Lea Karam, Consulting Director at Behave, takes a look at the innovations that will define the future of retail and ecommerce.

The boom of retail media in recent years, in tandem with the rise of social shopping, has made e-commerce a vital part of the retail industry. This year alone, e-commerce sales are estimated to exceed USD$4.1 trillion (£3.2 trillion) worldwide and are expected to continue growing.

The ways we purchase have evolved, with smartphones accounting for almost 80% of all retail website visits globally. As consumers demand more from retailers, our paths to purchase have changed, requiring new experiences in our shopping journeys.

The future of e-commerce relies on retailers keeping up with changing consumer behaviours and demands or risking falling behind.

A personal touch

A vital factor in the future of e-commerce is adapting to growing consumer demands.

Consumers increasingly expect a value exchange through uniquely curated and personalised experiences that reflect their lifestyles and self-identities. Hyper-personalisation is therefore expected to keep growing, in turn reinforcing what is known as 'selective memory' amongst consumers.

Selective memory, or 'lifestyle-driven attention', occurs when consumers become so accustomed to personalisation that they subconsciously only select specific brands to interact with. This is especially prevalent among younger shoppers, who only engage with ads that align with their lifestyles and the content they enjoy.

Platforms like Pinterest excel in this area, appealing to personal aesthetics through curated moodboards that drive engagement. E-commerce platforms that fail to leverage data and AI to offer tailored content, product recommendations, and seamless shopping journeys risk being left behind.

Need for (more than) speed

To survive, retailers must stand out. Same-day delivery, immediate purchasing options, and frictionless checkout experiences are now standard expectations. Brands need to look beyond instant gratification and speed to differentiate themselves. Consumers expect to be "delighted" in every interaction, seeking enjoyment and entertainment. The transactional experience must offer experiential value: unboxing, digital rewards, augmented reality (AR), and emotionally engaging touchpoints.

Instant gratification is not enough; consumers demand unique and memorable experiences.

Try before you buy

As technology advances, e-commerce is becoming more multisensory. Brands will offer richer, more engaging digital experiences through interactive AR features that allow customers to "try before they buy" in immersive virtual environments.

The lines between physical and digital worlds are blurring, leading to hybrid shopping experiences. AR 'try-ons' enable customers to engage with products interactively, whether trying on clothes or visualising furniture in their homes.

Brick-and-mortar stores will also evolve, integrating digital elements for a hybrid shopping experience linking online and offline behaviours. Interestingly, younger generations enjoy in-store shopping experiences with their parents, highlighting the importance of hybrid moments.

Brands as entertainment hubs

Traditional paths to purchase — the marketing funnel — are evolving into loops. In this new era, awareness and purchase occur almost simultaneously as customers engage with branded content.

Social commerce reshapes the path to purchase by blending entertainment with shopping. Consumers can discover products through engaging content and purchase items without leaving the app.

Successful e-commerce brands will operate as media and entertainment hubs, providing value beyond products by integrating branded content with shoppable moments.

With the rise of shoppable ads on connected TV (CTV), consumers will seamlessly interact with entertainment and commerce. Ads must blend into the consumer’s content consumption experience, adding value rather than interrupting. For instance, natural integrations, like product placements in popular shows, will enhance the shopping experience without feeling out of place.

The future of e-commerce will rely heavily on merging entertainment and commerce. As platforms like TikTok, Instagram, Snapchat, and Pinterest experiment with shoppable formats, entertainment will drive product discovery.

Creators will become the new brand advocates, influencing purchasing decisions through their established communities. A creator’s recommendations resonate with their audience, leading to shopping experiences that are fun and immersive.

Blurring boundaries

Retailers are transforming into media networks, leveraging customer data to create targeted advertising opportunities. The retail media boom will continue as platforms like Amazon monetise their user bases with precise, data-driven advertising solutions.

As consumers engage with brands across multiple touchpoints, the boundaries between shopping and media consumption will blur, fostering a seamless commerce experience. Retailers can become social platforms, while social platforms can embrace retail functionalities.

The shift from the funnel to the loop also explains the boom of retail media, as awareness of products and services, and the purchase thereof, increasingly happen together. The calls to actions and "action" nature of the retailer touchpoints work hand in hand with the awareness and "discovery" element on a social platform, often becoming all-in-one. An example of this again, is TikTok becoming a retailer hub, and retail websites increasingly asking for community feedback and peer sharing.

The power of community

Social learning and community-driven buying will shape the future of e-commerce, helping to reduce buyer’s remorse. Peers and influencers will influence purchasing decisions, making community engagement central to the e-commerce experience. Consumers are turning to their communities for trusted product recommendations, fostering a new form of peer-driven commerce.

Whether through TikTok live streams, trends, or group purchasing on niche platforms, the communal aspect of buying will define the future landscape.

The more agile retailers are, the better their chances of thriving in the rapidly evolving e-commerce environment. By tuning into behavioural changes and evolving expectations, retailers can distinguish themselves from those who cannot keep pace with this dynamic landscape.