Key Trends Propelling E-commerce in 2021

Needless to mention that 2020 was an unprecedented year. Between the coronavirus pandemic, social unrest, and a fluctuating economy, 2020 brought a slew of uncertainty to the world. The pandemic propelled e-commerce to levels that weren’t expected until 2025, while crushing many brick-and-mortar brands. While consumers have higher expectations for interactive brand experience and personalization, new and innovative trends like D2C and authenticity are also on the rise.

Businesses will have a lot to think about in 2021. This analysis based on my review of various statistics by industry reporters drills down the top trends that will surge in 2021. As businesses navigate yet another unprecedented year, this report should come in handy to strategize and exceed business goals in 2021.

Brick & Mortar isn’t Dead Yet!

2020 brought a severe blow to brands with brick-and-mortar operations, with the pandemic mandating shutdowns that forced businesses to close their doors unexpectedly - many of them permanently. Based on a recent report from eMarketer, brick-and-mortar sales declined an estimated 14% in 2020, while e-commerce grew an estimated 18%. Retail sales were hit the hardest, declining 10.5% after being projected to grow a modest 2.8% pre-pandemic. Brick-and-mortar was already on its way to being overtaken by e-commerce, with in-store interactions on the decline. But like many trends, this shift was accelerated by COVID-19. Online interactions jumped from 42% in 2019 to 60% in 2020, a trend that is expected to continue into 2021.

Brick-and-mortar has been trying to adapt to consumers’ growing preference for digital for years now, and the pandemic is forcing the resilient warrior to pivot once again. To get consumers into their stores, retailers must now give potential customers a compelling reason to visit.

What trends will surge in 2021 to help keep brick-and-mortar alive?

Geofencing is one way to target shoppers who are in close proximity to your brick-and-mortar location. Retailers can build a “virtual wall” around their targeted store, like a 10-mile or 15-minute radius. Geofencing is the perfect way to target shoppers with timely offers through push notifications like “50% off for the next three hours only!” and can be a great way to provide perks to members of your rewards program. Adding personalized recommendations to the customer could boost your sales even more.

Unique store experiences have been growing in importance for brick-and-mortar locations. This trend is another trend that was accelerated by COVID-19. With the safety and convenience of online shopping, brands need to give consumers a good reason to visit a physical store. Consider starting a compelling in-store social media campaign that inspires shoppers to tag your brand on their posts or stories to help bridge the gap between offline and online.

Delightful customer service will also elevate your brand’s brick-and-mortar presence. Warm and welcoming in-store workers who can give a shopper a highly personal experience will help more shoppers take the journey from the consideration stage to post-purchase.

Lastly, many brands will take the extra step to prioritize health, safety, and wellness in their stores. Doing so will go a long way in helping consumers feel more comfortable shopping with you. Ensure your store is set up to allow plenty of distance between shoppers, especially in your checkout lines. Consider putting up signs reminding shoppers to keep a distance and wear their mask or setting up hand sanitizer stations throughout your store to take the extra step to help your customers feel safe.

BOPIS Hops to the Top

Prior to the pandemic, limited-contact shopping options like curbside pickup and buy online, pick up in-store (also known as BOPIS, BOPUS, or click-and-collect) were simply convenient options for consumers on the go.

GoFisher report states “With 90% of online shoppers stating that high shipping fees and delivery times of over two days will prevent them from completing a purchase online, curbside pick-up and BOPIS have also been great ways for consumers to get their products quickly without having to spend time searching the store or waiting for shipping.”

In the era of COVID-19, these options have surged as a safety precaution, with many consumers continuing to practice social distancing and avoid busy shopping centers. The immediacy of BOPIS and curbside pickup make these especially attractive options for consumers concerned about delayed delivery and shipment, which have been significant issues during the pandemic.

Another study from Digital Commerce 360 indicates, after growing a modest 35% year-over-year in January 2020, BOPIS grew 259% year-over-year by August 2020. Similarly, 6.9% of the Digital Commerce 360 Top 500 offered curbside pickup at the end of 2019, compared to 43.7% by August 2020.

Contact Less Payments

Contactless payment (also known as tap-and-go) refers to debit and credit card technology that allows shoppers to simply hover their card over a payment terminal in order to make a transaction. The terminal reads the card information using radio frequency identification (RFID) and near-field communication (NFC) technology.

Contactless payment will also continue to surge in 2021. One in six consumers made their first contactless transaction during the pandemic, with 86% of first time contactless users planning to continue making contactless payments. Adoption was highest among Gen Z (25%) and Millennials (23%), with even one in 10 Baby Boomers making contactless payments over the pandemic - reports an online payments transactions data analysis by sdcexec further implying that contact less payments are here to stay and only see more advancements happening in this space.

Supply Chain Optimization

In 2020, while brands faced unprecedented fulfilment strain due to the pandemic, consumers experienced drastically delayed shipping times, a surge in out-of-stock items, and shuttered store doors.

To cope with increased demand, Amazon went on a major hiring spree in 2020, while Instacart more than doubled its workforce within a single month. Other retailers had to pivot their promotion schedule due to supply chain hiccups caused by the pandemic, with majority of consumer goods brands being forced to cancel promotions. Additionally, nearly half of consumer goods manufacturers experienced or expected having to compensate their margins for out-of-stock items due to the pandemic in August 2020.

Supply chain disruption will likely continue into 2021. At the same time, consumers will continue to expect the fast and free shipping they’ve grown accustomed to.

Brands that diversify manufacturing, selling, and distribution will minimize the detrimental impact of COVID-19 on their shipping times and prevent unhappy shoppers. The more sources you have for your products, the more prepared you are to weather a crisis. Diversification will emerge even stronger in 2021 as a strategy for brands to safeguard their business and help make it easier to bounce back when the disruptions subside.

AI is the Future Now

$267 billion. That’s how much the artificial intelligence market will be worth by 2027 according to Fortune Business insights. As marketers propel past the uncertainty of 2020, the role of artificial intelligence will only become more crucial to new customer acquisition and profitable decision-making. Here are some stats from industry experts like Mckinsey, Statista & Salesforce

• 8.4 billion AI-powered voice assistants will be used around the world by 2024
• 44%of businesses report cost savings from using AI
• 62% of consumers are willing to submit data to AI for better shopping experiences

More and more businesses will turn to artificial intelligence to make highly intelligent & data-driven decisions, streamline & automate time-consuming marketing tasks, and free up time to focus on big-picture ideas to boost brand growth.

The Rise of D2C

Direct-to-consumer (D2C or DTC) brands promote and sell their product directly to consumers instead of selling through a third party like a marketplace or brick-and-mortar location, and thus cater more toward rising priorities like convenience, product quality, low cost, authenticity, and a seamless shopping experience. D2C is rapidly on the rise, with D2C ecommerce sales in the US projected to cross $21.25B in 2021. With the rise of the coronavirus pandemic and consumers being less likely to set foot in stores, D2C will continue to rise in 2021 and beyond.

Brands making a shift to D2C should keep in mind that most consumers still feel that customer service and personalization from D2C brands is inferior to customer service from traditional brands. By investing in customer service and personalization, D2C brands can differentiate themselves from the competition and grow profitably despite the trials and tribulations of the past year. D2C also gives brands more control over their reputation with the ability to be closer to the customers’ experience throughout the entire funnel.

Tying It All Together

If there’s one lesson we can take away from 2020, it’s that change is the only constant - and this will continue to ring true in 2021.

No matter the industry, all brands will face unique challenges in 2021. Stepping up to this challenge will require complex new initiatives, strategies, and realignments.

Statistics laid out in this brief analysis gives ample ammo of knowledge and strategies to help brands steer toward goals, whether that’s expanding online reach, optimizing conversion rates, or simply growing revenue year-over-year. The power lies in taking the data and implementing it in your business.