Is the E-Commerce Boom Here to Stay?
According to a study by Euromonitor International Retailing, the US e-commerce growth rate was 3.3-times higher in 2020 than before the pandemic, catapulting the e-commerce share of total retail sales to 20%.
As impressive as these aggregated numbers may sound on their own, it is probably safe to conclude that the pandemic had a tremendous influence on moving retail sales online.
Is this shift to e-commerce here to stay, or are we going to go back to the ways we used to shop before the pandemic?
While the exact future outcome is difficult to predict, some studies suggest that the widespread adoption of online shopping could continue or even substantially increase.
One of those studies forecasting this trend to continue was published by the small-business e-commerce giant Shopify in early 2021. Under the title "Future of Commerce," Shopify makes seven key predictions:
Young consumers will drive further increases in e-commerce adoption. During the pandemic, 67% of consumers ages 18-34 shifted more of their spending online. 54% discovered independent stores through social media.
E-commerce is likely to stay. 79% of consumers across all age groups stated that they would shop online regularly in the next six months, compared to 57% who would shop in-store.
Contactless payment becomes a requirement. 62% of consumers prefer contactless payment methods, which many stores raced to provide, almost tripling their availability in just a few months.
Buy online and pick up in-store (BOPIS). Although curbside pickup has emerged during the pandemic, 64% say that they are now more often buying online and picking up in-store (BOPIS). Local delivery is another trend. 57% of consumers state that they are using this option more often than before the pandemic.
Consumers want to shop at independent stores. 50% of the US consumers want to support independently owned businesses, while only 32% purchased from them. But this gap is expected to narrow. Although 62% of consumers purchased from marketplaces during the pandemic, 55% say they will do so in the next six months. When shopping at independently-owned businesses, a third of US consumers are looking to buy unique products, while two-thirds view free delivery as a crucial part of their online shopping experience.
Consumers want to make a difference. By shopping locally, 66% of US consumers want to make a difference in the local economy.
Innovative financial products will likely disrupt consumer banking, finance, and lending. One of the emerging products in this field is the buy-now-pay-later payment option, popular among 18-34 year-olds (41%).
Conclusions
Even if Shopify may be a little biased in their predictions as their business depends on growing e-commerce, there are three takeaways worth considering:
If you want to attract younger shoppers, you have to have an e-commerce presence and invest in social media. Younger shoppers gravitate towards brands and local businesses that show authenticity, transparency, and accountability and offer sustainable products.
A physical store can be advantageous due to its proximity to local customers, offering BOIPS and local delivery.
To improve your store's online discoverability for consumers who want to shop at independent businesses, you need to pursue a multi-channel strategy and invest in both classic search (e.g., Google) and social media while adapting your content to different demographic characteristics at the same time.
Whether these trends will play out as predicted is anybody's guess.
However, it is probably good advice to prepare your company now for some of these behavioral changes to become widely adopted rather than waiting for them to unexpectedly unleash their transformative power.
