2020 was an incredible year for e-commerce where many companies had to change their business model to adapt to the new shopping behavior of consumers.
Despite the many e-commerce success stories, such as Lululemon and Best Buy, many retailers still intend to continue investing in their retail storefronts. Which brings us to our question: is the pandemic-driven shift to e-commerce here to stay; or are consumers excited to visit stores again? What will commerce look like in 2021 and the years to come?
In the Future of Commerce 2021, Shopify unlocks five predictions based on findings from the data on their platform. To this end, we have picked out some key highlights and summarised them below.
Young consumers will determine the future business landscape as e-commerce grows
Consumers are reluctant to shop in-stores
84% of consumers have shopped online since the pandemic started. One of the reasons why consumers are reluctant to shop in-stores is because of the crowds during peak periods.
With the convenience of online shopping and the abundance of delivery options, purchasing from online stores does seem like a better alternative after all.
Social commerce is growing in popularity amongst younger consumers
54% of consumers prefer to shop online; with 67% of young consumers having shifted most of their spending to online shopping.
Younger consumers are also shopping via social media more; 54% of younger consumers made an online purchase with an independent retailer after discovering them via social media. Many social media platforms have also taken measures to enable shopping on their platforms:
- Twitter has started testing new tweet display cards on their platforms for e-commerce pages to promote their products
- Walmart and TikTok and their creators have been working together to host livestream shopping events whereby consumers can shop directly from the live streaming platform
- Snap Inc. recently acquired Fit Analytics in an attempt to boost in-app purchases
- Shopify is partnering with Facebook, Walmart, Instagram, and TikTok to further develop social commerce capabilities
- YouTube launched interactive ad formats and enabled product detection within videos
The transformation of physical retail
Retailers are offering more alternatives to meet consumers’ needs
The growth of e-commerce created a competitive environment between e-commerce businesses. In a bid to win consumers over, retailers started experimenting with new technologies to enhance consumers’ shopping experiences.
Shopify’s retail merchants have replaced 94% of Point of Sale (POS) sales through providing contactless payments, in-store shopping appointments, and alternative pickup and delivery options.
- 62% of consumers preferred making in-store purchases with digital or contactless payments; which also helps retailers and consumers to adhere to social distancing and safety measures.
- 50% of consumers also opted to schedule for in-store shopping. The option to schedule in-store shopping is popular in countries like Italy (66%), Australia (54%), France (53%), and Spain (50%).
Providing more delivery and pickup options
While 54% of consumers that shopped online during the pandemic still used traditional delivery services, a significant proportion of consumers opted for alternative delivery options:
- 28% of consumers received their parcels through local delivery
- 23% picked up their purchases in-store or curbside
- 21% used a pickup-point
In fact, retailers who provided a variety of delivery options for consumers to choose from gave them an edge over others who did not. In one of our studies in the UK, we found that 54% of UK’s top retailers offered options like click-and-collect and collection points as a delivery alternative. These methods of delivery are increasing in popularity in the UK and are expected to double by 2025.
Preference for curbside pickup and buy-online-pick-up-in-store (BOPIS)
Since the pandemic broke out, retailers have been offering curbside pickups and buy-online-pick-up-in-store (BOPIS) to consumers who made purchases online.
30% of consumers have tried it for the first time since the pandemic, and 64% of which have since used this service more often than before.. This alternative delivery option is especially popular in countries like New Zealand (39%), the US (39%), and Canada (35%).
It is also predicted that the growth of BOPIS will continue to accelerate. BOPIS is a convenient option for consumers to fill the gap between shopping in-store and online Consumers have more control over their own shopping experience without having to fret over stock availability and delivery costs.
The usage of pickup points
57% of consumers are using pickup points more frequently since the pandemic started. Pickup points are popular in countries like New Zealand (32%), India (32%), and France (27%).
Pickup points are a great alternative to consumers as it offers the flexibility to contactless delivery. Consumers using this option can also pick up their parcels within a walking distance if the pickup points are near the vicinity.
What is the future for physical retail shopping?
With consumers getting used to the convenience and flexibility of e-commerce, it will be interesting to see how retailers will lure shoppers back to their stores. Will consumers eventually overcome the discomfort of shopping instores caused by the pandemic? Or will we ever reach a point where e-commerce takes over physical retail shopping?
Keep a lookout for our upcoming studies to find out more! 😉
Source: Future of Commerce 2021