It’s that time of year where we reflect upon the prior year and make informative predictions for the months ahead to adjust our business activities and refocus strategies.
Unsurprisingly, due to the nature of 2020’s events, just about every industry and business will be looking to 2021 with hope and optimism, as well as a strong sense of caution.
And while the physical retail sector has been one of the hardest hit, e-commerce has experienced the opposite effect, but that’s not to say it has been without its challenges. Consequently, businesses need to respond to shifts in the market for the chance of a successful future.
Nate Burke, CEO of Diginius, a proprietary software provider for digital marketing and e-commerce solutions, shares his views on 2021.
Physical retail outlets have been facing uncertainty for long, due to multiple factors, including high commercial rents, a shift towards digital-first consumer shopping habits and online competitors’ ability to undercut prices.
These factors have resulted in the gradual digital transformation of retailers, whereby online offerings have become a primary focus for business efficiency.
Proof of this is the year on year increase in online sales. But the spike experienced in early 2020 is the basis of the first prediction, which is high levels of online shopping will continue into the next twelve months, with no going back to pre-COVID ways.
Businesses that made the digital switch will want to continue maximising sales through online channels as the pandemic has created a permanent digital shift in consumer shopping behaviours with more predicted to shop online post-pandemic than before it.
Alternative sales channels
The next prediction is fuelled by both digital innovation and the rise in eCommerce. As more and more businesses enable eCommerce functionality, there will inevitably be greater competition and an increase in options for consumers to choose from.
Therefore, the channels through which businesses sell their products will widen and become more accessible to generate the greatest chance of items or services being seen and ultimately, chosen over competitors’.
Fortunately, the rising popularity of online marketplaces and the developments in social media shopping functions, means businesses now have the opportunity to distribute products through more channels than ever before. And this will only continue to increase in the year ahead.
When it comes to marketplaces, Amazon leads the way with a year on year rise in net revenue. Not only is the business’s performance evidence of this, but so is the consumer shopping behaviour shift which is seeing more consumers go directly to Amazon first (40%) when searching for a product, as opposed to Google (30%) or a brand’s owned channel (19%)
Facebook and Instagram are also notable channels for eCommerce businesses, with YouTube growing in popularity and prominence.
Although these platforms are designed for social interaction and content consumption by nature, in recent times, they have placed greater focus on shopping with Facebook’s marketplace, Instagram’s shopping tab, and YouTube shopping ad functions, for example.
One of the biggest benefits of utilising social media as a shopping channel is the streamlined customer experience that can be created. ‘Fundamentally, shoppers can see a product on their feed, click through to view it and then place an order without even having to leave the app.
But as well as convenience, social media is an effective shopping channel as platforms are key influences on consumer consumption decisions anyway. In fact, 80% of Instagram users and 68% of YouTube users say content on the respective platforms helps them decide whether to buy a product or service.
Therefore, as more businesses realise the impact of these platforms, we’ll see social media being added to an increasing number of online sales strategies.
Many are hopeful for a return to some form of normalcy in 2021. And with the potential reopening of physical retail, businesses will be faced with the opportunity to maximise their presence and in turn, sales through both online and offline channels, creating an omnichannel brand offering.
This way, brands will appeal to a larger customer base. And no matter which channel a customer chooses to use to interact with the brand, they can expect a consistent quality of service and overall experience.
But in 2021, what many will realise is the challenging nature of up-keeping both channels. Of course, there will be a greater financial burden due to property costs and employee wages, which will only be felt deeper due to the volatile, COVID-struck economic climate.
Instead, a true omnichannel experience will be created through integration and innovation whereby each channel is used to support and supplement the other.
For example, we see retailers using their physical locations to relieve some of the online service’s pain points, such as delivery and returns processes. Some retailers are already excelling in this, including supermarkets, Next, John Lewis and Argos who have all integrated click and collect services and other smart shopping options firmly into their primary offering.
As technology and creativity move on, we’ll also begin to see an increasing number of concept stores that make shop visits an unmissable personal experience to each customer and adds value to their purchase, rather than merely a distribution channel.
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With all these additional sales channels, retailers will see the benefit of digital management systems that relieve some of the administrative burdens and enable greater efficiency.
A solution which provides a single comprehensive commerce platform for brands and retailers. Combining activity across every sales and logistics channel, these platforms allow for a unified customer experience, lower cost of ownership, and increased business capabilities across physical stores, websites (B2B and B2C), third party and company-owned marketplaces.
With all this information in one place, businesses can provide better customer experiences as order information can be retrieved faster and response times reduced. Customer updates can also be automated to ensure any important information about an order process is timely communicated, with no additional workload for employees.
And as well as customer-facing benefits, these systems enable better collaboration between points in a supply chain, streamline a business’s processes, and reduce waste and increase efficiency.
For example, orders for low stock items can be placed automatically and only when they are needed. This way, businesses won’t have cash tied up in unused products and materials, and resources can be reallocated to other critical activities. And as these systems collect and analyse data, they can also provide meaningful insight into market trends, that can inform accurate future predictions and business decisions.
These trends are evidence that the eCommerce landscape is ever-changing. While digital transformation is set to continue, the speed at which it has occurred for retailers this year means the eCommerce market will inevitably undergo further significant change in the months to come.
Only businesses that are prepared to adapt now will experience better growth and success.