5 Trends for The Future of Ecommerce in 2021

Shopify recently released “The Future of Ecommerce Report 2021” - their annual report on global trends.
  
In it, they broke down their predictions for the coming year’s eCommerce into 5 key trends, and there are a few eye-opening insights. If you’re at the helm of an online business, you should be across the new rules and expectations of eCommerce.

Haven’t got time to read our summary?

You can get a quick overview in their short video:
Otherwise, here are a few take-outs that caught our eye… and a few practical steps you can take right now to future-proof your business.

TREND 1 - Ecommerce boom fuels record online competition

At the height of the COVID-19 pandemic, 10 years of eCommerce growth happened in just 90 days.
Source: McKinsey

As countries locked down and retailers were forced to close, eCommerce reached an all-time high of 16.4% of total global retail sales.

  “If you're waiting for this to end, you say we're gonna be back to normal in two months, that we're just biding our time and getting through it, then you're gonna be screwed.

            Jill Manoff - Editor in Chief, Glossy

What you should do in 2021: Scale your omnichannel strategy.

To capitalise on the eCommerce boom and overcome fierce competition, you need to optimise your eCommerce across channels like online marketplaces, social media, retail, and wholesale.

TREND 2 - New consumer behaviours reshape the future of retail

Consumers worldwide are buying items rarely purchased online before the pandemic, like groceries, health and hygiene, and home essentials.

The pandemic has amplified the consumer’s desire for convenience and immediacy. The permanency of these shifts will be determined by how satisfied consumers are with online experiences.
Source: Statista

What you should do in 2021: Brands must adapt or risk becoming irrelevant.

Never has the consumer expected more of businesses. Not only do shoppers want to buy online, but they also expect it to be fast and convenient.

The changes you must make to your business won’t be temporary, though. Chief executives worldwide say digital is here to stay, the shift to eCommerce is structural, and behavioural changes are permanent. Learn how to take your business online and to the next level here.

TREND 3 - Fulfilment emerges as a competitive differentiator

Globally, 64% of consumers want their orders shipped for free. Today’s shopper wants shipping to be not only fast and free but also environmentally conscious.

Three-quarters of U.S. consumers are more likely to buy a product packaged sustainably. Many will also pay a premium. The focus is on zero-waste packaging, where all materials are used, reused, or recycled. Minimalist packaging, reduced package sizes, and redesigned shipping cases are also high priorities.

This global trend is strongest in developing and rapidly developing markets, led by China, where 67% of respondents say they’d be more likely to purchase products or services from a company with a good reputation for environmental responsibility.

What you should do in 2021: Improve your fulfilment capabilities.

In 2021 protect your margins from rising costs by improving your fulfilment capabilities and giving customers everything they want - fast, free, sustainable, and branded shipping.

TREND 4 - Brand building challenged by marketplace dominance

Half of all global eCommerce sales occur on marketplaces, where consumers search for solutions rather than brands. At its core, an online marketplace is an eCommerce site that offers many different products from many different sellers. Think Amazon, eBay etc.…

Nearly $2 trillion are spent annually on the top 100 marketplaces, and the world’s biggest retailers are entering the ring. When measured by gross merchandise volume (GMV), China is home to the world’s largest marketplaces, including Taobao, Tmall, and JD.com.
Source: Statista

Virtual marketplaces are one of the fastest ways to scale globally. They also help smaller businesses fulfil orders more efficiently. But brands often perceive marketplaces as a necessary evil - driving sales but pressuring margins.

Consumers search for solutions, not brands.

While marketplaces are gateways for brand discovery, consumers don’t come to marketplaces to seek out brands.

With the purchase journey increasingly beginning on Amazon, consumers search by categories, benefits, and reviews. Search, according to analysts, has become the new brand:

70% of Amazon searches do not include a brand name

Nearly 90% of Amazon product views result from the search, not branded ads or merchandising

Yet building a brand has never been more important

Marketplace dominance and search behaviour aside, today’s consumer also wants to buy from brands with a higher purpose. Worldwide, shoppers are increasingly spending with their values. Purpose-driven consumers - approximately 40% of all consumers - want products and brands that align with their beliefs and are willing to pay a premium.

Consumers’ top reasons for shopping at an independently owned business (online or in-store) include:

Supporting entrepreneurship (33%)
Buying unique products (33%)
Experiencing good customer service (31%)

What you should do in 2021: Offer experiences not available on marketplaces.

Brand discovery might often begin with brandless marketplace searches, but purchase decisions are influenced by the research that consumers do elsewhere online. Reaching the purpose-driven consumer means re-evaluating your marketplace presence and offering rich, personalised non-marketplace experiences.

The human touch.

TREND 5 - Retention becomes a top priority as acquisition costs spike

Ad dollars are following the consumer online. Even though overall ad spend was forecast to decline 20% in 2020, digital ad spend is estimated to increase 13%. The pandemic-induced plunge in customer acquisition costs was short-lived.

Costs on Facebook have rebounded and are at or near pre-pandemic highs. In late 2020 paid search spiked 17%, and paid social advertising increased 24%.

Competition - fuelled by the move to eCommerce - is accelerating digital ad growth. Industry data reveals increased spend in paid search, social, and connected TV.
Source: IAB

Though reaching new customers is important, the rising competition for online attention has reinforced the value of keeping existing customers. Retention has overtaken acquisition and conversion as a top priority for many businesses. Historically, improving customer retention 5% increases profits by 25% to 95%.

What you should do in 2021: Prioritise your existing customers.

To reduce your reliance on advertising, communicate directly with existing customers by email and text message marketing. Personalised email campaigns can drive 18 times more revenue, and 90% of text messages are opened and read within three minutes of being sent.

The final take-out: Thriving in the new normal for eCommerce in 2021 and beyond

Ecommerce is at an all-time high. Lockdowns, travel bans, and retail closures forced the consumer online. But not all eCommerce businesses have the infrastructure in place to deliver a world-class customer experience.

To better compete with marketplaces and retail giants, brands need to invest in richer, more personalised experiences. As acquisition costs rise, along with uncertainty in digital advertising, humanising your brand to enhance customer retention now looks like a top priority. Get our guide on how to take your business online and to the next level.

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