As we close out what has undoubtedly been one of the most unpredictable years in recent memory, we’re looking ahead to 2021 with our Top 9 Commerce predictions. E-commerce grew at a rate that no one could have predicted at this time last year given the global impact of Covid-19 and with it came innovation and new practices that would have taken years to implement. Which are here to stay and which will need to evolve once the pandemic begins to subside?
A More Cautious Consumer
Personal safety while shopping was at the forefront of our 2020 shopping experiences. In 2021, this precaution will continue to govern how consumers shop for products with closer attention to where and how purchases are happening, taking everything from discovery to delivery into consideration.
1. Buying Psyches: Are You Stocking or Shopping? – Consumers plan to purchase their essential items - like paper goods, cleaning supplies and staple food items - in bulk online with 67% of consumers planning to be stocked up on all times with these items, according to Shopkick. Shopping will find an omnichannel balance, where the majority of purchases will be made in store but a greater share than ever will be online according to eMarketer. In 2021, we will likely see a continued blur of offline and online shopping to accommodate the new consumer expectations, including: in store purchase with home delivery, contact and cashier-less store experiences and tech-incorporated e-commerce experiences with AR & VR product experiences.
2. Monitored Spending - Spending will continue to be monitored due to the economic and psychological hits taken in 2020, whose effects will remain and even grow in 2021. According to Shopkick, 63% of shoppers plan to buy primarily sale or discounted items in 2021 while 40% plan to purchase more store-brand items versus name-brand and 65.4% of consumers do not feel financially secure going into 2021.
3. Store Visits, But Only If They’re Safe - When asked what it would take to make a US consumer return to a store, 69% responded with some form of COVID safety compliance vs. 10% would be driven by an instore event or sale. With vaccinations beginning in many countries around the world, the light of the tunnel is finally here. That said, we do not expect everything to go back to status quo, even once the vaccine has been widely distributed. While many will make a return to in-store shopping, we do not anticipate this to return to pre-pandemic levels
From Retailer to Experience Brand
With the rise of the cautious consumer, the retailer experience is also going to change. Differentiation will be the name of the game for retailers and those who will win in 2021 will do so by strengthening their omnichannel experience and take control of the commerce culture around them.
4. Development of Robust Retail Ecosystem – Throughout 2020, 70% of the top ten growing US retailers implemented either delivery, BOPIS, shop in store + home delivery combo, contactless, or immersive ecommece. As consumers continue to shop for home essentials online, the physical space within a retailer will face a renaissance which will include distribution and physical shopping experiences. Post-pandemic, having multiple modes of distribution will become more essential than ever to drive traffic and sales. Consumers will want the freedom to shop in physical retail and demand the convenience, enhanced content, and selection that digital offers. Retailers and brands that invested in creating seamless experiences across their commerce ecosystem in 2020 will gain disproportionate share post-pandemic.
5. Crafting Retailer-Specific Cultural Calendar – Owned shopping experiences will grow as a way to cement unique experiences as differentiators instead of battling on price. We’ve seen this through WayDay this year to compete against major shopping moments like Back to School, Prime Day and Cyber Weekend. Retailers that offer loyalty and overall CRM thinking to build loyalty and perceived exclusivity will win big in 2021.
6. Unique Partnerships to Enable A Differentiated Experience – With fewer in-store shopping occasions and the need for retailers to stop consumers from the “Buy Again” cycle, retailers will need to experiment. The growth of retail media will continue to grow as brands prepare for a cookieless world. Retailers today are in a strong position to help reach high potential audiences given their access to consumer purchase and shopper data. Given the interconnectedness of the Commerce space today, it’s important to look for new ways to marry data via partnerships.
Brands Owning Their Route to the Consumer
Fiscally conservative consumers seeking value will push brands to become retailers and attempt to reclaim marketing control that drive brand actions. Brands will invest in building sustainable online businesses, that buy them leverage with consumers and retailers again. Wholesale brands will continue to launch direct to consumer experiences, focused on establishing relationship with end-users, and collecting more data and insight.
7. Focus on Owning the Relationship – 2021 will continue to see the increasing diversification of D2C models. In additional to D2C stores and online marketplaces expect to see an increase in subscription models, voice-assisted commerce and social commerce as brands seek opportunities to cultivate long-term customer relationships as a catalyst for reducing acquisition costs and driving-up customer lifetime value. Fast forward and expect to see more and more D2C brands embracing a holistic and full-funnel approach to digital commerce, where a variety of direct and intermediary channels are tightly integrated, enabling the consumer to engage the brand universally and continuously without disruption or loss of information.
8. Embracing New Forms of Shoppable Media – 40% of social users are expected to buy something though social commerce in 2021 as brands couple content with consumption occasions or inspiration to drive a larger purchase. Four of the six most recently launched streaming services have an ad supported lite version with pipelines of in-app purchase functionality. We expect social commerce to continue to grow, both in the number of brands tapping into the space, as well as overall revenue generated, as consumers become more comfortable shopping via social platforms. We also expect the proliferation of commerce-focused products to continue across the core social players as we have started to see inroads with major brands selling their products directly on these platforms.
9. Solving Last Mile Delivery – Brands will partner with delivery experts to live up to the ambition and relevance that can match, and in some cases surpass, major marketplaces. 2020 accelerated the need for evolution in last mile delivery services. Companies such as Shipt, Instacart, and Uber Eats saw a surge in usage during the pandemic as in-store traffic declined. In 2021, we will likely continue to see high usage for these services, which will give them the infrastructure to continue growing offerings and build longevity beyond the pandemic. This can include expanded partnerships, like Instacart’s expansion outside of grocery with Best Buy and Sephora, as well as technology evolutions, such as autonomous delivery through drones and self-driving vehicles.
There is more complexity in Commerce than ever before, but with that comes opportunity to win big within your category. Our predictions point to several ways to succeed in 2021 including:
Invest in retail media in preparation for a cookieless world
Start to own your own shopper and leverage that in unique partnerships
Optimize your digital shelf content
Harness the power of influencers and shoppable video to drive conversion
Happy holidays and see you in 2021!