2020 has propelled ecommerce forward by about 5 years according to experts. With such dramatic change within one industry comes a shift in trends, shopping habits and so much more. We’re going to be talking about 5 trends we expect to be at the forefront of more retail and ecommerce businesses.
Buy Now Pay Later
Buy Now Pay Later (BNPL) has become increasingly popular over the last few years or so and is now being adopted more widely than ever before. With more and more BNPL companies popping up and more online retailers adopting this payment method, we expect this trend to continue into 2021, where it may even become a preferential way to pay.
There are many benefits to BNPL options for both retailers, online shop owners and customers. They allow customers to spread the cost of items they may not have been able to afford upfront over several weeks or months depending on the BNPL option. This can also help increase cart value and result in larger online purchases.
And the best part is that the retailer gets the full amount upfront and the payment option takes the responsibility for taking the split payments, usually at 0% interest. So it’s a win-win for everyone.
However, Money Saving Expert owner Martin Lewis has highlighted the potential dangers of an unregulated new ‘explosive’ BNPL market. He noted that BNPL is now the fastest-growing credit option on the market and to avoid another ‘payday loans’ type issue has called for it to be regulated so both parties are protected.
Lewis commented “My issue is just like with payday loans, [when regulators come to act] it will be too late. We’re in the explosion of this form of credit today. This is absolutely huge. It is a massive form of credit that is unregulated without controls… and I would call for maximum speed to move this into a regulatory environment.”
While his concerns are valid, we feel that BNPL will still continue to increase in popularity and if and when it is regulated, it will simply be an improvement upon what is already a great option for most consumers who’s wallets may be very tight this year.
With the rise in ecommerce in 2020, many large tech companies have adapted their strategies and pivoted into the ecommerce market. A few of those being Instagram and YouTube.
Instagram, owned by Facebook, announced lots of new features this year to support businesses using their platform- including a support small business sticker for stories, gift cards for small businesses, and much more.
Instagram shopping is a main channel for business owners has continued to grow and evolve on the platform and recently extended their shopping feature to creators. Instagram’s parent company Facebook introduced Facebook Shops earlier this year, where businesses can create an online store on Facebook for free. This also meant that business owners could connect with customers through WhatsApp, Messenger and Instagram Direct to answer questions and offer support.
However, one of Instagram’s more recent updates has not been taken well by some of the platform’s most popular users. With the introduction of their new “Reels’ to compete with TikTok, Instagram made the decision to move the beloved notifications and new post icons to the top right-hand corner of the app – a more difficult place to access – in favour of adding their new ‘Reels’ and ‘Shopping’ icons in their place at the bottom of the screen.
Lead UX Designer Michael from EKM commented, “While I think the new shop tab was more of a business decision than a customer requirement, every company has to evolve, and Instagram is evolving with the times. Instagram has always been a form of gaining customers, but now you have direct access to sales without the need to go anywhere else.”
Similarly, YouTube, owned by Google, is making waves in the ecommerce industry by introducing shoppable video ads on its platform. Some suggest this is a move to compete with ecommerce giant Amazon as most consumers when researching a product will use YouTube to look at product reviews etc.
These moves made by large tech companies will change the way people shop online and are helping to support social shopping. Consumers will be able to shop for items straight from whatever social channel they’re browsing the item on. This is also great for businesses who utilise it as another sales channel in order to grow their business.
Focus on Sustainability
This year we’ve seen large companies making moves to increase their focus on sustainability as consumers now care more about a company’s social responsibility. Research shows that 87% of people would buy a product with a social and environmental benefit if given the opportunity and 88% would be more loyal to a company that supports social or environmental issues.
If you don’t already have some social or environmental responsibilities within your business a good place to start is looking at your packaging. Is there any way to make it more sustainable and environmentally friendly?
The younger generation, particularly generation Z, tend to look for companies that have good sustainability and who shout about it. We think this will be more of a focus in 2021 with a shift in consumer habits and spending.
Data from eMarketer, Euromonitor and SAP show that conscious consumerism will continue to influence the ecommerce and retail industry. Reported in an issue of the Sourcing Journal:
“eMarketer’s Trends 2019 report found 48 per cent of consumers who identify as “eco-conscious” read up on the clothing and shoes they’re interested in to understand the environmental impact as part of their buying decision. That’s an encouraging figure, but still a good distance behind categories like home cleaning and personal care products (73 per cent apiece) and food (61 per cent).
Most (70 per cent) believe it’s up to everyday people to be good environmental stewards, though 52 per cent want to see manufacturers of harmful plastic products take action themselves.
Nearly two-thirds (61 per cent) of millennials (ages 22 to 35) say they’ll pony up a premium for products created with their impact in mind, just ahead of the 58 per cent of Gen Zers (ages 16 to 21) who are similarly willing to part with more money for goods that won’t destroy the Earth.”
A big trend in 2020 due to the Coronavirus pandemic was an increase in popularity for shopping local. Supported by social media platforms such as Instagram creating new features and story stickers to support keeping local businesses operating, there has been a boom in consumers purposefully searching for products within their local area.
Consumers are now able to see the direct impact they can have within their local communities and this trend is set to continue well into 2021. If you’re a retailer yourself perhaps look into if you can source some of your supply chains from local businesses.
Shopping locally also helps to boost the value of your community. Creating great local connections can help boost the morale of business owners and shoppers alike. This also helps your local economy as well as supporting local jobs, and with many people losing their jobs this is vital to supporting local people too.
Lastly, with the steep pivot in the way people shopped in 2020, larger businesses are putting more of a focus on omnichannel shopping or multichannel shopping.
Keeping it simple, omnichannel retail is essentially creating and maintaining a presence on several channels and platforms. For example, a brick and mortar shop, mobile, social media etc and allowing your customers to interact and engage with your business across all channels and ensure a seamless, uniformed experience.
Consumers are more likely to shop for products across multiple channels within their journey from social media to in-store and online. Other channels include ads, Google Shopping, print media and word of mouth. It’s now said that a customer will need around 7 touchpoints in their journey before they make a purchase, so the more times you can connect your brand the more likely you are to make a sale.
This is why omnichannel marketing is a powerful tool that larger companies are already taking advantage of and smaller businesses and independent retailers should be doing the same.