13 Trends eCommerce Retailers Can Expect to See After COVID
by Ruthie Carey
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The COVID-19 scare wreaked havoc in nearly every facet of life in 2020, including throughout the business and retail world. Panicked shoppers stocked up on necessities as supply chain disruptions hit the headlines and increasingly bare store shelves.
Simultaneously, a massive portion of retail spending moved into the eCommerce realm as consumers had few or no other options or felt safer shopping from the confines of their own homes.
However, it has now been more than a year since the lockdown orders were imposed, and things are beginning to resemble something near normal. While it is impossible to make accurate retail predictions in the current environment, it is relatively safe to say that COVID trends related totop-selling product categories for eCommerce will stay the course for most of the current year.
That said, as things increasingly go back to the way they were before, it is vital for merchants to consider what eCommerce after COVID looks like and how to navigate those waters successfully.
The fact of the matter is that eCommerce after COVID does look different as the effects of the coronavirus have potentially permanently altered the behaviors, shopping patterns, and priorities of many. Moreover, the changes that have (and will continue to) occurred are reshaping the retail industry.
That said, today, we will be taking a look at what eCommerce after COVID is likely to look like and how merchants can implementa roadmap to retail recovery that will help brands to align themselves with the next iteration of online retail.
eCommerce After COVID: 13 Trends Retailers Can Expect to See
The plain fact of the matter is thatthe impact of coronavirus on eCommerce and the retail industry, in general, has been rather profound. What this means is that the resulting changes that COVID-19 will have on the industry span a wide swath of dynamics and considerations. Everything from the people who shop online to the products they buy, how they buy them, how much they are willing to spend and more will all be touched in the eCommerce after COVID era.
Some of the many, many changes that merchants can expect to see include:
1. Changes in Online Consumer Age Groups
While the impact of COVID-19 has been felt across all generations, some are changing their behaviors more significantly than others.
For instance, given that older generations are seemingly more susceptible to the viral outbreak, the baby boomer generation has seen a significant uptick in online shopping. Moreover, in the eCommerce after COVID era, their newfound affection for digital platforms is likely to persist.
“LaserShip commissioned the study from Hanover Research to survey over 1,000 online shoppers in the U.S. to understand how the pandemic has affected consumer shopping behaviors and expectations… Baby Boomers, historically more hesitant to shop online, were forced to adapt their behaviors when COVID-19 hit because they weren’t comfortable shopping in stores. The study found this behavior will continue, with nearly half (47 percent) of Baby Boomers planning to increase their online shopping after the pandemic.”
“According to a recent analysis via Resonate’s Ignite consumer intelligence platform, boomers are almost 14 percent less likely than the average American to say they’ll return to grocery shopping in-store post-pandemic. Given their spending power, baby boomers are an important demographic for retailers… Our data shows that in the next 90 days, baby boomers are 190 percent more likely than the average American consumer to start a food delivery service subscription… 14 percent more likely to increase their likelihood to purchase products online.”
Clearly, when analyzing the eCommerce after COVID landscape, older generations are going to play a significant role in shaping the industry.
2. Product Category Purchase Alterations
It is readily apparent to most that during the height of COVID-19, people’s shopping patterns were altered dramatically. While some of those patterns may have ebbed temporarily, many are likely to persist as an increased awareness has been placed on the fragility of people’s health and the supply chains on which so many rely.
That said, many product categories will be impacted either positively or negatively as a result of this newfound cognizance. Some of the more notable category changes include:
Health and safety products: Because of the recent health scare, many are more fixated on their well-being than ever before. What this means is that while the sale of hand sanitizer and face masks are likely to decline significantly, the sale of vitamins, herbal supplements, probiotics, a myriad of hygiene-related items and even things like juicers are likely to remain popular in the eCommerce after COVID era.
Shelf-stable foods: Another category that saw a significant boom in 2020 was shelf-stable goods. Items like pasta, rice, beans, canned chili and the like all became hot commodities as store shelves emptied. Given that many do not want to repeat the feeling of going without should something happen again, shelf-stable goods will also remain popular, though not as popular as they were in 2020.
Food and beverage items: Unlike the slight downtick in the sale of shelf-stable goods, general grocery items are likely to see a massive uptick in sales over the next several years. While part of this is undoubtedly driven by the aforementioned habits of the baby boomer generation,online grocery sales are expected to surpass $100 billion in 2021 and continue to increase over the next several years.
Luxury goods: While all of the previously mentioned product categories are likely to enjoy healthy sales for years to come, the future is much more questionable for luxury goods. AsForbes details on luxury industry challenges, 2020 was the year that “the global personal luxury goods market imploded, losing €64 billion ($79 billion) in sales resulting in a 23 percent decline. That is the greatest year-over-year drop recorded in the nearly 25 years Bain & Company tracked the luxury market… With sales reaching only €217 billion ($331 billion) in 2020, luxury won’t climb out of its hole until the end of 2022 or early 2023 when it will finally reach 2019 levels of €281 billion ($344 billion).”
Fashion and apparel: Similar to the luxury goods industry, people’s priorities are taking them in other directions, meaning that fashion and clothing are likely to see reduced sales for the next several years. Even in the eCommerce after COVID market, the fact is that these items are not what people are currently interested in purchasing.
Moreover, alongside the changes in product category sales, consumers are also undergoing a shift in their spending habits.
3. Shifts in Consumer Spending Patterns
As it stands, eCommerce sales are way up from their normal levels. However, this does not mean that overall spending is up overall. In fact, as it stands, many are finding themselves financially strained due to the impact of temporary layoffs or outright business closures.
“The economic scars of the pandemic remain highly visible… About 47 percent of respondents attribute their anxiety to financial stress and 28 percent to their employment situation. And a sizable share of respondents is worried about upcoming payments such as rent, credit card, and mortgage.”
What this ultimately means is that, while eCommerce is indeed booming, the overall monthly spending per consumer has dropped considerably from 18 months prior.
At the moment, some sites are busy reporting an uptick in credit card spending and consumers “splurging.” However, as most of these pieces also note, this is largely driven by a small influx of money as people receive their third round of stimulus checks.
However, that money and the surge of spending is likely to soon abate as financial pressures set in once more.
Therefore, in the eCommerce after COVID landscape, what merchants are most likely to see is a significant increase in eCommerce sales, but an overall drop in spending.
That said, this is something of a short-term view of the post-COVID eCommerce economy. Taking a bit of a longer view, sellers are likely to see overall spending increase back to 2019 levels, with most transactions being focused on eCommerce.
“Indeed, recent data show that we have vaulted five years forward in consumer and business digital adoption in a matter of around eight weeks… Fully 75 percent of people using digital channels for the first time indicate that they will continue to use them when things return to ‘normal.’ Companies will need to ensure that their digital channels are on par with or better than those of their competition to succeed in this new environment.”
Throughout history, there have been a variety of companies such as Netflix, Amazon, Lego and others that made massive gains during similar periods.
However, no matter if merchants are taking the long view or the short, the fact of the matter is that capitalizing on this historic moment in eCommerce is dependent upon how much sellers invest into their digital experience and footprint.
4. Greatly Elevated Customer Experiences
While it is something of a foregone conclusion that eCommerce as a whole will benefit from the current situation, the truth is that some businesses will see far more gains than others.
As more retailers and consumers move into the digital space, more sellers than ever will be offering similar or identical products to one another. For this reason,enhancing the user experience is a key element to setting a brand apart from its competitors and capturing sales.
Part of how merchants can earn new customers and retain their existing ones will be to implement loyalty programs, run new promotions, offer increasingly personalized shopping experiences and expand the products that they carry.
However, there are a variety of factors that go into creating a great customer experience, which is also something that was highlighted byGoogle’s latest algorithm update.
When aiming to craft a superior user experience, retailers must consider elements like an intuitive user interface, payment options, customer support, website load times, a secure shopping experience and a myriad of other components.
As far as consumers are concerned, with a seemingly unlimited number of options at their disposal, there are zero reasons to wrestle with slow-loading, insecure websites.
Therefore, it is absolutely critical for retailers to beinvesting in eCommerce right now to produce a premier user experience for consumers who inhabit the eCommerce after COVID landscape.
5. eCommerce Grocery Platforms Proliferate
Groceries have been mentioned a few times up to this point. The reason for this is that the way in which people acquire their food is currently undergoing a massive shift.
During the COVID-19 lockdowns, scores of individuals turned toward online services like UberEATS, DoorDash, Instacart and others. In fact, more than 40 percent of Americans who ordered groceries online in March of last year did so for the first time ever in 2020.
As we begin to move into the eCommerce after COVID era, the trend of online grocery sales is not going to let up at all. In fact, this method of grocery acquisition is set to explode to new heights.
While it was already mentioned that online grocery sales were poised to climb past $100 billion in 2021, the more long-term picture shows an even more dramatic escalation.
“Our study with Incisiv shows that online grocery sales will account for 21.5 percent of total grocery sales by 2025–an estimated $250 billion, which is more than a 60% increase over pre-pandemic estimates… Retailers must continue to grow their eCommerce offerings to meet the demand for online options. Shoppers will reward grocers that invest in improving their online ordering and fulfillment experiences with continued loyalty in the years ahead.”
The fact is that online grocery sales seem to be one of the more dramatic and permanent changes that took place in 2020 and will continue to define the eCommerce after COVID landscape.
6. Digital Giants Grow Stronger
As most are well-aware, massive online entities like Amazon reaped immense rewards during the COVID-19 lockdowns. Alongside the spike in eCommerce activity, sites like Amazon saw a tremendous influx of orders. Ultimately, forced store closures also forced money into the pockets of the ultra-wealthy, withbillionaires getting 54 percent richer during the pandemic.
“The flood of online orders propelled Amazon to record sales during the second quarter. It then spent billions on coronavirus-related investments like safety gear for workers and its internal testing initiative, called Project Ultraviolet… While the U.S. navigated widespread unemployment and economic turmoil, Amazon kept hiring. The company brought on more than 175,000 new warehouse and delivery workers between March and mid-April to be able to fulfill customer orders. Amazon added 36,400 people in the three months ended June 30, bringing its head count to 876,800, an increase of 34 percent year over year.”
However, this is just the beginning. As the piece goes on to state:
“Amazon’s pandemic-fueled growth isn’t expected to slow down soon, especially as it prepares for the back-to-back shopping rush of Prime Day in October and the holidays after that. In fact, Amazon is expected to exceed $100 billion in quarterly revenue for the first time ever in the fourth quarter, according to analysts surveyed by FactSet. That would make it one of the very few American companies ever to cross that threshold, alongside Walmart and Exxon.”
“Walmart’s online sales skyrocketed in its latest quarter, thanks in large part to people’s changing shopping habits due to the COVID-19 pandemic. As CNBC reports, Walmart’s online sales shot up 79 percent in the company’s Q3, which ended on October 31. Not only are customers buying more products like clothes and toiletries online, but they are also flocking to Walmart for groceries delivered to their door… In addition to online sales increasing by 79 percent, U.S. same-store sales were also up by 6.4 percent. However, the key takeaway from this quarter is that Walmart is increasingly looking like it will have little problems holding its own against Amazon in the online retail space.”
While this kind of information comes as a shock to literally no one, the implications of Amazon and Walmart’s growth are twofold for the eCommerce after COVID arena.
Firstly, for retailers who weren’t already selling through Amazon and Walmart’s marketplaces, it is rapidly becoming a necessity for online survival. Given the oppressive size and cutthroat nature of each of these companies, smaller merchants must utilize the power these platforms wield, lest the company go extinct.
Secondly, the growth of each of these platforms should once again underscore the necessity for online sellers to offer an out-of-this-world customer experience. If merchants are not aiming to produce experiences that might rival those found on more ubiquitous platforms, they will ultimately lose market share in the long run.
7. A Surge in Social Commerce
Following the fortification of monolithic digital organizations, the same is largely true for social media giants like Facebook and Instagram.
In 2020, as the physical retail shutdowns continued to persist, social media companies like Facebook introduced new retail-orientedfeatures like Facebook Shops, which was launched alongside Shops on Instagram.
However, these were far from the only social commerce elements introduced in 2020. In addition to Facebook’s new sales component, the industry also saw apartnership between Shopify and TikTok that enabled Shopify sellers to convert products to In-Feed video ads, the introduction of Snapchat native checkout, which lets users buy straight through the Snapchat app, and a myriad of other developments.
The truth is that social media companies have been increasingly catering to eCommerce crowds for quite some time now. For many years, there have been continual rollouts of features like Instagram Shoppable posts, a variety ofPinterest eCommerce features and tons of retail-focused ad offerings.
With the recent explosion of eCommerce activity, social media companies have aimed to capitalize on the moment by integrating ever-more compelling shopping features into their platforms.
Therefore, when examining what eCommerce after COVID looks like, it is inevitable that social commerce will become an integral part of the broader eCommerce experience for companies and consumers alike.
8. Additional Augmented Shopping Experiences
Augmented reality (AR), artificial intelligence, and machine learning technologies are all making a substantial impact in the eCommerce arena and the broader digital environment as a whole.
Way back in the before time of 2019,a Nielsen global survey on augmented retail revealed that AR/VR was the number one technology that consumers wanted to assist them in their daily lives. Moreover, a full 51 percent of respondents stated that they were willing to use AR to “assess products.”
While AR experiences aren’t necessarily new and many companies (IKEA, Target, Home Depot, Sephora, etc.) have developed these kinds of digital shopping interactions, the fact is that the lockdowns of 2020 have placed a renewed focus on developing augmented shopping experiences for consumers.
Moreover, whereas developing AR shopping adventures used to be reserved for only the mega-brands who could afford to shell out the cash, this dynamic is also changing.
For instance, in 2018,Shopify AR was announced, thus providing retailers access to an easy-to-use toolkit for building AR experiences to showcase their products to the public.
However, what might be even more important is that these kinds of augmented shopping experiences work to increase sales. AsShopify stated via Twitter in September 2020:
“Interactions with products having 3D/AR content showed a 94% higher conversion rate than for products without AR/3D.”
In the era of eCommerce after COVID, it is extremely reasonable to assume that augmented shopping experiences will become increasingly ubiquitous as brands attempt to eliminate the limitations of eCommerce and elevate customer experiences to new heights.
With as much focus placed on the customer experience, it seems that there is a massive blind spot when it comes to reliably delivering products to customers. The fact of the matter is that disruption to supply chains can cause significant manufacturing and shipping delays. If a company doesn’t have a strategy in place to meet demand during times of potential backlogs, the customer experience could be completely ruined.
When it comes toeCommerce and supply chain management, network uptime is a crucial aspect of the security of the supply chain. However, understanding the hardships that were faced in 2020 (even for the likes of Amazon), in the era of eCommerce after COVID, retailers must possess multiple options when it comes to sourcing materials and labor.
Therefore, merchants must seek to build relationships with a panoply of vendors who would be capable of meeting the complex compliance requirements of various industries.
10. An Increased Focus on Wellness Products
As touched upon earlier, the wellness category is one that is likely to be a big winner in the eCommerce after COVID era. The fact of the matter is that, whileAmericans’ worry about catching COVID has dropped to a record low, the events of the past year have still placed a considerable focus on people’s health. Therefore, products related to health and well-being will continue to be an important area of consumption for many folks.
“Nearly two thirds (63 percent) of Americans have already adopted new, positive health routines since March, implying that the pandemic has inspired respondents to prioritize their health year-round. Many of the changes Americans made suggest they are treating their health more holistically by focusing on measures like exercising for the mental health boost it can provide (24 percent), eating healthier (23 percent), being more mindful (22 percent) and getting better sleep (20 percent) … Nearly all (96 percent) respondents who made positive health-related changes amid the pandemic reported that they plan to continue embracing healthy habits in 2021.”
Understanding this, products like exercise equipment, vitamins and supplements, meditation aids, organic foods and similar products are likely to enjoy fantastic sales in the eCommerce after COVID era. Moreover, those who sell digital tools like exercise programs, guided meditations and similar types of self-care and mental wellness products can expect to see an increase in sales over the next several years.
11. More Brands Offering Same-Day (or Faster) Delivery
Alongside the need to diversify potential fulfillment options and methods, merchants across the world will likely feel the pressure to provide increasingly faster delivery choices to consumers.
With companies like Amazon, Walmart and Target blazing the trail with same-day delivery options, customer expectations for shipping times are steadily increasing.
The fact of the matter is that in today’s age of instant gratification, online shoppers want their products as soon as humanly possible, and sometimes they want them even sooner than that.
The reality of the situation is that delivery for online orders is only getting faster over time. As companies like Amazon and Walmart continue to push the envelope, it is incumbent upon retailers to try and maintain pace.
That said, when considering what eCommerce after COVID could potentially look like, it is almost certain that same-day delivery options will become the norm for this new paradigm.
12. A Surge in Smart Speaker Shopping
Looking back on themobile eCommerce trends of 2020, it was already clear prior to the lockdowns that fueled the eCommerce explosion that voice-activated shopping was on the rise in a big way.
With millions of homes now possessing increasingly sophisticated smart speaker devices, it is only a matter of time until voice-activated shopping explodes in popularity. In fact, this trend is well anticipated as 2018 forecasts showed voice shopping being estimated to hit over $40 billion by 2022.
“About 20% of consumers who own voice-activated speakers are using them for some shopping-related activities, including research and creating shopping lists, and consumer adoption is ramping up steadily.”
Fast forward to the current year, and products like the Amazon Echo and Google Home have become popular tools for online shopping during the pandemic.
As we move into the eCommerce after COVID era, retailers can expect to see increasing numbers of consumers shopping online through voice-activated smart speakers and similar types of devices.
Honestly, this trend is to be expected given the significant increase in online activity in general. Additionally, given that many merchants have yet to adjust to the higher sales figures than they are used to, criminals are taking advantage of the confusion.
With the relative rise in cyber criminality, account takeovers of eCommerce customers have seen a spike. This is particularly problematic as the customer risks losing money, thereby negatively impacting the shopper’s relationship with the merchant in question.
For those who fall victim to such scams, approximately 50 percent will opt to take their business elsewhere.
Therefore, as online activity increases in the eCommerce sector, it is critically important for merchants to beef up their digital security measures to protect customer information.
eCommerce after COVID is going to look a lot different than it did prior to the pandemic. As online activity across the world increases, retail companies will be expected to elevate their online presence, user experience, fulfillment promises, security, and the rest to new heights.
Moreover, as shoppers continue to interact with merchants at increasing frequencies, their expectations of digital retailers will also rise. While this can seem like something of a vicious cycle, in reality, it is fantastic for the industry as a whole.
As the old saying goes, rising tides raise all ships.
If your brand wants to prepare itself for eCommerce after COVID and push its customer experience to previously unseen levels of excellence, then reach out toVisiture’s user experience specialists.
Our award-winning team of eCommerce experts can help to develop a user experience tailored to your company’s customers, guiding shoppers through a first-in-class experience that stands out and converts.
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A graduate of Sewanee: The University of the South, Ruthie joined Visiture in 2020 with a liberal arts degree steeped in writing, editing, and content marketing. Interests include hiking with her black labrador Derby, spinning front row at CycleBar, and frequenting Cava.
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