways an online retailer might try to remind you of your shopping cart. All methods have a purpose.

For the future of data use from online retailers, we just need to look at the past and past motives. Everything online related to retail and products online is designed to get you to do one of a few things:

Online retail goals

  • To get your attention and either let you know or remind you that a product or service exists.
  • To "convert" you and get you to buy a product or service.
  • To get you to buy more if you are already a happy customer. 
  • To get you onto a mailing list or other regular method contact.
  • To inform you about the positive qualities of a product or the negative qualities of competitors.

There might be a few more niche reasons, but they are generally subsets of the above, and they work. If the sales copy online did not work, then it would not be used. You will not see too many significant changes in the future, at least noticeable to you on the consumer end. What you will see is a continuous refinement of the methods and options listed above to optimize conversion rates and sales. And as customers become savvier, online retailers will adjust and try new things and try to collect even more data. This cycle is one of the most certain things about the future of online retail

Customization and More Return Options

Online retail was at first focused more on logistics or providing a more specialized experience, allowing people to get products that they almost certainly otherwise would not be able to get ahold of independently. Yet now that much of the groundwork has been done, and there are online retailers for most hobbies, industries, and needs, retailers now compete on the grounds of additional options or further specialization, often at a reasonable cost.

And while it may not be feasible just yet to have items made to order or effectively 3D printed as a part of a regular shipment, there are more options than ever before, and ideas can easily become a reality with the right retail service. This is especially the case for high-end items, where the internet has allowed for decentralization.

If you want an example of this now, go to Amazon or a major bedding retailer and just look up some popular or common sheets. How many color options are there? How many types of fittings? While naturally there were options before the internet, were there that many options before the advancement of the internet? And was that the case for every major brand like there is today? 

Online retailers have realized that providing more options to a broader customer base (if only created by the virtue that distance does not matter) generates profits, or at least garners attention. This trend will only continue as products become easier to create and distribute.

And if something is not made to specifications or is not liked? The internet in recent years has become a lot more consumer-friendly when it comes to returns. We anticipate it will continue to do so, perhaps to the chagrin of smaller online retailers who cannot so easily absorb the associated costs. This has made it possible for customers to take chances and not necessarily go with the "safe" or "default" option so much, even if this is not always the case in practice. We can expect returns to become more common in the near future, as described later.

Marketing, Virtual Assistants, and Personalized Experiences

Artificial intelligence developments along the lines of chatbots, improved algorithms, and more have allowed us to have a smoother and more personalized experience online in just about every way. Marketing companies and online retailers know this and use this every chance they get. Targeted marketing based on the previously mentioned customer data has been proven to be more effective (both in terms of cost-effectiveness and general effectiveness) in most cases than the standard. 

As a result of all of this, marketing methods are adapting. Influencer marketing generally was focused on smaller brands with a limited selection of products. Major retailers might use codes or programs now to create partnerships with websites and personalities in general, understanding that standard commercials like one might find on TV or in print are not the only way forward anymore.

To see it in action, consider some of the following:

  • You see nothing but cake advertisements on social media for weeks after you make an innocuous search for a chocolate cake to send to a friend.
  • After inputting some basic size information, you only see products for your sizes on a clothing retail website.
  • After spending some time scrolling on a retail site, a popup comes up from a "sales agent" with a very common name and a stock model profile picture.
  • Based on where you came from online, both you and your friend get slightly different web pages that feature a few different products and have a slightly different layouts.

These are only some basic examples that are easily noticeable. There are many more ways that companies are trying to develop the perfect online experience to get people to spend more on their site.

Yet, what does the future hold for these practices? Essentially more refinement with the use of even more customer data as well as more advanced chatbots. While we will not start thinking they're human for some time, chatbots will be able to handle more direct customer needs, or at the very least, gather more information before handing off the task to a human customer service representative. Expect to see their use in online retail soon, much like seeing a floor representative want to help you in a department store.

Alternatively, we might not see as many chatbot assistants, and in some cases, we might have a real person on the other side of the line, helping customers with any questions they have and steering them in the right direction for their needs. If more brick-and-mortar retail chains go under and customers want more from their online experience, it is not so far-fetched an idea that there will be employees whose sole job is to help online customers in the future.

Seeing Yourself with the Product

One particular use of technology that we would like to bring attention to is uploading your measurements, or a picture of yourself may soon allow you to "virtually" try on items or clothes that you see on the online store. While the functionality is currently limited (we cannot send in precise 3D body scans to major retailers just yet), a site may select a model with your general measurements and work from there.

If you want to see it in action going one step further, then eyeglasses retailers have allowed people to upload a picture of their face and then try on glasses on top of the photo, to provide a general impression of what you would look like.

There is still work to be done, but it's a technology with clear benefits, and one we can expect to be adopted more readily when possible. Once this becomes widespread, online retail will lose one of its most significant disadvantages over in-store shopping.

Online Shoppers and Quick Returns

While we talked about additional return options before, what we are talking about here is returning some items as part of the buying process, much like certain clothes subscription boxes and Amazon Wardrobe. They allow people to try items on first in the comfort of their own homes, then simply return items they don't want to keep. Often a preferable process to having to try on half a dozen shirts in a cramped changing room and in a hurry (because few people want to be the one holding up the line for the changing room).

This method generally doesn't need to be used with most products, but clothing is a massive part of retail (even online retail currently). Simply being able to move goods back and forth at faster rates (as happens with returns) will make a huge difference.

Consolidation to a Few Corporate Giants

In some ways, the internet has been like this for a long time. We can generally expect that several giant corporations such as Amazon will continue to consolidate their holds on many markets and make up a large share of the retail market. Other companies, perhaps accelerated by the COVID-19 crisis, will likely ramp up their online efforts to try and become more competitive. You can already see retailers such as Target and Walmart doing this, to mixed success.

We would also like to point out that it is not just huge retailers that are shaping the future of online retail. Alongside other major search engines and social media platforms, Google and Facebook have an immense hold on what people look at, what products get displayed and shared, and how people are advertised to online. Google's algorithm can easily shift customer tastes from one product to another, and most of us would not even realize this was happening. What these engines do will determine where people shop online.

Additional Payment Options

As the internet has become more sophisticated, so has the availability of payment options online. While credit cards might have been the only option before, and while they remain the primary way most people and businesses handle transactions online, there are now new ways to handle payments, verify identity, and confirm that people are who they say they are. PayPal was an early option, allowing for easier payments and a more secure system that allows for refunds from potentially problematic online retailers (a common problem online).

Similarly, when Bitcoin was climbing rapidly in price alongside other cryptocurrencies, we saw quite a few online retailers, if not all the major ones, start to accept bitcoin as a form of payment, especially for digital goods. While there might not be a huge shift with every online retailer accepting multiple forms of cryptocurrency, it is a sign that online retailers might be open to the idea of alternative currencies or a more globalized and stable option for a more globalized world.

On top of the above observation, payment systems, as discussed before, will likely grow more sophisticated to cater to consumers and make matters easier for the retailer. Things such as saving information, allowing for multiple payments over time, auto payments, and regularly recurring subscriptions will all gain further traction in areas they might not already have and try to work their way into the complete online retail ecosystem.

Getting Around the Problem of Fresh Goods

Some people might object to the idea of shopping entirely online. However, with improved shipping techniques and some ingenious business ideas, the ability to get fresh goods, and otherwise perishable items delivered to your door is becoming more widespread, especially in cities. Many people have been getting a test run of this since 2020 due to the Coronavirus related lockdowns and many store closings in their area.

However, independent of that, online retail and shipping companies now can operate faster, more efficiently, and more easily provide innovations such as cooled shipping that allow for certain perishable goods to get to the customer in perfect condition, if a bit cold to the touch. While such shipping is still far more expensive than the infrastructure in place for most items, and sometimes the weather is too much in more extreme climates, there are improvements coming regularly.

As all these options become more common and normalized, the gap between fresh goods and the mainstay pantry items will shrink.

Not All is Set in Stone

Most of the trends and predictions listed above will come to pass, that we are confident about. There is simply too much inertia toward the enhanced use of big data and more personalized and consumer-friendly experiences to come to any other conclusion. Only a major political or world event would upend those trends. Yet, in terms of specifics and how different features might rise in popularity, there are many possibilities. 

The internet has a history of welcoming newcomers to the market easily. Now, tech giants might try to acquire these companies early on to maintain their hold. Still, one way or another, the advent of these new companies and the technologies they use will adapt how people shop and consider products online. The only certainty is uncertainty, and the more the online world might try to resist change, the more likely it is to come to pass.

Final Thoughts

Online shopping, while exploding in popularity, is still relatively young as a concept and a practice. Laws, best practices, and other things are still working themselves out in multiple spheres of influence. There are many areas still left undefined in the world of online commerce and online retail. We will need to discuss what the best practices are and what is acceptable. The next decade will be an interesting one, and even then, it is doubtful it will all be figured out by the end.

Nonetheless, we hope that the information and ideas shared above have helped you understand both the current state of online retail and where it might and will head in the future. The changes will be both gradual and revolutionary, and we hope that you keep your eyes out whether you work in the industry or are just a consumer looking to inform yourself.


How will online retail react to impulse shopping?

Amazon is already experiencing this in their same-day delivery by drone. They eventually hope to be able to deliver items within a few hours. This is the first big step towards online retailers addressing how to profit from impulse buys.

What does blurring between retail and online stores mean?

At some point, we may get to the point where the most successful stores have both a brick-and-mortar storefront and a website so customers can purchase products using whatever method they choose.

Will retail stores become obsolete?

It’s likely they will not. Humans still like to touch and see products for themselves. They like the excitement and emotion of fellow shoppers. While there will likely be cataclysmic changes to retailers, they aren’t going away.

What’s the difference between retail and wholesale?

Retail goods are sold individually or in small lots to a single customer. Wholesale goods are sold in large quantities, typically at a lower price, to a company.

Do you have to pay taxes when shopping online?

Sales tax is generally only charged if the online company you buy it from maintains a physical office in the shopper’s state. This area of law is still evolving and has seen many changes over the years.