13 Trends That Will Shape E-commerce in 2021
The year 2020 brought massive upheaval to retailers — online and offline. Customer needs changed overnight, and emerging trends suddenly became more urgent, forcing sellers to rethink their game plan and embrace tech-driven online shopping trends.
While the COVID-19 crisis brought unprecedented changes to e-commerce (and to literally every other industry), e-commerce never stays in one place for long. Already, 2021 has introduced some shake-ups of its own, as retailers reinvent themselves for a new era.
In this post, we’ll look at 13 e-commerce trends shaping the future of online shopping.
The e-commerce sector has seen tremendous growth over the past decade and is projected to hit $4.89 trillion in global sales this year — up from $1.3 trillion in 2014.
Since then, we’ve seen mobile commerce take off, personalization go mainstream, and big data evolve from a "big idea" to a basic requirement.
Today’s top e-commerce trends represent an industry-wide transformation. You’ll notice many of the online retail trends we’ve included below build on existing ones: omnichannel selling, live chat, chatbots, social commerce, personalization, voice assistants, and other tech that people have embraced in recent years.
The unifying theme is that it’s time to take these existing strategies to the next level, using data and AI-driven technologies to improve the customer experience, adapt to changing conditions in real-time, and make accurate decisions about products, service, and how to promote them.
Today’s shoppers want a cohesive shopping experience that spans several channels.
Savvy businesses are in-tune with their customers’ buying behavior and preferences — and also know that those customers expect consistency across platforms and want choices when it comes to how they connect with brands.
Tools like Amazon Pinpoint, Amazon Personalize, and chat software (both bots and live chat) are making omnichannel more accessible and affordable for businesses that were priced out of the last generation of technology.
Now, there’s potential for tiny companies to offer service on par with what you might expect from big name brands, without sacrificing the personal connection customers crave.
- According to CX Today, 90% of customers say they prefer an omnichannel experience.
- Omnichannel customers tend to spend more than single-channel shoppers.
- In a 2020 report from PwC, analysts reported that the number of organizations investing in omnichannel has jumped from about 20% to over 80%.
Organizations need to think beyond individual channels and focus on creating the best possible experience based on the context of the interaction, type of inquiry, and individual preferences.
We’re reaching a critical turning point: Omnichannel is evolving from a strategy that only a few well-resourced organizations are using well to a prerequisite for competing in today’s market.
These days, retailers are looking toward integrated tech stacks that can support the omnichannel experience and manage the demands of online shopping trends. For example, they want all sales channels to be integrated with inventory management, payments, sales, customer support, social media, etc.
What you include in your stack depends on your business model and what channels and data sources you rely on, but the point is, your entire ecosystem needs to enable customers to move through the buying process fast and friction-free.
Personalization isn’t exactly new, but it certainly became more important because of the pandemic, with customers craving a more "human" shopping experience online.
In recent years, customers have come to expect personalized interactions with brands — and in 2021, standard personalization is no longer enough to compete in a crowded, fast-moving space.
- 65% of shoppers say they’re more likely to buy from online brands that recognize and remember them and share information relevant to their interests.
- One poll found that 68% of consumers expect personalization in their shopping experiences.
- A 2020 Gladly survey found that 79% of shoppers say personalized service matters more than personalized marketing, and 86% say they expect conversations with a brand to move seamlessly between channels.
There’s so much competition right now, and the brands that will win big are those that master personalization across multiple customer touchpoints.
Brands need to look toward more advanced personalization tactics that use consumer data to serve up relevant products, content, and insights that enhance the digital shopping experience. That means using AI to learn about customers and using insights to create individualized experiences.
Historically, chatbots have been viewed as a customer support tool; however, as bots become smarter and more specialized, we’re starting to see them move into more of an active sales role.
In B2C retail, chatbots allow organizations to provide support to consumers throughout the entire buying process on multiple channels.
On the B2B side, organizations are embracing bots as a way to attract better-qualified leads, to book appointments, and to share relevant information that supports the buying process.
- Over 60% of shoppers say they prefer self-serve tools — including chatbots — to answer simple questions.
- Chatbots are expected to drive $122B in e-commerce sales by 2023, and the global chatbot market is projected to hit the $9.4B mark by 2024.
- 64% of customers say that 24-hour service is the best feature offered by chatbots, and 37% use chatbots to get quick answers in an "emergency."
Sales chatbots (like salespeople themselves) should focus on helping, not selling. Chatbots should also reflect your brand’s personality and messaging and provide a conversational experience that feels, well, human.
Instead of building out their own websites, companies are increasingly signing up with online marketplaces like Shopify, BigCommerce, Amazon, Walmart, and eBay, and others to get their online store up and running.
Platforms like Shopify have enabled companies — even those with limited resources — to create and manage an e-commerce business, while Amazon, Walmart, and other marketplaces. have made it easy to tap into an active customer base.
In 2021, we’re starting to see a shift in how sellers use these platforms to create an omnichannel experience on platforms their customers already use.
- According to eMarketer, e-commerce marketplaces are expected to grow at a rate of 32% year-over-year, with Amazon and Walmart market share expected to increase to about 40% and 6%, respectively.
- About 66% of shoppers begin their buying journey on Amazon, meaning, you could lose sales by not listing products on the platform.
- Vertical marketplaces are expected to rise in the near-term, as well, with more niche-specific marketplaces expected to enter the scene. Existing examples include Airbnb (vacation rentals), Garmentory (indie boutiques), and Uber (rides and food delivery).
While marketplaces represent a valuable opportunity to reach customers in multiple places, you’ll need to do some research to make sure that you choose to sell on marketplaces that your customers already use. In some cases, marketplaces do allow you to connect with new customers/personas.
It takes a lot of work to make marketplaces work, and you don’t want to invest a lot of time and advertising dollars into attracting consumers that may not exist.
Make sure you follow marketplace guidelines, use consumer data to enhance the experience, and focus on building a community across all channels (omnichannel, again).
Once considered a novelty, augmented reality (AR) has become a valuable tool for shoppers checking out solutions from home. These technologies make it possible to test-drive a new lipstick, see if those bold eyeglasses look good, or see what a new wall color would look like.
- According to BigCommerce, 35% of customers say they’d shop online more often if they could "try on" products virtually before buying.
- That same study also found that 22% say they’d be less likely to visit a physical store if their favorite online retailers offered AR try-ons.
- eMarketer predicts that 59M people will use VR and 93M will use AR by the end of 2021.
AR allows shoppers a chance to see how something looks on them or in their physical space.
Here’s an example of how AR can be embedded directly into the Amazon experience:
While those selling consumer products — particularly in the fashion, beauty, and home decor categories — are the most obvious use cases for AR apps, retailers offering more technical solutions can benefit as well.
AR can be used to show potential buyers how a large piece of equipment will fit into their warehouse space, take technicians inside of a machine to showcase how it works, and walk consumers through the process of setting up a new TV.
Companies that can use AR in a thoughtful way to enhance the customer experience stand to benefit big-time — inspiring customer confidence when they can’t be there in person, which may increase conversions.
Social shopping is a game-changer for e-commerce brands. It allows them to dramatically shorten the buying process, build relationships, and drive conversions directly from platforms like Instagram, Pinterest, and Facebook.
As with marketplaces, social shopping is democratizing e-commerce. Brands can quickly set up a business and start selling, even if they don’t have a website. What’s more, these channels allow organizations to market products, communicate with customers, and make sales, all in one place.
Source: Octane AI
- According to Pew Research Center, 72% of adults use at least one social media platform.
- 60% of Instagram users say they use the platform to discover new products and 130M tap shoppable posts to find out more about the products in their feeds.
- Mobile shoppers who read reviews on social media convert at rates up to 133% — social shopping makes it easier for them to complete the transaction as they don’t have to go to a second location (and enter a password and payment info) to complete the purchase.
Social shopping represents a major opportunity to reach shoppers with fresh, engaging content that looks a lot different than your typical ad copy.
Seek out opportunities to advertise on channels like TikTok, Instagram, and Pinterest to increase your reach among passive audiences and drive traffic to specific products, opt-ins, and so on.
At the same time, you can’t focus on ads alone. Make sure you connect with shoppers through organic content, too, and provide personalized experiences on all channels.
Another e-commerce trend that has seen steady growth in recent years is product subscriptions. Customers like this model because it offers a convenient, personalized experience that, many times, is also cost-effective.
Subscriptions are the main business model used by streaming services like Spotify, Netflix, and Hulu, but we’re also seeing this trend move into consumer products--particularly in the beauty, wellness, and fashion sectors.
The key benefit is, subscription services allow brands to create recurring revenue streams, rather than relying on the ad-hoc model e-commerce brands traditionally use.
- According to Zuora’s 2021 Subscription Economy Index (SEI) report grew quarter over quarter in 2020 — returning to pre-pandemic sales numbers and surpassing 2019’s numbers.
- By 2023, 75% of direct-to-consumer (DTC) companies will likely offer some type of subscription product.
- The global subscription market is expected to reach over $246B by 2025.
While product subscriptions are a great way to bring in a bigger, more predictable revenue stream, it’s not simply a matter of bundling your products into curated boxes.
You’ll need to make sure your subscriptions offer convenience and give customers something to look forward to each month.
This graphic from McKinsey does a nice job breaking down the various reasons people sign up for e-commerce subscriptions:
Voice shopping is one of those trends that’s been getting buzz for a while, yet brands still aren’t using its full potential. According to eMarketer principal analyst Victoria Petrock, brands haven’t quite figured out how to use voice shopping, but we’re likely to see a lot of growth in this space in the near-term.
- One in five consumers have made a purchase through their smart assistant, while more than 60% of smart speaker owners have used their devices to make a purchase.
- Loop Ventures predicts that by 2025, 75% of US households will own at least one smart speaker.
- Voice shopping is projected to hit the $40B mark in the US by next year — a number likely to increase significantly in subsequent years.
As more people begin using tools like Shop with Alexa, it’s looking like voice could soon represent an important touchpoint in the omnichannel experience.
Voice search creates an opportunity for e-commerce businesses — both in terms of SEO rankings and connecting with customers on another channel. While voice shopping tends to drive few conversions, particularly when it comes to more expensive purchases, it is becoming an important research tool for consumers.
That means, you’ll need to make sure you optimize your site so that Google Assistant and Alexa can easily pull answers from your content and serve up relevant information for consumers.
It's no surprise that consumers are shopping more from their mobile phones — and this long-term online buying trend shouldn't be ignored.
A well-designed mobile app gives your customers an entirely new way to engage with your brand. With the option for customers to have profiles, track their orders, and get recommended products based on previous purchases, a mobile app is an excellent option to give consumers an engaging and personalized experience
- Industry leaders prejudice that by the end of 2021, mobile transactions will make up almost 73% of all e-commerce sales.
- According to Google, 52% of people say they’re less likely to re-engage with a brand after a bad mobile experience.
- 85% of consumers prefer mobile apps to e-commerce websites.
In 2021, the mobile experience still centers on ease of use and speed. E-commerce brands first need to make sure their websites are mobile-responsive, and from there, aim to eliminate as much friction as possible.
Features like auto-fill, one-click checkout, etc., make it easier for consumers to complete purchases from their phones, rather than finding a product, then waiting until they’re at their computer to make a purchase.
Sustainability is beginning to make more and more business sense. It’s a core value among Gen Z-ers — many of whom are now adults making purchase decisions — that want to see brands hold themselves accountable.
What’s more, sustainability still matters, even for brands that cater to older cohorts. Across the board, customers are starting to care more about purchasing from brands with values that align with their own, and the pandemic has brought that into sharper focus.
- According to a recent Global Web Index (GWI) survey, nearly 42% of US & UK customers say it’s important that the products they purchase and use day-to-day are made from sustainable materials.
- IBM research found that almost 60% of shoppers say they’d be willing to change their habits if it meant reducing the impact their purchases have on the planet. Among those who already consider sustainability important, that number jumps to 77%.
- According to a recent study, 54% of respondents reported that consumer demand for more sustainable products and practices has increased either "significantly" or "somewhat" since COVID shutdowns began in March 2020. And nearly 50% said customers are more likely to hold them accountable for their actions by switching brands if they failed to meet sustainability targets.
Brands can’t afford to be lax in when it comes to taking action on climate change (this is one online sales trend that’s probably here to stay — at least until we solve the climate crisis).
As consumers begin re-examining how their own behavior impacts the planet, they expect retailers to follow suit.
- What steps are you currently taking to reduce your environmental footprint?
- What areas need to be improved?
- Can you use suppliers closer to home or use recyclable or organic materials instead of synthetic ones?
- Can you get involved with a global initiative?
In any case, be transparent. Talk about your journey on social media, create a new page on your website, and make sure you can back up any claims with real data — otherwise, you may face some backlash for so-called "greenwashing."
Amazon and other big players have made same-day shipping an expectation for consumers, even if that expectation runs counter to their desire for more sustainable products and packaging.
Big retailers — Amazon, of course, but also Target and Walmart — are investing heavily in this space, as shipping speeds are often the deciding factor for customers about whether to order products online or look for the same item in a brick-and-mortar location.
Obviously, Target and Walmart benefit from incorporating an Amazon-like experience with what they’re already doing in-store. For example, if a customer can’t find what they’re looking for, they can place an order and receive that item in a couple of days — no need to run around town or call several stores in the area to ask about product availability.
- According to McKinsey, same-day shipping is expected to make up a quarter of all e-commerce deliveries by 2025.
- A recent PwC survey found that 88% of shoppers are willing to pay more for fast delivery on online orders.
- Over 10M products on Amazon are available for same-day shipping.
While smaller companies may not be able to offer the tight turnaround times offered by Amazon, they do need to step things up when it comes to getting items out as orders are coming in.
While social distancing may soon become a thing of the past, consumers may not be ready to say goodbye to contactless delivery.
- Since the pandemic began, an estimated 30% of customers used online grocery delivery or pickup services.
- Amazon announced it was hiring 100k fulfillment and delivery workers to keep up with an influx of online orders.
- Neolix Technologies just announced it raised $28.7M in funding to produce autonomous vehicles for driverless delivery, while CVS and UPS recently joined forces to deliver prescriptions to a Florida retirement community using autonomous drones.
While you might not be ready to build your own self-driving fleet, the fact that major players are investing big in this space proves it’s a trend to watch.
Organizations should look toward selling products through marketplaces like Amazon that can handle contactless delivery on their behalf, or use a tool like Onfleet, which offers a number of features designed to streamline the delivery experience.
E-commerce has long been a B2C game, but B2Bs are moving online in larger numbers. As millennial workers move into key decision-making roles, organizations that can bring the kinds of B2C experiences to the enterprise sales process will win big.
- According to Digital Commerce 360, B2B customers want personalized self-service options (45%), AR (38%), and video chat options (33%).
- About 80% of B2B decisions have more to do with the customer experience/digital offerings than price or solutions.
- Nearly 75% of B2B buyers research at least half of all work-related purchases online.
B2B e-commerce is moving away from a model that relies on lead capture forms and live sales reps toward a self-guided process that allows buyers to research solutions on their own.
That said, B2Bs will need to use personalization and automation to guide users to the information that moves them closer to a decision — and offer multiple ways to get help if potential customers run into trouble.
In 2021, e-commerce brands need to rethink their strategy — or else, it won’t be long before they get left behind.
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