7 Trends That Will Shape the Future of eCommerce in 2021

2020 saw unprecedented growth for eCommerce. According to eMarketer, online sales around the world grew by 27.6%, meaning the sector is now worth an astounding $4.3 trillion. 

eMarketer’s most recent forecast also suggests that strong growth will continue throughout 2021. Despite the expected reopening of brick-and-mortar stores, eCommerce sales are set to grow by another 14.3%. 

The future of eCommerce looks bright but with everyone focusing their efforts on online channels, it’s also more competitive than ever before. Here are the key trends you need to know about to stay ahead of the curve in 2021.

1. Live video commerce will explode 

In 2020, live video commerce took off in Asia and now the Western world is catching up. 

Livestream shopping began in China five years ago and has grown in popularity ever since. In 2019, 265 million Chinese shoppers bought something through a live eCommerce stream. But, when the pandemic took hold last year, the medium truly began to thrive. 

Last July, live video commerce generated $450 million in Chinese sales in just one day. Lockdown has been the perfect way to bridge the gap between sellers and consumers – particularly for beauty, fashion and food brands. 

Now media platforms worldwide have added live, interactive streams to their shoppable video features. In 2019, Amazon Live was introduced to help members of the Amazon brand registry engage with shoppers, while Walmart recently partnered with TikTok to offer products via livestream. 

Instagram also offers in-app shopping across content, including Instagram Live, and Facebook has launched Live Shopping too. So if you’re wondering where to begin, there’s plenty of options available. 

2. Increased adoption of the online-to-offline model 

The online-to-offline, or O2O, model encourages online consumers to visit brick-and-mortar stores to collect or purchase products. 

Since the start of the pandemic, more retailers have embraced click-and-collect than ever before. But some businesses didn’t have enough inventory oversight to implement the service. While others have set up inefficient and lengthy processes which see click-and-collect orders prepared at warehouses and shipped to local stores – even when there’s plenty of stock already on the shelves at that location. 

This year will see retailers around the world implement the tools they need to view real-time SKU-level inventory by location. This will allow them to offer customers the best click-and-collect service possible. 

In the short-term, this will be about facilitating customer safety. But we envisage the popularity of the O2O model will endure beyond 2021 and play a key role in the future of eCommerce. 

Pre-pandemic data suggests that demand for click-and-collect was already strong. 53% of consumers start their shopping journeys online before making an in-store purchase, while 70% have picked up an item to avoid shipping fees. 

With almost a third of shoppers saying they’ve backed out of online purchases because two-day shipping wasn’t free, click-and-collect is a great way to reduce shopping cart abandonment and increase footfall in stores where there are more opportunities for conversion. 

3. ‘Fulfillment is the new black’ 

2021 will see the backroom boys of logistics become the ‘Mad Men’ (and women!) of eCommerce. 

Last year, fulfilment took on a whole new level of importance but much of the work being done was reactive. This year, it will take centre stage in brainstorm sessions and boardroom meetings as sustainable solutions begin to replace temporary ones. 

The outcomes are likely to vary from company to company. We’re excited to witness the fresh and creative approaches to wooing customers and reducing costs that forward-thinking businesses experiment with. 

After the issues many retailers faced last year, we expect to see more supply chain diversification and warehouse automation. There will also be more micro fulfilment centres and dark stores as retailers strive to offer lightning-fast delivery. 

We anticipate that some brand-focused businesses will create unique and personalised unboxing experiences for their customers too. 

In the coming years, fulfilment will also be a key area for finding cost savings as retailers assess the reams of data at their disposal to identify cost drivers. 

4. Brand building is on the rise 

As brands recover from the early impacts of the Covid-19 pandemic, many of them are rushing to invest in brand building. 

Throughout 2020, companies cut their investments in branding as they pivoted their product offerings and adjusted their marketing campaigns. Almost half of marketers cut their overall marketing spend in the latter half of the year. But now they need to remind audiences about their brand and what it’s all about. 

Even companies in struggling industries, like travel, are beginning to invest in brand promotion. For many, it’s all they can do in the short-term. But even if demand remains low, brands need to stay at the forefront of their target audience’s mind. This important so that they’re in a favourable position when spending picks up once again. 

With so many sales taking place on marketplaces, brand building is a strategic way to get audiences searching for your products wherever they shop. You can add a ‘Where to buy’ button to your own platforms enabling shoppers to buy products through their preferred channels. 

5. eCommerce tech is the future 

Over the past decade, VC firms have been investing heavily in scalable eCommerce platforms and tools. In 2018, 2019 and 2020, they invested $3.2 billion, $2.6 billion and $1.6 billion respectively. 

Now, because of the acceleration of eCommerce that’s taken place during the pandemic, they are keen to see products deployed before growth slows. So expect to see more advanced tools and features become available in the next year or two. 

On the part of those using eCommerce tech, recent research from Forrester suggests that retailers will be primarily investing in customer-facing technology this year. Think tools for customer service, customer analytics, marketing, sales and supply chain management. Brands who manufacture goods will be more focused on sales and marketing systems. 

Businesses will also be consolidating and carefully curating their eCommerce stack to ensure the solutions they use can have maximum impact. 

6. A return to SEO and retention marketing 

Brands are coming to realise that paid advertising can be fickle and fleeting. As a result, many of them are refocusing their efforts on organic search. 

With around 27% of shoppers taking advantage of ad blockers, this move makes sense. While PPC ads aren’t going anywhere, fewer people will be able to see them so brands looking to the future of eCommerce are already working on their organic rankings. 

Setting their sights beyond the traditional top ten spots, brands of every size are investing in short-form content, like FAQs. This will help their websites appear in both featured snippets and voice search results. These are both now used by 27% of internet users

As we’ve mentioned, customer-facing tools will be big this year too. After benefiting from a surge in online shoppers last year, many eCommerce brands want to nurture these new converts in order to drive recurring revenue. 

7. Finding the balance with DTC 

Last year, direct-to-consumer sales grew by almost a quarter in the US. But despite this massive growth, they only accounted for 2.6% of the total eCommerce market. 

While direct-to-consumer channels still hold massive potential in the future of eCommerce, the reality is that just ten mega-sites attract nearly 60% of all eCommerce sales. Amazon alone captures 39% of sales – and it relies on third-party sellers for more than half of these. Want to build an optimised strategy for Amazon? Learn more here

So for now, brands need to knuckle down and figure out how to work with resellers to scale their business – even if they’re working on a DTC strategy at the same time. 

Want to build a winning eCommerce strategy for 2021?

ChannelSight has a team of experts that can help implement solutions that can enhance your eCommerce strategy. To learn more, contact us today. 

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