TECH TRENDS '21 THE TOOLS POWERING ECOMMERCE SUCCESS - Invest in Manchester
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TECH TRENDS '21 THE TOOLS POWERING ECOMMERCE SUCCESS
CONTENTS
3 ���������������������������������������������������������������������������������� INTRODUCTION
4 ���������������������������������������������������������������������������������� METHODOLOGY
5–6 ���������������������������������������������������������� ESTABLISHED TECHNOLOGIES
7–8 ������������������������������������������������������������������������������� FUTURE TRENDS
9–10 �������������������������������������������������������� TECHNOLOGY DEVELOPMENT
11 ������������������������������������������������� OPPORTUNITIES IN CYBER SECURITY
12 ���������������������������������� MANCHESTER; THE HOME OF UK ECOMMERCEINTRODUCTION
UK eCommerce market one of the biggest worldwide with a projected annual growth rate of 3.5% until 2025
The eCommerce market has seen rapid growth in recent years with consumers // eCommerce revenue by segment (in billion GBP)
developing an increasing appetite for the convenience, speed, flexibility, and
product variety that shopping online can offer them; a trend that was further
Electronics & Media Fashion Food & Personal Care
accelerated by the Covid-19 pandemic.
Furniture & Appliances Toys, Hobby & DIY
The UK is one of the leading markets in eCommerce. Penetration in 2021 has 90.4 92.5
88.3
85.3
reached 86%, and is projected to reach a market size of GBP 92 billion by 2025¹. 80.1
75.3 16.4 16.7
With both UK and overseas markets evolving at pace, companies are increasingly 15.4
16.0
14.7
adopting solutions, applications and interfaces that support all aspects of their 13.8 14.1
13.4 13.8
business, integrating innovative technologies into their platform and operations 12.9
12.2
11.3
in order to offer their customers the most convenient and seamless shopping 14.5 15.0 15.4 15.9
13.4
experience. 12.3
28.6 30.3 31.0
27.1 29.6
25.3
12.7 13.4 13.9 14.3 14.5 14.8
2020 2021 2022 2023 2024 2025
1 https://www.statista.com/outlook/dmo/ecommerce/united-kingdom
3 // 12METHODOLOGY
Survey structure and sample composition
The objective of this paper is to examine how // Company size by number of employees // Technologies explored
eCommerce players across the UK are currently
utilising new technologies that are set to make
an impact in the industry, understand the 150 to 249 employees 1,000 to 2,499 employees
Voice 5G
timeline for their adoption and the method for its 250 to 499 employees 2,500 to 9,999 employees
search
implementation. 500 to 999 employees 10,000 employees or more
Drones
Both primary and secondary research were Blockchain
part of the study including a survey completed
by 144 decision makers within UK eCommerce 11% 11% Robotics
Chatbots &
companies. This was supplemented with existing private messaging
industry research, opinion from technology solution 16%
17% Mobile
providers and a case study from one of the leading payments
AR & VR
eCommerce industry players about their digital
transformation path.
AI &
23% 22% predictive
ID analytics
verification
4 // 12ESTABLISHED TECHNOLOGIES
Mobile payments leading the way
With the highest current adoption rate among all surveyed technologies, mobile // Payment options as offered by eCommerce businesses
payments are already implemented by almost 80% of industry players. Order represents customer preference
When it comes to ranking payment methods by customer preference, credit/debit
cards still prevail as the most favourable. However, payment methods that involve Credit/Debit Card 99.3 %
internet access such as bank transfer, e-wallet, and e-Invoice all have outranked
cash on delivery as preferred methods by consumers and their popularity will Direct debit 88.9 %
continue to increase.
Bank transfer 89.6 %
While cryptocurrency was not as highly ranked as other payment methods
reviewed, it is already offered by around 80% of eCommerce businesses surveyed, E-Wallet/Digital wallet 91.7 %
for example as part of the utilised shop platform or integrated within the
payment provider. Retailers such as Lush and eCommerce giant Rakuten accept
E-Invoice 82.6 %
cryptocurrency as a form of payment on their website; additionally, Shopify, one of
the biggest eCommerce shop platforms, integrates cryptocurrency payments1. This
Cash on delivery 85.4 %
trend follows an increase in cryptocurrency ownership in the UK, with more than
20% of the population owning some form of cryptocurrency in October 20202. With
Cryptocurrency 81.3 %
most users being between 18 and 44 years old2, its popularity may likely rise in the
future.
1 https://www.fnlondon.com/articles/its-not-just-tesla-that-takes-bitcoin-heres-a-list-of-retailersaccepting-
payment-in-crypto-20210312 | 2 https://www.statista.com/statistics/1223344/cryptocurrency-penetration-age-uk/
Note: Data based on survey questions “Which of the following technologies is your company currently using within its eCommerce business?” and “Which payment options is your company 5 // 12
currently providing and how do they rank in order of preference by your customers?”; Survey period May 2021ESTABLISHED TECHNOLOGIES (CONTINUED)
Fine tuning will lead to adoption for some technologies
Chatbots are utilised by 63% of eCommerce companies. This AI technology is mainly // Established technologies
used for customer service and support, automating interactions with clients and
collecting data on the most frequent issues encountered by customers.
Today Tomorrow
Interestingly, the growth potential of this technology may not lie with increased
Mobile payments
adoption, but through technological improvement, ensuring that it meets the
78%
customer's growing expectations around service. A study by Microsoft highlighted
that whilst 26% of UK customers found using chatbots very efficient in resolving their 53%
issues, 41% still found it an ineffective method and ended up using other channels¹.
Delivering a positive customer experience through chatbots is therefore essential for
Chatbots & private messaging
customer retention.
63%
A similar trend can be seen for ID Verification – a set of technologies that assist 45%
with the verification of the customer identity. This technology, which deters both
information theft as well as ensuring that the person behind the screen is the
ID verification
registered customer they claim to be is already utilised by 56% of eCommerce
58%
companies. Like Chatbots, future development of this technology will likely see
enhanced technology and features over new adopters. 58%
1 https://clouddamcdnprodep.azureedge.net/gdc/gdcPiLLQw/original?ocid=mkto_eml_EM582302A1LA1
Note: Chart based on survey questions “Which of the following technologies is your company currently using within its eCommerce business?” and “Independent of whether you are already
using them or not, which of the following technologies is your company planning on using in the foreseeable future?”; Survey period May 2021 6 // 12FUTURE TRENDS
A bright future for 5G, AI and Predictive Analytics
When comparing current usage of technologies across eCommerce companies data. Some of the benefits of incorporating AI and Predictive Analytics within
versus their future intentions, 5G presents the highest potential for growth, with eCommerce are the ability to show personalised recommendations to customers
more than half of surveyed companies expecting it to be part of their plans within based on previous searches and understanding consumers’ behaviours and
the next 6 months. shopping patterns to support targeted advertising campaigns.
Businesses are, for example, enabled to support more users on their webpage at // Growing technologies
any given time and incorporate VR/AR, 3D video calls and holograms as part of
their customer experience. Today Tomorrow
Barclays estimates that 5G could increase aggregate UK business revenues by £3 56%
billion by 2025¹. 43% 44%
38% 37% 36% 38%
33%
30%
AI and Predictive Analytics are additional technologies that will be incorporated 25%
20% 20% 19%
by eCommerce companies in the immediate future, with almost 44% of companies
6%
expecting to adopt this technology within the next 6 months.
AI enables computers to mimic the perception, learning, problem-solving and
decision-making capabilities of the human mind. Predictive analytics is a type AI & predictive 5G Blockchain Voicesearch Robotics AR & VR Drones
analytics
of AI software that can predict probable future outcomes based on historical
1 https://www.barclayscorporate.com/content/dam/barclayscorporate-com/documents/insights/innovation/5g-a-transformative-technology.pdf
Note: Data based on survey questions “Which of the following technologies is your company currently using within its eCommerce business?” and “Independent of whether you are already
using them or not, which of the following technologies is your company planning on using in the foreseeable future?”; Survey period May 2021 7 // 12FUTURE TRENDS (CONTINUED)
More companies to invest in tech
When considering the remaining technologies, all have growth potential with the exception of Pure play and Brick-and-mortar/online companies which on average
majority already experiencing an adoption rate of 20% which will rise to more than selected five technologies each. The top chosen technologies across all those
30% in the next few years. The differentiator, however, is the timeline for adoption. surveyed were: AI and predictive analytics, 5G, Mobile payments and Blockchain.
Voice Search and Blockchain were indicated by the majority of companies as part
their plans for the next 6 months, while AR/VR and Robotics are expected to be
implemented within the next two years.
… of surveyed
companies plan
As an exception among all surveyed technologies, Drone technology saw the lowest on rolling out in Small Mid-sized Large
rate of potential implementation with interviewed companies; its current usage sits the future companies companies companies
at around 6% of eCommerce players. Although it is expected to increase in usage,
From 36% From 25% From 15%
only 19 % of companies indicated that they will start using drones within the next Voice search 37% today to 41% today to 39% today to 29%
few years. tomorrow tomorrow tomorrow
From 8% From 27% From 22%
When asked about budget allocated for selected technologies, eCommerce players Robotics 36% today to 33% today to 30% today to 49%
with 150 to 500 employees indicated a budget of £100k to £500K, while companies tomorrow tomorrow tomorrow
with more than 2,500 employees indicated having a higher budget of £500k to £1m.
From 18% From 38% From 29%
Blockchain 33% today to 31% today to 36% today to 32%
With regards to budget, when asked to select how many of the ten discussed tomorrow tomorrow tomorrow
technologies would possibly be included, most selected a total of four; with the
Note: Chart based on survey questions “Which of the following technologies is your company currently using within its eCommerce business?”, “Independent of whether you are already
using them or not, which of the following technologies is your company planning on using in the foreseeable future?”, “How much is your company planning to invest in these technologies in
the next 2 years (including both internal and external expenses)?”; Survey period May 2021 8 // 12TECHNOLOGY DEVELOPMENT
External or hybrid roll out?
// C
urrent deployment Technology adoption within the eCommerce sector
does not only translate into increased revenue
opportunities for major players, it also feeds into the
Internal Hybrid External I don’t know
network of specialised providers that service such
companies. When looking at how these technologies
Blockchain 23% 44% 33% 0% are being implemented, there are many opportunities
ID verification 43% 25% 31% 0% for collaboration.
Robotics 31% 38% 31% 0%
Overall, most technologies covered within this paper
Mobile payments 36% 35% 29% 1% are being rolled out by eCommerce companies through
5G 41% 31% 26% 2% either contracting service providers or in a combined
arrangement with their own in-house expertise, which
Voice search 47% 25% 25% 3%
is a positive sign for specialised suppliers.
Drones 33% 44% 22% 0%
AR & VR 34% 45% 21% 0% When considering technologies currently used, the
Chatbots & private messaging biggest opportunities are within Blockchain, Robotics,
48% 33% 19% 0%
ID verification and Mobile Payments; where one in
AI & predictive analytics 31% 50% 18% 2%
three companies are utilising third-party service
providers for implementation.
Note: Chart based on survey question “Are these technologies implemented by in-house teams or do you work with specialised 3rd party service providers?”; Survey period May 2021
9 // 12TECHNOLOGY DEVELOPMENT (CONTINUED)
Opportunities for collaborations
Those surveyed indicated that future plans for the // Future development
integration of new technologies, Drones, 5G, AR/VR
and Mobile Payments were areas of high potential for
Internal Hybrid External I don’t know
cooperation with suppliers with 71% of respondents
stating that AR/VR and Drones would be solutions
that they would either implement in cooperation with Drones 26% 30% 41% 4%
external providers or fully utilise third-party services. AR & VR 28% 41% 30% 2%
5G 35% 36% 30% 0%
At least 60% of participants indicated that they
expect to utilise external providers to fully implement Mobile payments 38% 33% 25% 4%
technologies such as Blockchain, 5G, Robotics and AI. Blockchain 33% 40% 23% 4%
Robotics 37% 42% 21% 0%
In contrast, Chatbots, ID verification or Voice search
AI & predictive analytics 37% 43% 21% 0%
are seen as technologies where at least 40% of
companies expect to be able to rely on their in-house Chatbots & private messaging 40% 37% 18% 5%
experts. ID verification 41% 40% 18% 1%
Voice search 49% 34% 15% 2%
Note: Chart based on question “How is your company planning on investing in/rolling out these technologies?”; Survey period May 2021
10 // 12OPPORTUNITIES IN CYBER SECURITY
One in three players rely on service providers to develop cyber security methods
A UK Government study highlighted that four in ten businesses reported having // Current deployment
security breaches or attacks in 2020¹. Whilst this number has decreased from
previous years, cyber security has gained importance for companies due to changes
Internal Hybrid External Not used/not planned I don’t know
related to the COVID-19 pandemic.
35% 39% 22% 2% 1%
During the survey eCommerce companies were asked how the development of
Network security (e.g., firewall)
certain cyber security measures takes place within their organisation in order to map
out in which areas cooperation with specialised providers are more common. 27% 36% 25% 6% 6%
Endpoint protection
Anti-malware tools and Endpoint protection provide the largest opportunity for
service providers with almost 30% of eCommerce players indicating the usage of 58% 29% 10% 2% 1%
Employee security
external providers to implement these methods. Network security also provides
awareness measures
opportunities with around 40% of companies establishing a hybrid method by
contracting providers while also utilising in-house expertise. 38% 33% 27% 1% 1%
Anti-malware tools
51% 31% 15% 1% 1%
Identity and access
(e.g., password management)
1 Cyber Security Breaches Survey 2021 - GOV.UK (www.gov.uk)
Note: Chart based on question “Which of the following measures is your company putting in place to protect itself and its customers with regards to cybercrime and is this done inhouse or
through a 3rd party supplier?”; Survey period May 2021 11 // 12MANCHESTER; THE HOME OF UK ECOMMERCE
Manchester is at the forefront of the UK’s eCommerce industry.
Offering access to specialist talent, and a wealth of innovation and collaboration
opportunities across online retail and complimentary industries including FinTech,
cyber security, AI and data, software and service design, Manchester boasts the
greatest concentration of eCommerce start-ups in the UK.
Find out why we’re home to eCommerce Unicorns, Boohoo, The Hut Group, AO.com,
Autotrader, and On the Beach, as well as a portfolio of world leading e-Commerce
brands including Amazon, Moonpig, Booking.com and MoneySuperMarket, and
how MIDAS can help you make the move to Manchester.
info@midas.org.uk
www.investinmanchester.com
12 // 12MIDAS is a trading name of Manchester Investment and Development Agency Service Limited. Registered in England. Company Registration No. 03323710. Registered Office: c/o Manchester Professional Services, Po Box 532 Room 307, Manchester Town Hall, Albert Square, Manchester, M60 2LA Telephone: +44 (0) 161 237 4470 Email: info@midas.org.uk
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