Next Innovation in E-Commerce

next Innovation in E-commerce
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To understand next inovation we have to first understand ecommerce, it’s pain points, the reason and then the solutions (innovations).

E-Commerce is one of the hottest markets and has been that way for over a decade now. E-commerce is a broad terminology it can involve anything from clothing to Pharmaceuticals to food ordering apps. E-Commerce accounts to USD 3.4 Trillion globally and is rising at an astonishing pace of 18% annually. Hence making it one of the fastest growing domain where companies are getting funded and buy outs are happening on a daily basis.

In countries like India where the internet and e-commerce era has started in this decade, there is a huge scope. It may seem like there are a lot of companies and tough competition but in fact, the e-commerce sales only account to 8-10% of the total sales, which leaves out a huge market open for the taking. There already a thousands of players in the market some of the names that you might have heard of are,,, etc.

“Need is the Mother of Innovation”

To understand the Next Innovation in this Domain it is primitive to first understand the current challenges and the reason behind them. Like any business, the core of e-commerce is to cut the expenses and increase the profits. E-Commerce is contrary to the Brick and Mortar shop, hence the challenges, even though they might sound same, are yet unique in its own way.

Biggest expenses to e-commerce

  • Purchase order Returns:

    Return requests for the purchased order is a night mare for most of the startups and it is so because of not just 1 but multiple reasons. Every time a customer purchases something, e-commerce portals are levied a charge by the payment gateways which make the payment possible. However while returning they generally have to offer full refund which makes it a loss making deal.
    Apart from this the companies also have to manage this order, assign a delivery boy for Pickup of the product and then the product has to be manually checked for any defect before return. This complete process is very human labour intrusive making it an extremely expensive affair.

  • Discount Sales:

    To attract customers the e-commerce are competing over prices, although in this war the real winners are the customer but only till the monopoly doesn’t exist (well, let’s leave that point for some other time). Inorder to make customers trust and use e-commerces more they offer very attractive pricings which no Brick-Mortar shop can offer. Now although the products they acquire are at cheaper prices and they sell old stock first but this is still a very cash burning process and needs lot of management.

  • Procurement and Delivery:

    E-commerce portals offer a wide range of product deliveries. These deliveries are generally done by them or by a delivery partner. In both the cases, apart from the management a lot of human hours and efforts are spent. Try sending a small parcel from one place in city to another and escalate that price when you send it from one city to another, you will know how much it will cost.

  • Order Management:

    Orders come from all part of the country and each order has it’s own process to be fulfilled. For big e-commerce, one product could be present one city and another in another city miles away. Before delivery there are checks and packaging that need to be done all that add up to the cost. These days client want more control over their order and would like to track it till it gets delivered.

  • Inventory Management:

    The advantage of having an e-commerce is the enhanced reach to your target audience which also means that they can be wide spread. In order to deliver these products you would like the product to be as close to the client as possible. Also if your website doesn’t offer sufficient products to cater all demand, the customers will simply flee to another competitor who can.
    In order to have sufficient product you need to have a big inventory. Inventories are of 2 types: Local and cloud based. Local is having sufficient quantity distributed across multiple cities based on the demand and cloud based is having a single large inventory which can cater to everything. (It goes in more depth but I won’t explain that in this article) Now think about the Warehouse space and the delivery cost, you will know where the cost is.

Things required to make e-commerce sustainable

Although you can pick any of the above problem and start brainstorming the ways you can solve it and that will become the next innovation in e-commerce. I will be targeting specific problems here to just give you a head start on how you should be thinking for 5 years ahead of time to make the next billion dollar startup.

Now image an e-commerce managing all this hassle and inculcating all these expenses just to find out that the customer doesn’t like the order and he wants to return it. All these processes have to be re-done to make sure that the correct product is pickedup and placed at the right place for the next order to delivered successfully. Hence one of the biggest challenge for e-commerce today “How to reduce the return of orders

Reasons why people return

  1. Product didn’t match the description or the image,
  2. Inappropriate size,
  3. Inappropriate fitting,
  4. Doesn’t look good after wearing,
  5. Defect in products,

“Money saved is the money earned. ”

Next wave of Solutions:

  • Digital Trial Room:

    For buying a product the most important criteria, according to the survey’s is the user satisfaction after the trial of the product. For this the e-commerce companies provide a free return and full refund policy to it’s customer. As much convenient it sounds for the customers, that much inconvenient it is for the e-commerce portals.
    However, it is a very valid request from the customers which cannot be ignored. You buy a product but it doesn’t look good on you will you be willing to keep it. In a traditional brick and mortar store trial room is probably more crowded than the Cash Counters hence telling you the story, you need to know.

    Digital Trial Rooms are basically for the customers to try the outfit digitally. There is a need of a software that can replace the model with your body posture to check if the product fits and looks good on you. There have been lot of advancements in e-commerce industry in this field. The trend started from Home Decor industry and since then it has been making it’s way into all the e-commerce sectors. The most complex is the clothing experience and companies are slowly getting there.

    The technology is advancing in 2 types:
    3D Model based Dress Try :

  • Matching Product fitting with individual Body Fitting:

    Making a customer know if a product will look good on their face is alright but giving the customer flexibility to try exact fitting is a whole different thing. And the biggest problem is most of the people don’t even know their exact sizes of the different body segments, since human bodies are subjected to constant change based on their diet and habits.

    There are companies who are trying to find the body measures of humans with the use of the camera, ensuring there is no need for additional hardware or skills for acquiring accurate measures. On the other Hand Companies have also started flooding the market with more details about the manufactured product in terms of dimensions to assist the matching of product with body shapes.

  • Surrounding based Personalised Advertising:

    This is one of the biggest available market today, in my opinion. If you look at any of the tech startups/companies who were fastest companies to billion club you will find that most of the company’s revenue model revolves around Advertisements. Google, Facebook, Amazon e-commerce, Instagram, Snapchat, Tinder, etc.
    Since the beginning companies have been trying to make advertisement less of spam and more personalised. Be it tracking the cookies, or your recent searches, or your page visits, the aim is always to show you the things that you would like to buy.
    Now as per the scientific research a person’s preferences are inspired by things that they see around. Be it a brand or a color, or a pattern, or a fashion trend it is always influenced by the things around the person (physically as well as digitally).

    Hence the next trend technology scope is in gathering all the images that the person has been around digitally and analyzing them to see what colors/Brands/style is most relevant to the customer and then giving this data to big advertisers like Google, Facebook, Linkedin, Instagram, Youtube etc. to enable them to show most relevant products to the customer.

  • Automated Deliveries and Pickups: Pickup / Delivery Bots

    With e-commerce pick up the pace, the other segment that has profited the most is the logistics industry. With Door-step deliveries becoming the new common for the e-commerce industry there is a huge demand for the delivery and pickup services. It becomes more critical with the startups competing to deliver the order on the same day.
    The logistics system is Human Resource and Vehicle heavy service industry where the products have to be shifted and managed multiple times before it reaches the right customer. Now add human time and error percentage on top of that. It really holds the e-commerce giants from all domains (food delivery to clothing) in pushing the limits and gaining an advantage over their competitors.

    There are new startups who are trying to automate the logistics from warehouse management to pick up and delivery everything will be done by bots via a single brain which will help all the bots coordinate to save time and cost. It is not a thing of future: Amazon has been using bots for more than 2 years now for Warehouse Management.

    • DoorDash:
    • Amazon Bots:
    • StarShips:
    • BoxBot:


The ideas and discussion could go on forever and this article may never end but I think it would have helped you setup the base and given you a direction to think in. The e-commerce domain is gigantic and if you can solve even 1 problem there are people waiting to give you the money without a second thought. With the sheer number of e-commerce players in the market and with the rate at which they are growing it is only a matter of time before people start dedicating more time on the backend processes rather than the front facing websites. Digitalization and automation will hold the key to all the processes because human labors are very expensive and people want to automate it as much as possible.

Go out there and make your startup successful. All the best !!

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