Technological Factors Influencing E-commerce Stocks

By: Retail CIO Outlook | Tuesday, February 19, 2019

Stocks are the reflection of the market forces. With the explosion of smart devices, e-commerce has expanded exponentially in the U.S., and around the world. $1 trillion market capitalization of Amazon reflects the confidence of the consumers in e-commerce. Amazon grew analytically since its inception, which reflects Jeff Bezos’s belief in the data-driven company. But with advancements in AI and automation, e-commerce has taken flights. Major technological factors have influenced the growth of e-commerce.

Growth in the number of smart devices and data has accelerated analytics. Smart devices have made lives seamless and straightforward by making processes convenient and faster. Smartphones give people the advantage to shop, save time and energy to travel and shop. The trend is the same for the developing world, where e-commerce companies are experiencing acceleration in sales.

The second factor which is influencing e-commerce globally is AI. AI-enabled tools have made predictions easier and helped companies made choices that helped them cut cost. Furthermore, AI tools have made shopping and billing payments easier. For example, Amazon launched a complete automated grocery store which allows customers to pick up goods according to their preference, greatly enhancing customers’ experience. Similarly, chatbots have made customer experience pleasant, and have also magnified the growth of e-commerce companies. Chatbot tools are enabling retailers to handle payment directly within the app, without forcing users to process the transaction on another site.

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After AI, AR is the next frontier to be conquered by e-commerce. Amazon, Alibaba, and IKEA are adopting AR like none other in the industry. The technology provides better product visibility to customers before sales, enriching their shopping experience.

In the midst of transition and noise, consolidation is what needs to be watched since it indicates the end of the business cycle and old players trying to be young again through a strategic buyout. All these factors make e-commerce stocks a perfect pick. Emerging technology and changing policies terrain have to be factored in for choosing the stocks.

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