2020 has brought monumental change to so many aspects of our lives--one of the largest changes being within commerce. Businesses and consumers have adapted rapidly to an entirely new normal. And communities have come together to support local businesses through these trying times.
If we can take anything away from this pandemic-filled year, it should be the fact that business owners are resilient! And e-commerce is the future. But, as trends continue to shift and consumer habits change, it's important to always be prepared.
Shopify recently released a year-end “Future of Commerce” report, noting five key predictions based on trends from their data. Spoiler: the next generation of consumers will likely change commerce as we know it forever. Here are the key takeaways from the report..
The Power of Young Consumers & E-Commerce
The pandemic definitely added gas to the e-commerce “fire” and young consumers are keeping it lit.
Shopify reports that 84%of consumers have shopped online since the pandemic, with over half of consumers indicating they feel uncomfortable shopping in-person. Young consumers, in particular, led the online shopping trend and they are bringing new expectations for businesses along with them.
This younger crowd is more likely to shop via social media, with 54% indicating they discover new brands on social platforms. They also have different attitudes about their impact on society, with 62% of younger consumers saying they prefer to shop for sustainable and green products.
These new consumer attitudes are predicted to transform physical retailers, giving local businesses a step up. The report indicates that “omnichannel features” will give new advantages to these smaller, local merchants. This means that it is becoming more and more crucial to have diverse sales and distribution channels to meet the needs of nearby consumers.
In fact, proximity is becoming a powerful and profitable selling feature for merchants, as people are more apt to use alternative pickup and delivery methods now. When choosing local pickup or delivery, online shoppers spent 23% more and had a 25% higher cart size. So, local businesses are seeing unique benefits.
These local customers are also bringing more conversion, with local shoppers yielding up to 20% higher conversion rates. The report makes it clear that brands need to adjust to meet consumers where they are—especially during this time. It can be challenging to gage, but demonstrations of authenticity, transparency, and accountability have been shown to go a long way.
In fact, consumers are now much more likely to look for independently-owned businesses for these reasons and more..
Rising Advantage for Independent Businesses
Shopify’s report indicates that 50%of consumers look for independently owned businesses to support and 65% say they support small businesses. These new intentions aren’t fully reflected in purchasing habits, as traditional big-box retailers still remain dominant.
However, new pandemic-era shopping habits are expected to gain traction moving forward, as consumers are increasingly open to supporting lesser-known brands. The data indicates that certain features are essential to the success of independent retailers, with convenience and reliability being the most important.
In general, convenience has become a central element of consumer attitudes. With faster ways to pay digitally and more flexible payment options, consumers have very high expectations for the technological orientation of your business.
59% of online shoppers say that free delivery would improve their online shopping experience, and close to half say that shipping is frustrating when it takes too long. It seems that 21st century Amazon-level-speed has become the new metric for shipping expectations, so businesses need to adapt if they want to keep up with demand.
One arena of communication that has shown promise in converting online sales is conversational commerce. This is the online dialogue that happens between merchants and customers-- and it is becoming really important. These interactions drive genuine connection, speaking to new audience desires for authenticity and reliability. In fact, the sales attributed to communication with a brand increased by 185% during the March-July 2020 time period.
Independent retailers need to meet customers where they spend their time online. One way to do this is through honing in on your social media. Marketing on Instagram and Facebook has seen continuous growth in monthly active users and consumers are purchasing through social media at growing rates.
Merchants indicated that the quality of digital user experience is a key factor for their business, with 60% using online payment services.
“Buy now, pay later” has also grown in popularity by 60% since the start of the pandemic. So, it is clear that resilient retailers will need to examine the online sphere of their financials to meet consumer demands and trends.
If one thing is for sure it is that the world is changing rapidly— and the world of business is being pulled right along with it. Nonetheless, retailers have been resilient. Shopify's report reminds us that entrepreneurs and local businesses are the backbone of communities and needed to drive economic growth.
Things will never stop changing, but there is significant hope in the shifting tides. If you pay close attention to new norms and trends, you can be prepared to adapt and innovate— two essential verbs that will give you the power to protect your business for the long haul.