E-commerce continues to grow rapidly in Australia and shows no signs of slowing down. By 2025, projections suggest the Australian e-commerce market could reach over $77 billion, driven by increased internet penetration and the shift toward online retail. This growth reflects sustained consumer preference for digital shopping, with e-commerce consistently making up a larger share of overall retail sales. Let’s explore some of the key trends shaping the future of online shopping
Social Commerce
The future of social commerce is a topic that has been gaining traction in recent years. Social commerce refers to the use of social media platforms to facilitate e-commerce transactions. According to a report by McKinsey & Company, social commerce is expected to grow to nearly $80 billion in the United States by 2025.
Social commerce is an emerging form of shopping that removes friction from the buying process and creates a more engaging journey for the consumer. It presents new opportunities for brands to generate consumer interest and create a more interactive, entertaining, and experiential journey. For example, leading brands are working with platforms such as TikTok to forge new relationships with consumers, shifting from traditional advertising strategies to fun, engaging content that is less overtly promotional.
The future of social commerce looks promising, with social commerce sales expected to nearly double 2023 sales, exceeding $107B in the US alone by 2025. New advancements in technology fuel today’s social commerce, including everything from Virtual Shopping Groups, Augmented Reality to Shoppable tabs and Shoppable Buttons.
Hyper-personalisation
Hyper-Personalisation is a trend that is shaping the future of e-commerce. In 2025, we can expect to see continued growth in personalised shopping experiences.
AI Capabilities & Manual Controls
With a global market size of $207.9 billion in 2023, artificial intelligence is shaping the customer experience in exciting ways. E-commerce businesses gather colossal heaps of customers’ data, deciphering patterns and trends. This tech becomes the cornerstone of their personalisation strategy, crafting relevant content and personalised deals. But it’s not all AI. Manual controls continue to play their part. From email to social media, businesses tailor their branding across channels to resonate with customers’ interests. AI can also predict popular in-app purchases, offering personalised messaging that enhances the buyer’s journey.
Real-Time Personalisation and Delivering Dynamic Content
This trend is driven by the fact that consumers are increasingly looking for dynamic content that is tailored to their interests and preferences. For example, Amazon uses machine learning algorithms to personalise product recommendations for its customers.
The Omnichannel Approach
This trend is propelled by the growing tendency of consumers to shop through various channels and touchpoints for any given purchase. From online shops to third-party marketplaces to social media apps, to brick-and-mortar stores—people are researching, comparing, shopping and seeking support just about everywhere you can imagine. And they expect to be able to do so easily with virtually no disruptions. To ensure a cohesive brand experience, retailers need to maintain their presence on all online platforms—including their own website, social platforms and third-party marketplace shops (such as Amazon). Not only that, but they need to optimise the omnichannel customer experience by unifying things on the back-end, so that no matter where a customer chooses to pick up their buying journey they are able to seamlessly continue right where they left off.
AR/VR
Augmented reality (AR) and virtual reality (VR) are two technologies that are poised to revolutionise the e-commerce industry. These technologies have the potential to transform the way consumers shop online by providing them with immersive and interactive experiences.
AR and VR in E-commerce
AR and VR technologies are already being used in e-commerce to provide customers with a more engaging shopping experience. For example, IKEA has launched an AR app that allows customers to see how furniture would look in their homes before they make a purchase. Similarly, Sephora has launched an AR app that allows customers to try on makeup virtually.
Benefits of AR and VR in E-commerce
AR and VR technologies offer several benefits to e-commerce businesses. One of the key benefits is that they provide customers with a more immersive and interactive shopping experience. This can help to increase customer engagement and loyalty. Another benefit of AR and VR technologies is that they can help to reduce the number of returns. By allowing customers to see how products would look in their homes or on their bodies, these technologies can help to ensure that customers are satisfied with their purchases. In the future, we can also expect to see these technologies becoming more sophisticated and easier to use.
Subscription Services
Subscription-based e-commerce services have been on the rise for several years, and this trend is expected to continue in 2025. By offering subscription-based models, businesses can provide customers with convenient and personalised experiences while securing a steady income stream.
In 2024, subscriptions are expected to expand beyond media and into various e-commerce sectors. To leverage this trend, businesses should consider introducing subscription offerings, focusing on customer retention strategies, and delivering exceptional value to subscribers.
One of the key benefits of subscription services is that they provide customers with a convenient and hassle-free shopping experience. Customers can receive products on a recurring basis, frequently through monthly boxes. This model is particularly popular in the beauty and personal care industry, where companies such as Birchbox and Ipsy have gained a significant following.
Another benefit of subscription services is that they allow businesses to collect valuable data on their customers’ preferences and shopping habits. This data can be used to personalise product recommendations and improve the overall customer experience.
Sustainable and ethical shopping practices
Sustainable and ethical shopping practices remain a priority for Australian consumers in 2024. Recent data shows that over 40% of online shoppers consider a company’s environmental and social efforts when making purchasing decisions, reflecting steady growth from 34% in 2022. Additionally, 82% of shoppers want brands to adopt sustainable and people-first practices, with Gen Z leading the charge—three-quarters of this group prioritise sustainability over brand names.
Consumers are increasingly aware of the environmental and societal impact of their purchases, expecting businesses to take meaningful action. For instance, Patagonia’s “Worn Wear” program, which encourages repairing and reusing clothing, has become a model for sustainable practices. Australian brands such as Outland Denim also exemplify ethical production by focusing on fair wages and sustainable manufacturing.
E-commerce businesses can reduce their environmental impact by using smaller boxes, eliminating unnecessary packaging, and opting for biodegradable or recyclable materials. Sustainable shipping methods such as electric vehicles, bicycles, and drones are becoming more accessible, and businesses can offer customers the option to offset carbon emissions at checkout. Transparent supply chains, ethical sourcing, and initiatives that promote repair, recycling, or second-hand sales are effective strategies to meet growing consumer expectations and build long-term loyalty.
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