If it seems like your neighbors are receiving more packages these days, you’re right. According to Mary Meeker’s 2018 Internet Trends Report, online shopping makes up 13% of retail sales worldwide. Although e-commerce has steadily won a larger share of physical retail over the last decade, it doesn’t mean online companies can rest on their heels.

As greater internet access and technology improvements make online shopping more convenient, it also increases the number of competitors. Successful companies are growing by taking the lead from their digital customers.

E-commerce evolves to match consumer habits

The 2018 Trends Report found that companies are relying more on collecting and analyzing data from mobile users. The insights gained enable e-commerce companies to identify new revenue opportunities and improve services to keep customers coming back.

How well companies analyze data may determine their success as online consumer shopping habits continue maturing. Years ago, consumers used search engines to begin product searches. Nearly half (49%) start their search on Amazon today, only 36% begin with search engines.

By analyzing online consumer habits, companies are helping shoppers find—and purchase—products more efficiently. Data influenced Amazon to create new features and services like 1-click purchasing and Amazon Prime to increase customer usage.

Data allows social media platforms to personalize the ads inserted into news feeds. By presenting targeted ads to the right audience, share of social media referrals to e-commerce sites rose 6% in 2017, up from 2% in 2015.

ecommerce related ad revenue 2018


As the digital world continues vying for consumer attention, the return on ad spend (ROAS) is decreasing. “In performance-based [digital advertising] channels, competition for top placement has reduced ROIs over the years and been a source of margin pressure,” says Glenn D. Fogel, CEO and president at Booking Holdings.

The increasing cost to acquire customers increase (CAC) is causing companies to focus on increasing customer lifetime value (LTV). One popular way to increase LTV is by turning products from one-time purchases into subscriptions.

chart of 2018 subscription service growth


Of the many things people can do with their smartphones, shopping is the most popular and fastest activity at 54%. Companies are adapting to the quick-paced mobile platform by making shopping appear like entertainment.

Shopping sites and apps are increasing user spend by gamifying the experience with slick visuals and deals that last as short as 90 seconds. Companies are also pulling a social component in by offering additional discounts for referring a friend.

Although it’s still in its very early stages, what’s emerging now is what Alibaba founder, Jack Ma, calls “New Retail.” In his vision, New Retail blends offline, online, and logistics so that every business, including mom-and-pop shops, become e-commerce order and delivery stations.

E-commerce influences the offline world

From the beginning, online companies used technology to make shopping more efficient and increase convenience. As a result, relative household spending for food, entertainment, and apparel fell over time.

chart 2018 relative household spending

However, spending on costs like shelter rose over time. This means a household’s biggest expenses have continually gotten higher. However, e-commerce technology can be used to drive down these costs by helping people get more out of what they have.

Through sites like Airbnb, you can rent out rooms in your home to generate extra income, which can be used for spending money or expenses like your mortgage. Online technology can also spread other benefits to the offline world. Not only does the Airbnb host earn more money, the people they serve usually pay less than if they used traditional options such as renting a hotel room.

The outlook is clear: Physical retail sales growth will continue dropping as e-commerce continues rising. To gain and maintain customers, companies must increase their perceived value by improving their online features and services. How to do that lies in analyzing the data clues left by online shoppers.