Against the backdrop of general economic downturn, a paradigm shift is currently taking place in the growth-accustomed online retail sector. Following challenges within supply chains, e-commerce as a sector is also facing a trend reversal: Customers are increasingly being drawn back to brick-and-mortar stores to do their shopping.

Online retailers are also finding themselves increasingly stretched thin trying to ensure both profitability and customer orientation. Customers' expectations in terms of service, product range, quality and sustainability are often very high and clash with measures meant to increase efficiency. In order to manage this balancing act successfully, there are a number of areas in which e-commerce must adjust in order to remain futureproof.

Welcome to Reality: E-Commerce in Competition

E-commerce’s gold rush has now come to an end in 2024. Competition in any area of E-commerce has become fierce due to the large number of retailers, many of whom also deliver from abroad. The better offer is just a mouse click away for customers, which is why loyal, returning customers are becoming increasingly important for online retailers. Additionally, retailers are also increasingly being challenged by direct sales models. To keep customers coming back, retailers need to keep a close eye on the customer journey from start to finish, in order to keep them happy even after they have completed their purchase.

Retailers must also try to create unique selling points for themselves as a brand. For many, this will mean a focus on quality. After all, low-cost concepts such as fast fashion only work with very high volumes, extremely low-cost production, and in conjunction with intense marketing efforts. It is therefore to be expected that customers will be increasingly targeted with exclusive offers, limited editions and loyalty benefits.

Automation: In Focus for 2024

Two of the most important areas for 2024 are definitely after-sales and the automation of processes through the integration of multiple technologies.

Precise inventory management, route planning and intelligent product range planning will play a decisive role in the future. By using data analytics, companies will be able to track their stock levels much more accurately and optimize processes. Sensors in the warehouse use Internet of Things (IoT) technology to provide real-time data on stock levels, space utilization and product movements. AI and algorithms may analyze this data, optimize order quantities and enable precise inventory management and automatic reordering.

AI-supported analyses can also improve planning and coordination throughout the logistics chain. Predictive analytics and machine learning help to predict patterns and trends in customer demand. They often incorporate data from social media platforms to identify products that are trending online. This helps stores to get the right products to the right places at the right time, as well as reducing idle time. Integrating AI into logistics optimization also supports processes like route planning, loading optimization and the use of autonomous vehicles by evaluating real-time data, which increases efficiency and reduces costs.

Cost down - Shipping up: 2024 the Year of the Returns Revolution

Designing more efficient and sustainable logistics processes also helps online retailers to meet rising customer expectations. Flexible shipping options, such as express deliveries, deliveries to pick-up locations, or preferred delivery dates are perceived by customers as good service.

In search of additional savings and optimization potential, the e-commerce sector of 2024 will not be able to avoid tackling the returns process. Very often it still offers considerable potential to be optimized, becoming more efficient and improving communication with customers. Digital service platforms or alternative options to a typical product return such as offering to leave products with customers in exchange for a discount or returning them to physical locations open up new possibilities. In 2024, the trend is clearly moving away from free returns across the board and providers will increasingly introduce either minimum order values for free shipping or general shipping fees. The aim is to reduce orders that do not fully constitute a purchasing decision, but rather a trial run with the intention of returning the product. This will significantly reduce the cost of returns as a whole. We will also see more and more retailers no longer charging a flat rate for returns. In addition, physical returns as a process is increasingly being scrutinized because processing is very resource-intensive and often exceeds the value of the goods in question.

After-Sales is Before-Profit: Technical Innovation will bring Change in 2024

Online retailers are currently looking for alternative methods under high pressure. Methods such as virtual try-ons or AR/VR technologies can reduce the volume of returns thanks to enabling customers to make better purchasing decisions while improving the customer experience at the same time. This also includes virtual product tests and individual recommendations made using artificial intelligence. The more accurate a customer’s impression of a product is through accurate product materials, the more likely it is that a customer is satisfied, which in turn reduces the likelihood of returns.

What is likely to increase noticeably in 2024 is after-sales support. After-sales processes will no longer leave customers to their own devices with the paper returns form. Instead, retailers will enter into a dialogue with the customer and support them with fast, uncomplicated and transparent solutions. In the medium term, online retail will therefore shift towards a stronger focus on support post-purchase – a win-win for both retailers and customers.

Evolving E-Commerce

The year 2024 is likely to mark a turning point in the history of E-Commerce in Germany. Stagnating sales, technological advancements from competitors and an increased focus on customer satisfaction - many retailers will be forced to take a closer look at all processes, and many will find that there is still room for optimization in the area of returns management.