Written by Andrew Michaud, CMO at Valet Seller
While we don’t have a magical crystal ball to give you a concrete view into the future of eCommerce, we’ve got the next best thing.
Change never happens in a vacuum. Small signs always emerge first. These hidden-in-plain-sight indicators are often overlooked by the general public. But this blog post will serve as your insider scoop of the top trends that are going to shape the future of the way people will buy online in the upcoming years—starting with 2021.
So buckle up and get ready for these eCommerce predictions that professionals in the industry are betting on big time.
1. eCommerce Will Continue To Take Share From Physical Retail
As the dust from the pandemic is settling, the numbers are painting are a clear picture: COVID-19 sparked a sharp rise in eCommerce adoption.
No surprise there because a lot of physical retail outlets closed doors to customers as part of the lockdowns. The good news is that this skyrocketed online commerce adoption won’t falter once the pandemic goes away.
A good example of this comes from the job market. Everyone thought that remote positions will drop in popularity as businesses get back to normal operations. But we’re seeing the opposite effect as there are more remote job openings than ever.
Businesses always knew about the benefits of remote work, but the risk of trying something so dramatic kept them away. But now that they’ve got a taste of what it can do for their bottom-line, many want to double-down on remote work instead of cutting back.
The same is proving true in the world of eCommerce. For one reason or another, a lot of people were hesitant to give online shopping a try before, especially in segments like grocery shopping. But the pandemic forced them to rely on giants like Walmart, and turns out, shopping groceries online saves quite a bit of time and even money in some cases.
“No doubt Covid has accelerated the brick and mortar retail to e-commerce transition over the last year. I expect that trend to continue with exponential growth over the next year. With that will come increased competition but equally as much opportunity. In my opinion, those who put in the work to stay ahead of trends and really commit to their online presence will flourish. “
— Ryan Zeiser, President, RMZ Solutions
COVID-19 has acted as a catalyst for the growth of eCommerce, and most likely has changed consumer behavior forever. It is safe to say that we will see eCommerce continue to flourish throughout 2021, leaving the future of traditional retail uncertain. Brands who are reluctant to these changes will need to adapt or die out.”
— Andrew Michaud, CMO, Valet Seller
2. More Entrants, More Competition
As the eCommerce pie continues to expand, we’re going to see a lot more new entrants this year. Between brick and mortar businesses going online and people choosing eCommerce as the side-hustle of choice as their 9-to-5 goes remote, we’re going to see a lot of new players, both big and small.
The pandemic has exposed the vulnerabilities of a physical-only chain of retail outlets. As lockdowns forced the doors shut for businesses, many were pushed to the brink of bankruptcy. Nothing can mitigate that risk better than exploring a whole new world of commerce online.
On the flip side of the same coin, eCommerce offers a ton of opportunities to reduce costs, raise profit margins, and reach new audiences, all at once.
“This year, we’ll see a higher-than-normal number of new entrants to e-commerce business. My prediction is especially likely for those who are launching a small business for the first time or others who (finally) realize the necessity of e-commerce. For example, owners who only had a physical footprint for their business last year probably struggled during the pandemic. By 2021, most businesses should realize how critical it is to remain “open” (i.e., online)- even when your doors are closed.”
– Dr. Laurel Aynne Cook, West Virginia University
3. Streamlining Fulfillment Will Become A Top Priority
One of the biggest appeals of shopping at your local store is that you can go in and get what you want without any delays. There’s no monitoring the calendar as you wait for the delivery guy to arrive at your door.
Although online stores can’t match that speed, the most successful ones will try to get as close as they possibly can. The influx of new entrants will make sure of that, along with the customer’s ever-rising demand for faster shipping.
In other words, having the best pricing, quality, and branding won’t be enough. Faster and reliable fulfillment will become an integral part of the differentiation equation for online businesses.
“In 2021 the resilience, reliability, efficiency, and speed of your fulfillment operations will be more important than ever. Next day delivery is going to be a crucial differentiator and will help bring eCommerce on par with retail shopping for many consumers. Merchants need to optimize their buyer experience to be the best option that shoppers can find in terms of speed, price, branding, and quality. “
— Rachel Andrea Go, Senior Content Marketing Manager, Deliverr
4. Multi-Channel Will Go Mainstream
As fulfillment becomes a top priority for online businesses, we’ll see many new logistics service providers spring up to meet this demand. More competition will result in a better service not just for the eCommerce sellers, but also the end-consumer buying products online.
An interesting application is multi-channel fulfillment. One of the biggest hurdles sellers face is all the headache that arises from keeping track of inventory and shipments, separately, for multiple platforms. But as centralized logistics providers gain momentum, we’re going to see more businesses going multi-channel consequently.
“E-commerce will continue to take market share from physical retail. The logistics industry will parallel this growth and we will see a few major players develop in multi-channel fulfillment. In developing nations, we will see explosive growth as infrastructure develops to meet demand.”
— Kevin Dunne, CEO, Valet Seller
“2021 will hopefully see the world coming out of Covid. eCommerce spend will likely reduce as shops reopen. However, eCommerce revenue will likely have skipped forward by years and should still be significantly larger than pre-Covid levels. To succeed as a seller, knowing the place you sell inside out is always the key way to win, whether it’s Amazon/eBay/Shopify or other. Knowledge is King.”
— Paul Walsh, Amazon
5. Voice Technology Is On The Rise.
In 2021, the spoken word is what will be setting brands apart. The 2021 Voices Report predicts that voice will become heavily adopted this year, at a rate faster than ever before. As businesses inexplore touchless options in order to better serve their customers in a socially-distanced world.
“Speed, efficiency, and convenience will always win. This is why voice applications and technologies will see mass adoption and advancement over the next two-three years and completely transform the way consumers shop. E-Commerce brands need to be prepared to adapt to voice-based shopping trends and behaviors to create unique customer experiences and rank competitively on dominant marketplaces.”
—Sheila Dunne, President, Dunne Goodwin
6. Niche Segments Will Continue To Thrive
One of the easiest ways to outdo the competition is to avoid it altogether. This is where niche segments have it better. Yes, there aren’t as many customers as mainstream markets, but the same holds true for competitors as well.
People have an easier time trusting a brand that specializes in men’s underwear than a generic apparel manufacturer. Hence why we’re seeing the rise of not only niche online stores, but entire platforms as well.
Fartech, Vestiaire Collective, and even Bonanza are some examples of niche marketplaces of different sizes. As mainstream platforms like Amazon continue to get flooded with countless listings, making it that much harder to distinguish quality products, customers and sellers alike are going to move towards niche marketplaces. And we’re likely going to see a lot of momentum in this area in 2021.
“Now, you are probably thinking of the most well-known marketplaces such as Amazon, eBay, Alibaba, Etsy, etc. However, these are far from your only options. In fact, there are over 100 online marketplaces to benefit from. And the focus for 2021 will be niche online marketplaces across industries and sectors. ”
— Rebekka Rich Topholm, Dynamic Web
7. Amazon Will Have To Fight Hard To Sustain Its Vast Market Share
Grocery shopping has been one of the hardest segments to crack for eCommerce companies, both giants and innovative startups alike. But one company that has more than a fair share of handling groceries is Walmart. And their online department is absolutely killing it in the transition to online.
The results of a survey last year showed that Walmart was already the destination of choice for online grocery shoppers, even surpassing Amazon.
But grocery shopping isn’t the only segment where Amazon is going to bleed some market share. Walmart, Target, and many other big-box retailers are betting big on eCommerce. Not only do they have the funding to bankroll aggressive campaigns to grab a bigger slice of the eCommerce pie, but they also bring a wealth of knowledge and experience with them from their physical operations.
Another platform booming with new business is Wish. Behind just Amazon and Walmart in the list of most downloaded shopping apps, this platform is winning where AliExpress failed to penetrate the North American market with direct Chinese brands and products.
“Walmart will prove to be a formidable adversary to Amazon, leveraging its unique advantages in groceries (where it has already surpassed Amazon in online sales) and delivery infrastructure in rural areas. Facebook will explicitly become an ecommerce company, with Shopify’s Shop Pay integrated across the entire Facebook and Instagram experience, WhatsApp in-app shopping launching late last year, and Marketplace now boasting over 800 million monthly active users. Wish, quietly the #3 most downloaded shopping app of 2020 behind Amazon and Walmart, continues to grow its niche of time insensitive shoppers as all major players double down on faster shipping.“— Dan Ni, Founder at TLDR Newsletter and ScraperAPI
8. B2B ECommerce On The Rise
Where Gen X, a generation that often prefers the handholding of a sales rep over the convenience of online commerce, used to dominate the B2B market in the past, today’s B2B audience is different. As early as 2017, we had 73% of B2B purchasing decisions involving millennials.
As a result, we’re seeing eCommerce adoption rates skyrocket in the B2B segment. Take Amazon Business as an example. The branch dealing with business customers jumped from $1B to $10B annual revenue in just a single year. The same leap for consumer sales took 7 years. Similarly, Amazon Business leaped from $10B to $25B annual revenue within a total of 5 years, whereas consumer sales took 10 years to achieve the same volume.
We’re going to see this trend continue, if not accelerate, in 2021 and beyond. This presents a lucrative opportunity for new players.
“The emergence of marketplaces in the consumer-facing market, and their ability to stabilize their positions and take charge of the market, was a strong indicator that the same was going to happen in the B2B sphere sooner or later. The growth of Amazon Business proved that, and it looks like this trend is going to continue growing in full force through 2021.”— SignalSCV
9. Customer Retention Will Go From A Competitive Edge To A Necessity
In the early phases of the pandemic, we saw advertising costs go down amid all the uncertainty. But as things go back to normal, we’re seeing a sharp increase in the cost of advertising online, with paid search experiencing a 17% and paid social media a 24% spike.
Add to it the fact that we’re going to see a lot more new eCommerce sellers (meaning more ad spend), and the cost of acquiring new customers surging in 2021 becomes a no-brainer.
As a result, better customer retention will no longer be a good-to-have, but a must. More customers coming back means lower dependency on expensive advertisements.
“Due to rising ad costs, more and more sales are going to be made on the back-end. Make sure your remarketing is on point and you will thrive.”
— Nasko Mitrev, Nasko.io
10. Experiential Marketing
With the rising competition, standing out has never been more important. Creative branding is the obvious first step. But where a lot of companies are seeing dramatic results is experiential marketing.
This can be as sophisticated as augmented-reality powered 3D models of your products to let customers get a feel from the confines of their smartphone camera. Or you can go for something less tech-intensive like the Livestream shopping events that are all the rage in China.
Continuing with the previous prediction, you should also consider the after-sale experience to keep your customers coming back for more. One strategy that is proving particularly powerful is thoughtful unboxing experiences.
Buying a product is never just about the product itself. It’s about the experience of receiving that shipment and unboxing the whole thing too. This experience is so powerful that there are entire YouTube channels dedicated to unboxing products, with one channel called Unbox Therapy attracting literally 10s of millions of viewers every single month.
Being more thoughtful about your product packaging can pay off big time as people want experiences just as much as the products themselves.
“The unboxing experience varies widely depending on the vertical, however with more and more people forgoing the face to face shopping experience and ‘IRL’ interactions with brands, how products are packaged and delivered to them reflects strongly on the brand identity. Creating a moment around that experience allows consumers to experience visual cues with the branding, packaging, and its contents. This can never fully replicate a store experience but does create a shareable moment.”
— Olivia Hawkins, Managing Director, Nichol Notes
“2020 was a year unlike any other in our lifetime. With that said, forecasting 2021 seems like an exercise in futility. However, one prediction I can make is preparedness. Anyone in the e-comm space is going to have to be overly prepared and agile this year. Regulations could change, platform rules and social platforms themselves could see major changes and none of us can predict that. What we can do is prepare our work to be reactive and agile to move forward in a new direction at a moment’s notice. My prediction is an upheaval of platform norms. Congress will no doubt be casting a wide lens at Google, Facebook and the other giants and our industry needs to be ready to adapt to whatever changes are made.”
— Patrick Duggan, Founder, Cococreated