The Digital Juggernaut. What does 2021 have in store for the ecommerce industry?

According to Adobe Analytics, online sales grew 32 per cent for the period November to December 2020 compared to the same period the previous year, with ecommerce purchases reaching $100 billion during November, which includes Black Friday.

Digital sales in the UK grew by around 75 percent in the five days leading up to Christmas and 36 per cent in total in 2020 – the highest growth for 13 years.

Some 73 per cent of consumers are shopping online more now than they did before the pandemic in the Middle East and Africa (MEA), according to the Mastercard Economics Institute’s Economy 2021 report, with up to 30 per cent of the recent surge in ecommerce business predicted to be permanent.

Many new shopping habits taken up over this period are expected to remain in place, only helping to accelerate the global digital shift even further.

What will 2021 have in store for the industry? Redbox asked our experts and partners for their thoughts and predictions for the year ahead.

ECOMMERCE PREDICTIONS

Paul Camicas, Ecommerce Practice Leader, SQLI

I see five main trends. Firstly, and this may seem obvious, the increase in ecommerce in general, as consumer habits have structurally changed due to the different lockdowns.

Secondly, I think that purchases will be more frequent, and the average size of carts will be lower. For example, people will be happy to buy small items often such as a bottle of shampoo. This will also apply to the B2B sector where people will only buy one or two small items. We noticed this at the beginning of the first lockdown in China in 2020 and this trend grew throughout Europe and the US during 2020. I think that due to this, deliveries will be more frequent and this could lead to logistical issues and a greater risk of delays.

I think that Messaging apps within ecommerce websites should be implemented by brands to allow direct chats between sales teams and customers. Many more people have been buying on ecommerce websites and for the last 20 years ecommerce has been quite a “cold” channel i.e. no human interactions. When it comes to complex purchases, brands need to deliver value-added advice to consumers. I believe this direct connection between the sales team that we have in physical shops should also be implemented on ecommerce websites, and more retailers and brands are moving towards this online, personal interaction.

The fourth trend is related to marketplaces. Not only will customers shop on marketplaces, rather than on ecommerce stores, but these marketplaces will be extended to B2B commerce too. I am seeing this in the agricultural sector in France, for example, where they are using marketplaces to expand inventory and address increasing demand for their products.

And finally, the last trend is the continued growth of social media.  Social media platforms were being used a lot more during the lockdowns, and Instagram, Facebook, Snapchat have extended their ecommerce capacities especially for small enterprises in 2020. I believe brands will use social media more to both promote and sell products especially via videos. We see a lot of this on TikTok, for example. 

Paul Lewis, Creative Partner, Redbox Digital

I expect to see further growth of secondary market platforms and digital options as businesses and consumers continue to put sustainability and environmental issues at the top of the agenda.

Re-commerce - or second-hand sales - have grown year-on-year and the pandemic has increased these habits through financial reasons and changing values. Online resale is expected to grow by 414 per cent in the next three years.

There are a number of new online markets reaching large numbers of consumers such as Depop – and I expect to see variations of these continue to gain popularity this year.

Depop originally started as a platform for buying and selling second-hand clothes and items, but has morphed into a creative sphere where designers can set up their own online stores. It’s a lot more than this though, also using algorithms to suggest items based on your preferences and purchases and acting in a similar vein to a social network for like-minded people to connect.

Digital retailers should look to incorporate ways of repurposing products and be part of the sustainability solution.

I also expect to see the continuing growth of Instagram in ecommerce. Users can now find products for sale straight from the main menu on the app and brands can tag products in photos, videos and stories – turning all posts into a sales opportunity.  With so many millions of users and daily visits, I expect to see more brands make Instagram an integral part of their business strategies.

Heather Nix, CMO, ShipperHQ

For 2021, we have high hopes for the ecommerce industry. After historic growth in 2020, we expect the upward trend to continue, as retailers continue to innovate and iterate their offerings to be more customer-centric. One such offering, BOPIS, saw adoption skyrocket over 250 per cent in 2020, a trajectory that will likely continue throughout this year.

In addition, we expect to see the continuance of storefront innovation through immersive buying experiences, multi-functional storefronts, AR and VR integration, subscription-based buying, and mobile-centric experiences. One key feature that will become more mainstream is curb-side returns, which align nicely with shifting consumer preferences for touchless experiences.

Kevin Ward, Director UK Partnerships, Klarna

As we enter 2021, I expect the ecommerce industry to continue to thrive in an uncertain environment. Bricks and mortar will remain closed until at least Q2 which makes the importance of nailing online optimisation even more paramount. This optimisation starts and ends with the customer. Retailers must invest in their tech stack and quickly if they want to ensure any uptake in market share. Customer expectations have never been higher online than they are today, UX needs to be world class and all possible friction must be removed from the buying process.

My real hope is that retailers who have not invested in online see this period as one filled with serious opportunity. They must listen to their customers and make the buying experience an easy one that a customer wants to replicate. The key trend that I see that will drive forward at pace is Social Selling. This isn't new, but very few retailers have accepted that it is going to be and to some extent already is the way to acquire new customers and when used in line with already developed partner ecosystems, the reach suddenly becomes unrivalled!

Gavin Laugenie, Head of Strategy and Insight, dotdigital

It may sound over-cautious, but I'm not one for predictions. If 2020 taught us anything, it's that it's impossible to forecast predictions and make concrete plans. So, for me, predictions in 2021 will be more a fine art rather than a science.

Agility and the ability to pivot with ease along with an increased emphasis on empathy and rewarding loyalty will be the name of the game. This will come as no surprise to many of you reading, as most brands found ways to pivot last year. And for those that didn't - well, 2021 will be all about playing catch up, finding your voice, and connecting with your customers like never before.

Daisy Sorrell-Rhodes, Marketing Manager, Akeneo
We are definitely seeing some leading organisations grasp the changes that are occurring in their markets and they are taking bold action to remain competitive, and in some cases pivot their business to deal with the dramatic changes in their markets.

Shoppers themselves have also changed their purchasing approach out of necessity when physical stores were closed or limited their traffic. This has of course accelerated the trend to buy via ecommerce, marketplaces, and other online channels. According to Forrester, on average, US consumers are connected to 4.7 devices, 3.2 social media platforms and 3.2 channels such as websites, apps, etc, with young adults (18-44) being the most connected. This is a huge increase from before COVID-19 and merchants who cottoned on very quickly and are now seeing the benefit in sales.

Cornish clothing brand Seasalt, quickly identified this trend and invested in Akeneo PIM to kick start its 360 digital transformation allowing its shoppers to experience a whole new way of buying and therefore meeting customer expectations.

Luxury brands such as automotive and high-end kitchens may not be able to convert their in-store experiences to online as easily as some other industries. They almost need to go back to square one and spring clean their website and display their products in a new light to cater for this new way of buying.

All merchants should still be looking at brand awareness that converts to a sale such as social media and paid ads that redirect traffic to their new and product-improved website.

INDUSTRY PREDICTIONS

Daisy Sorrell-Rhodes, Marketing Manager, Akeneo
Complexity in your product catalogue is inevitable. With a PIM acting as a master catalogue or organisational tool for all your product information, it ensures a positive and consistent commerce experience for your customers. As you come to battle with upswings, downturns, human error and boosting sales it is more critical than ever that a unified experience is given. This enables you to orchestrate acquisition, enrichment and distribution of consistent assets that leads to efficient data leveraging and overall improved business model.

It’s important to note that a unified experience does not necessarily mean a uniform experience. Products need to be presented in context for the channels you’re selling on. Even something as simple as the product description will be different across print, ecommerce, and social channels simply due to the length of the field. But you need to be presenting the product in the same way, consistently. A centralised PIM can help manage and govern this information so it is optimised for, and unified across, the many different touchpoints customers use to research and ultimately buy products,

Jared Smith, Head of Sales, ShipperHQ 

When it comes to shipping, we’re thrilled to see the trend of innovation within the fulfilment space continuing, particularly around automation. With it comes more operational efficiency with accurate rates, fewer delays and shipping issues, and crucially – fewer overcharges and undercharges. As retailers become more and more aware of potential areas of improvement within their shipping strategy, we expect to see large scale changes to shipping offerings around transparency and convenience. In keeping up with customer expectations, features like address validation, alternate pickup options, and delivery date display will be mainstream in 2021.

Gavin Laugenie, Head of Strategy and Insight, dotdigital

There will be more reliance on AI, analysing data, and understanding what customers want in the email industry - and promptly relaying those relevant messages to them. More than ever, consumers’ data has to be utilised. There should be no excuse for not being able to give your subscribers what they want. After all, if you don’t know your customers, you can’t give them what they want.

Kevin Ward, Director UK Partnerships, Klarna

The alternative payments market has seen, and will continue to see, lots of new entrants. The industry will see replication of product offerings, however that is where it ends. What is important is that retailers form strategic alliances with partners who have unrivalled customer ecosystems, that can elevate their own brand and where the partnership can drive advocacy. Utilising this loyal ecosystem will be key to success. Klarna has 10 million active users across 6,500 different retailers spanning most sectors. This reach, in-line with our 2.5m active app users, allows us to become a true business partner and allows us to drive performance in terms of new customer acquisition, conversion, loyalty and increased average order value.

Paul Camicas, Ecommerce Practice Leader, SQLI

Maybe I’m very ecommerce-centric as I lead an ecommerce business unit, but I think that Unified Commerce projects will explode in 2021, as the power and budgets of Chief Digital Officers increased in 2020. As a result, there will be more re-platforming and evolution type projects. This represents interesting opportunities for digital agencies.

As ecommerce sales are growing, competition will also be tough on customer acquisition and this is why I think digital agencies will focus on both consulting and services around marketing performance. When I talk about marketing performance, I mean customer acquisition – that is SEO, SEM, affiliate marketing, display marketing and social media.

Lastly, as new commerce projects start in 2021, I think the recruitment of talent will be a major challenge for digital agencies as the market becomes more competitive.