Laughing Samurai - E-Commerce Trends in 2021 & Beyond

A Mckinsey consumer sentiment report found that all retail categories saw growth in their digital market penetration, and credit and debit card spend increased by 35% from January 2020 to January 2021. They point out that companies with a strong online presence before the pandemic had the most growth during the pandemic and are looking the strongest as we start coming out of it.

The evidence suggests that how you started 2020 as a business online determined how you ended the year.

Still, we believe it’s not too late for you to beat the competition – that it is up to you how your business thrives online as we exit the pandemic.

Read on to learn more about the consumer changes that have taken place since January 2020, or skip right ahead to our e-commerce tips for 2021.

Digital Habits During the Pandemic

The pandemic brought an online demand for consumable goods – think stuff you’d buy in the grocery store or at Target. These products went very quickly from having very little online demand to huge demand. Though these products hadn’t penetrated the online market, quick movers in the digital space were in a position to outpace any other competition.

For example, Target had already been investing in their online shopping apps; that early investment (even though there had originally been very little expected demand) paid off.

A lot of things changed because of the pandemic, which we pointed out in E-Commerce in the New Age of Online Shopping. A lot of these changes were determined by pandemic consumer habits and bolstered by fiscal stimulus (the stimmies that reached consumers’ bank accounts).

Now though, as the economy opens up, more vaccines are distributed, and the world seems to be starting to return to normal, we’re here to point out that these digital consumer habits are here to stay.

Digital Stickiness

With many new consumers shopping online, and improvements to the feasibility and ease of online shopping, the expectation is that these habits are here to stay.

For example, Google Pay, Apple Pay and autofill forms have made it so frictionless to add payment information to our digital carts that digital spending is too easy and convenient to avoid. We no longer have to get up and go look for our credit cards when we shop from our phones on the couch.

Consumers are expected to keep their online habits, and it’s not just online shopping either. Digital entertainment, digital health and wellness tools (like Peleton), and curbside pick-up are going to stick around after the pandemic.

A Blended Experience

Consumers are looking to have physical reactions from the digital environment (and vice-versa), whether it’s an experience through an app, a product being shipped to your door, or using QR codes to pull up a restaurant’s menu on your phone.

Your customers are online. Now meet consumer expectations with better usability – it’s what the tech companies are doing.

Shopping Apps

Whether you’re buying or selling, social media has become a significant part of the digital shopping experience. The convenience that Facebook and Instagram Shops have added to the online shopping space shouldn’t be downplayed. They are making shopping online more social and immediate, and it has given brands new digital sales channels to optimize.

Snapchat is regularly adding new shopping AR features that take advantage of shopping through a lens. You can digitally try on cosmetics through the augmented reality of a Snapchat filter or on Google.

Or you can look up products on Amazon by performing an e-commerce visual search – searching for the product through a photo.

ecommerce 2021 - snapchat visual search
“Pandemic-Fatigued & Intend to Spend”

The Mckinsey report outlined that consumers are “pandemic-fatigued and intend to spend.” Whilst the report found that more than half of US consumers were expecting to splurge in the coming months, call it pent-up demand, it’s “higher-income millennials [that] intend to spend the most.”

The younger consumers can be expected to continue and build on their digital consumer habits, but they don’t monopolize the space. Digital stickiness is intergenerational, and older consumers were brought online this year.

A Digital Pivot for Older Demographics

Though trends had been predicting the rise of online shopping in older demographics, it was born out of necessity due to the pandemic. More Baby Boomers are shopping online in 2021 than had been predicted pre-pandemic and, for the most part, they’re here to stay.

The forced adoption is expected to lead to more permanent online shopping habits. With this in mind, make sure your website meets the needs of the varying demographics of your customers and how they interact with your website. Your website should be responsive so that it can fit the screens of Gen Z on their mobile phones, Gen X on their tablets and Baby Boomers on their desktops.

Make sure to frequently test the usability of your website so that you can be sure there is no friction stopping any of your customers from converting. We recommend at least trying some of these quick usability tests.

Online Trends That Are Here to Stay

Buy Local

Consumers have been hyper-aware of their discretionary spending during the pandemic. When there was money to spend, consumers used their dollars deliberately, purchasing from small companies, local companies, minority-owned businesses or whoever aligned with their values.

Mckinsey found that the level of brand-switching doubled in 2020 from 2019, especially among Gen Z and millennial consumers. While convenience and value continued to play a large part as to why consumers switched, “quality and seeking brands that match with their values” accounted for about 40% of brand-switching among younger consumers.

Consumer Loyalty

There exists a new kind of loyalty where consumers feel an obligation to purchase from companies that align with their values. Shopping in this climate can be seen as an extension not just of one’s personality but also their values and principles.

Consumption has become a statement. Big brands are doing their best to keep up with this trend, whether by virtue signaling or taking actual steps towards the goals that they have expressed. We have an interest in the sustainability efforts from the beer company BrewDog.

Smaller companies, by their virtue, already denote some kind of value and authenticity appreciated by consumers. Be sure to capitalize on your character, and build your brand.

The Customer Journey: From UX to CX

User Experience

Great design should kind of disappear as you engage with a website. It’s bad design that calls out and makes itself obvious. Businesses that take the time and energy to understand user behaviors, and study how a user engages with their website or app, create websites that convert users.

You can hire a website designer that knows what they’re doing, a UX agency that can test usability, and you can use website analytics to understand how users are engaging with your site and discover patterns, trends and pitfalls in user flow.

Basically, the easier your site is to use, the better the outcomes.

Customer Experience

But the online experience is now only part of the customer journey that companies are crafting. The digital experience of shopping for physical products inevitably extends into physical interactions with the product and customer touchpoints throughout the purchasing process, including reviews, complaints and returns.

We should consider online shopping as a holistic experience, and when we think through the customer journey map, it should be in the context of reducing friction and limiting pain points.

One of the best things you can do for your e-commerce site is improve the shipping experience of your product so that it suits the consumer. The best examples of this that we have seen are companies that make it easy to return products by including return labels in their packaging.

By making it simple to return your order, whether for good or to exchange for a different size or color, the purchasing cycle for the consumer becomes easy and frictionless. This removes some of the barriers to purchase, convincing some of your leads, and it builds customer loyalty because you have made shopping online more personal and flexible to suit consumers’ needs.

Consumer Safety and Liabilities

With a rapid increase in online traffic, the sheer volume of consumers and online activity opens up room for exploitation, phishing, bugs, credit card fraud and scams.

In many cases, this isn’t just damaging to your brand and your business’s balance sheets, but it can be a massive liability. In the past couple years, there have been more regulations and laws passed to protect consumers online. Understand what is required of you under the CCPA, and if you have any kind of operations in the European Union (or with European citizens), look into GDPR.

Five E-Commerce Tips for 2021

1. Customer Patience is Waning

Throughout most of the pandemic, consumers were quick to forgive long delivery times or imperfect online shopping experiences, especially if supporting a company was a way to express personal values.

But, as we approach the second half of 2021 and as the physical economy opens up more and more each week, we’re seeing that consumers are becoming increasingly particular about the standards that they expect.

Digital campaigns can no longer rely on users having no choice but to shop online. The competition between physical and digital channels is only going to become more competitive.

If you want a fighting chance in e-commerce, the fundamentals still apply and are more important now than ever.

Companies that focused on digital before the pandemic performed better than those that pivoted during the pandemic, and they will likely continue to outperform after the pandemic. The best time to invest in digital was pre-pandemic; the second best time is now.

2. Manage Your Reputation

Your reputation needs to be managed at every touchpoint to develop trust and increase the lifetime value (LTV) of your customers. Your website should be easy to use and make it easy to complete purchases. It should have a broad representation of demographics and demonstrate your values as a company.

By reducing customer friction with great UX, you optimize your site for easy purchasing. But your relationship with a customer shouldn’t end at the first sale.

All customer touchpoints need to be well-managed and that means curating the entire e-commerce shipping experience. Make it easy for customers to return or exchange items, and by taking away a pain point that could be a barrier to a sale, you make it more convincing to click purchase.

Find ways to encourage re-engagement with your brand from your consumers. Follow up, and ask for feedback or reviews. The negative feedback will help you address and improve your processes and give you a chance to win back a lost customer or reduce customer churn. The positive comments will help convert future customers.

3. Prioritize Security

Consumer security is another way to manage your brand’s reputation. Make sure your website is secure both for you and your customers so that they trust you with their personal data and credit card information.

Online shopping is all about trust: trust that the physical product will arrive as advertised and trust that you will handle the shopper’s information properly.

Taking a proactive approach towards digital security will also help you monitor your liabilities (in terms of regulation) as well as maintain vigilance for scams and threats.

If you build your site with Shopify or WooCommerce, communicate with them and find out what security standards are present or available.

4. Work All Your Channels

There are so many ways to market or sell online. You need to test all the channels that make sense to your product, and nurture all the marketing and sales channels that work for you.

Treat social media as its own storefront. With so many potential customers on sites like Facebook, they are quickly becoming the mall of digital shopping spaces. You can engage with both potential and existing customers, market your products in unique ways to large audiences and sell your products directly to consumers without them ever having to leave the app or visit your website.

But don’t use that as an excuse not to focus on your website. Don’t prioritize one channel over another; maintain your website because different types of customers will arrive there for different reasons.

Stay on top of trends and technology, and be authentic.

5. Hustle as a Digital Entrepreneur

The move towards a digital economy means that to adapt, you need to think in terms of digital entrepreneurship. While this isn’t a huge leap from traditional entrepreneurship, I’m saying it specifically as a way to think about building an e-commerce business that thrives in the digital marketplace.

With the same kind of sales and marketing hustle that has worked in the past physical economy; go forth and conquer the digital.

Need A Team?

We get it. Running a business and keeping up with the pace of digital spaces can be demanding. Reach out to see how we can help support you as you build your business online.

You read the whole thing!

Here’s what to do next:

1

Give us your email. We will treat it like gold and add some culture to your inbox.

2

Share this article on your favorite social network, especially Twitter or Linkedin.

3

Follow us

4

Share us in your favorite slack channel.