The retail landscape was changing even before COVID-19. Check out the top 10 online retail trends the retail industry should take note of to have a successful 2021.
Coronavirus has irreparably shaped the retail sector, with retailers tasked with figuring out how to keep up with sales in a digital space. Even 2020’s Black Friday experienced a noticeable change, with Amazon offering holiday deals earlier in the year and reporting the biggest sales it has ever experienced.
Clearly, the industry is trending toward the digital space. But how can companies keep up with trends and craft a strategy that will allow them to start selling in 2021? We have a few ideas!
Changes for the Retail Industry
It’s increasingly clear that, due to a changing landscape first kickstarted by technological advances and accelerated by COVID-19, most retailers won’t be able to rely on their old strategies and business models to compete effectively in a post-pandemic world. Yet, the landscape isn’t as dire as we initially were led to believe. According to the National Retail Federation, despite dismal reports, the retail industry is growing – in fact, retail sales have grown almost 4 percent annually since 2010. And while the retail industry has had to contend with changes brought on by online shopping habits, online sales make up 10 percent of all retail sales.
When it comes to brick-and-mortar locations, retail stores are not doing away with physical locations entirely. In fact, according to a report from IHL Group, for each company closing stores, 5.2 are opening stores. For every segment of retail – including superstores, convenience stores, drug stores, specialty hard goods, specialty soft goods, mass merchandisers, food/supermarkets, and department stores – there are more companies, such as small businesses, opening stores than closing stores.
At the end of the day, it’s obvious to onlookers and industry experts that the retail industry is transforming. Driven by new technology, evolving consumer spending, and surprising new innovators, retail chains are bound to make a splash over the next decade. And as the industry evolves, industry leaders and analysts are diving into the merging of the digital and physical worlds found within modern retail business that lead to high quality products.
Innovative Online Retail Trends to Watch in 2021
1. Social Commerce – Social commerce refers to native shopping experiences that take place on a social media platform and offer shoppers an even more seamless way to shop online. Instead of tracking down desired purchases through to a third-party website, users use credit cards to buy directly from a social media app or site. And platforms are starting to form strategic partnerships to deliver what shoppers want. For instance, TikTok recently partnered with Shopify to deliver continuous social commerce experiences. In 2021, we can expect to see social commerce become an even more central part of the global ecommerce website experience for shoppers and brands alike.
2. Influencer Marketing will Continue to Transform – with COVID-19 forcing most influencers to embrace raw, real aesthetic to connect with shoppers, we can bet that brands will continue to partner with those who can deliver the most authentic experience to their audience. Now, the focus will be on producing unique influencer content that prioritizes education, entertainment, and the viewer experience. By creating and sharing content on platforms like IGTV, Instagram Live, TikTok, and Instagram Reels, in 2021, brands will rely even more heavily on authentic video content to keep their influencer campaigns engaging.
3. Online Stores Expand to Brick-and-Mortar Locations – When it comes to selling online apparel, it only makes sense that retailers in this sector will continue to open physical stores. In fact, last year, real estate experts predicted that digitally native brands would open 850 brick-and-mortar stores in the next five years. Apparel isn’t the only sector reshaping the relationship customers have with physical stores. When it comes to groceries, many major retailers are now habitually offering services like same-day delivery and pickup, as well as keeping grocery stores open for shoppers who’d rather buy products the traditional way. In 2021, it’s clear that marketplaces like Facebook Marketplace and traditional retailers will continue to converge.
4. AR-Backed Shopping Experiences – Shopping experiences will continue to integrate augmented reality (AR), machine learning, and artificial intelligence (AI) into their processes. And as more and more people turn to online shopping during the pandemic, internet retailers are leveraging AR technology to bridge the gap between the digital and the physical. In fact, major brands like IKEA, Home Depot, and Target all offer proprietary AR shopping experiences now. And Shopify’s latest offering, Shopify AR, is reporting that interactions with products having AR content have a 94 percent higher conversion rate than products without AR. As shoppers continue to seek out AR experiences to guide their purchasing decisions and justify transaction fees, it is clear that this AR-focused trend is one to watch in 2021.
5. Brands Can Build Unique Identities on Amazon – When it comes to online marketplaces, Amazon remains the king. In fact, during Q2 2020, Amazon generated its highest net revenue yet — almost 88.91 billion U.S. dollars. And for brands that promote on Amazon, the company is offering tools like video in sponsored brands, a custom image for sponsored brands, A+ Content (also known as brand stories), Amazon Posts, a new product browsing and discovery experience, and Amazon OTT Advertising (over-the-top video advertising). In 2021, it is likely that Amazon will continue to support brands’ abilities to creatively advertise and differentiate their identities.
6. Brands Will Continue to Promote Their Ethics – According to 5W, 71 percent of consumers choose buying from brands that align with their values. Forrester also reports that shoppers are increasingly evaluating products and brands based on a company’s ethics and values, with 41% of US consumers actively seeking to buy from a company associated with social, environmental, and political ideals. In 2021, the strategy is obvious – build lasting customer loyalty and trust by being transparent about your business practices.
7. Same-Day Delivery – People are ordering online, but they still want to get their products quickly. In this age of instant gratification, shoppers want same-day, store-fulfilled orders from brands. In fact, PwC found that 88 percent of shoppers are willing to pay for same-day or faster delivery. As COVID-19 will continue to rage into 2021, expect more shoppers to want fast, convenient shipping.
8. Smart Speaker Shopping – 87.7 million adults in the U.S. own a smart speaker, with projections suggesting that by 2025, the global smart speaker market could grow to over 35.5 billion U.S. dollars. More tangibly, research has found that 20% of smart speaker owners use them to rder products, conduct product research, and track deliveries. Interestingly, voice assistants allow users to open the website where the answer was found. Therefore, this feature could translate into a boost in traffic for brands that prioritize voice-optimized SEO.
9. Chatbots – Thanks to COVID-19, retailers have had to significantly reduce face-to-face customer service. With chatbots, companies and users both enjoy shorter wait times and 24/7 availability. They can also be used for a variety of purposes, such as giving customers personalized gift recommendations based on their answers to a few questions. In 2021, expect even more companies to invest in adding chatbots to necessary digital channels.
10. Experiential Retailers – While brick-and-mortar stores are selling less, locations that are still open can strengthen customers’ relationship to brands. Known as “retailtainment,” immersive, Instagrammable, almost video game-like experiences can bring the brand alive in a way that surpasses digital means. When leveraged correctly, these physical locations can complement online counterparts and give the brand an edge against competitors.
Stefanini’s Solutions for Retailers
Technology is drastically transforming the retail landscape and shifting the focus from selling products to offering personalized experiences. Digital Retail requires an omni-channel approach focused on the customer experience. Our Digital Retail Services allow you to embrace disruption, transforming business models to keep up with our dynamic digital world.
From customer experience strategies to leveraging artificial intelligence to improve digital store experiences, we are here to guide you on your digital transformation journey. Are you ready to embrace the 2021 retail experience? Give us a call today!