Due to the COVID-19 pandemic, eCommerce has reached unprecedented levels, making it interesting to analyze which eCommerce trends can be expected in the following months.
While eCommerce was valued at 2$ trillion in 2020, online sales are forecast to reach 4.5$ trillion within the next year, according to Financesonline. The most popular market segment is fashion, accounting for almost 30% of all online sales in the UK (source: statista-Statista Digital Market Outlook), an eCommerce trend that is expected to continue. Despite considerable challenges for retailers worldwide, the rising popularity of online shopping can drive great growth opportunities to leverage and maximize their profits. As follows, 8 eCommerce trends forecasted for 2021 that are expected to shift consumers’ shopping experience:
1. Ecommerce Boom as a Consequence of the COVID-19 Pandemic
Due to the COVID-19 pandemic, 10 years of eCommerce growth have happened in less than 3 months (source: Shopify), making online shopping reach an all-time high and represent 16.4% of total global retail sales. Next to younger people, older generations have started purchasing online more frequently, with 150 million people worldwide shopping online for the first time during the pandemic. This mostly depends on the lockdowns, travel bans, and closed retailers, to prevent COVID-19 from spreading, which forced a shift to the online world. Many retailers had to adapt their business model and start selling either directly to consumers or through marketplaces. Despite the great opportunities, not all ecommerce newcomers have the required infrastructure and business model to deliver an optimal customer experience and compete with industry giants like Amazon and eBay. Hence, to better compete with marketplaces, brands are investing in highly-personalized experiences to enhance customer experience and retain customers.
2) Shift to an Omnichannel Strategy
To capitalize on the eCommerce boom and overcome competition, it is essential to optimize commerce across all channels, including online marketplaces, social media, retail, and wholesale. This will allow your company to be resilient and flexible, enabling your business to quickly and seamlessly shift efforts and resources from offline to online, based on customer demand. However, managing an omnichannel selling strategy and competing with marketplace giants can be challenging.
3) Changing Consumer Behavior Shapes Retail’s Future:
The COVID-19 pandemic has not only caused a change in consumers’ spending habits but also consumers’ behavior and needs. During the pandemic, clients started purchasing new product categories online, including groceries, health products, and hygiene items. Depending on consumers’ level of satisfaction, this temporary behavioral shift could become permanent, hence potentially reshaping retail’s future by transforming a virtual retail shopping experience into the new normal.
4) Rising Importance of Free Shipping and Eco-Friendly Packaging
With an increasing number of people ordering online, shipping has become a key factor influencing customer purchasing decisions, forcing business owners to adapt to consumers’ requirements of fast and efficient orders. A major ecommerce trend is customers’ desire for free shipping. As shipping plays an increasingly important role in customer purchasing decisions, over 60% of customers want free shipping and over 67% of US consumers expect either same, next, or two days delivery (source: Shopify). Increasing importance is starting to be attributed to sustainable packaging, with 72% of global customers wanting zero-waste packaging, and reused or recycled materials. In tandem with the importance of eco-friendly packaging, goes the fact that 42% of customers would rather pay more to purchase from a socially responsible brand.
5) Digital Marketplace Domination
In 2020, half of all global eCommerce sales occurred on a digital marketplace, where consumers spend nearly $2 trillion annually, the most popular platforms being Taobao, Tmall, and Amazon with revenues of 538, 472, and 339 billion, respectively (source: Shopify). On a digital marketplace, consumers often search for product categories and purchase products based on benefits and reviews rather than one specific brand name. According to Shopify’s “The Future of Ecommerce” report, 70% of Amazon searches do not include a brand name, and 90% of Amazon product views result from organic searches instead of paid advertising. However, a digital marketplace often ends up exploiting smaller companies by pressuring their margins. To overcome these challenges, brands should optimize their online marketplace product pages to maximize user experience, whilst offering unique and customized experiences through their channels. It is estimated that 2.95$ trillions in 2021 will come from personalization, by combining innovative technological solutions and traditional services to deliver tailored and unique customer experiences.
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6) As Acquisition Costs Rise, Customer Retention Strategies Become Key
With customer acquisition costs rising worldwide across all channels, customer retention strategies have become more important than ever. Although overall ad spend is forecasted to be $42 billion lower than in 2019 (source: forbes), digital ad spend is estimated to increase by 13%. To ensure customer retention, it is essential to invest in multichannel personalization to improve customer experience. This can be done by ensuring that individual customers get the same personalized brand experience regardless of the social media channel they’re using. For example, customers clicking on the same ad from Pinterest and Twitter might have different expectations, but when landing on your website should both be able to find what they were looking for. On the other hand, your customer retention strategy could focus on identifying and targeting your top customers. To do so, you can map their lifecycle journey and learn about how they engage and interact with your website, such as how long it takes them to make more purchases or the order in which they buy items, to accelerate their purchasing experience with targeted CTAs. Other actions include showing appreciation for their loyalty by offering discounts or birthday incentives, tailored email marketing campaigns, remarketing ads, or providing recommendations on future steps based on their last purchase, types of items bought, and other indicators.
7) Rise of Social Media and Mobile Shopping
With a 1.8% increase in people using mobile devices compared to last year (source: Hootsuite) and social media daily, mobile shopping sales are forecast to grow by 15% by 2022, thus accounting for 73% of all eCommerce sales. As social media continue to grow, they are slowly turning into not only marketing tools that enable brands to expand their reach, but also social shopping platforms, where users can purchase products directly from their Facebook or Instagram feed. Establishing a link with social media platforms can be a great opportunity for retailers to leverage the power of e-commerce and maximize exposure. Thus, it is recommended that you ensure your website is optimized for mobile devices to encourage mobile shopping.
8) Data Analytics Solutions and AI will Become More Important Than Ever
As the shift to the digital world becomes more clearly defined, collecting customer data analytics will also become increasingly important. Make sure you can gather enough data to gain valuable insights to offer a tailored customer experience. Being able to segment your population based on demographics or interests, to determine the most profitable channels for your business, to understand which content/landing pages lead to the most conversions, to generate in-depth reports, and to gain insights into conversion rate optimization will help you do so. With the increased use of data analytics solutions, AI is also expected to become more popular. Online sellers are forecast to spend 7.3$ billion on AI by 2022 to provide personalized customer experience and improve workflows and processes (Source: financeonline).
GA Agency can help you set up and manage your analytics account, offer conversion rate optimization services, and A/B or multivariate testing. Contact us to learn more about our services!