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The future of ecommerce: Six key trends for business growth in 2021

At Linnworks we’ve seen many ecommerce businesses experience unprecedented growth in 2020, but also many business challenges with demand for certain categories offset by supply chain… View Article


The future of ecommerce: Six key trends for business growth in 2021

At Linnworks we’ve seen many ecommerce businesses experience unprecedented growth in 2020, but also many business challenges with demand for certain categories offset by supply chain and shipping challenges. The resulting changes in consumer behaviour and purchasing decisions are likely to become permanent with many customer journeys continuing to take place online, even when physical retail scales back up to operate at pre-pandemic levels.

To build on this momentum around ecommerce in 2020, businesses need to adapt strategies around key areas of their business to remain competitive in 2021. At Linnworks, we’ve identified 6 key ecommerce trends emerging from 2020’s disruption and key to continuing successful business growth in 2021:

  • The growth of total commerce
  • Customer experience is key to growth
  • Personalizing the entire shopping experience with data
  • The rise of direct-to-consumer (D2C) selling
  • Shopping as part of everyday media consumption
  • Diversification of supply chains

Trend 1: The growth of total commerce

Shopping never starts or stops with total commerce. It’s always happening. According to Think with Google, 84% of Americans are shopping for something at any given time in up to six different categories. This always-on mindset means consumers are always open to marketing. A Facebook ad in someone’s news feed is the modern-day, digital equivalent of a trip to the mall. Not only are consumers used to marketing at any time, but they’re also open to shopping at any time throughout the day.

To capitalize on the total commerce approach, brands need to reach consumers wherever they shop. Brands with a strong ecosystem of shopping channels and experiences for customers will win customer attention and purchases at the end of the day.

Trend 2: Customer experience is key to growth

Going into 2021, the customer experience isn’t as easy as delivering a good product. The customer experience is end-to-end, from a frictionless product search to a seamless purchase journey and convenient delivery and returns policy. Every point of interaction a consumer has with a retailer has to be frictionless. To simplify the buying experience, be sure to offer “buy now, pay later” deals. Focus on building trust by spelling out your delivery or shipping policies upfront.

In fact, 76% of online shoppers cite fast shipping speeds  as a top characteristic of a great shopping experience. The easier you make the process, the more likely you’ll be to retain the customer.

Trend 3: Personalizing the entire shopping experience with data

Offering a personalized shopping experience is another way to boost customer loyalty. The good news is that ecommerce businesses have a wealth of data at their fingertips. Analytics tools and ecommerce software can help retailers learn more about their customers and cater to the shopping experience to them.

Some examples of the type of data that can be used to personalize the customer experience include how people arrive at your site, the demographic profile of your customer, shopping and purchase preferences and frequency, payment and shipping preferences and interaction with your marketing activity.  This data can be used to personalize the shopping experience right through from offsite ads to the product selection and purchase journey onsite, increasing the chances your customers will quickly find what they want and move through the sale. Customer data can also be used to drive customer retention strategies like loyalty programs and product bundling and subscriptions.

Trend 4: The rise of direct-to-consumer (D2C) selling

Another trend that will continue to grow at an accelerated rate in 2021 is brands moving towards a direct-to-consumer (D2C) model as a result of a drop in foot traffic at brick-and-mortar stores. Due to the uncertainty of what shopping malls and retail stores will look like in the future, many brands have adapted their selling strategies to reach their customers directly. With the rise of third-party fulfillment centers to do the heavy lifting, the barriers to selling direct has dropped and many brands have seen the advantages of having a direct relationship with their customer.

Going directly to the consumer offers two major benefits. The first is better profit margins. You’re bypassing traditional retail networks when selling directly to the customer, which means a higher margin per sale. The other benefit is access to more data. As mentioned above, customer information lets you personalize the experience to increase sales and speak directly to your customers’ needs.

Trend 5: Shopping as part of everyday media consumption

Traditionally, customers would buy products by finding a business through a Google search, viewing ads either online or in-person, or going directly to the retailer’s website. However, new channels have emerged that integrate shopping into digital content where leisure time is spent. We’ll see this trend of shopping as a part of everyday media consumption continue to grow in the upcoming year.

For example, more people are turning to social media for shopping – Instagram is a huge leader in the social commerce space and indicates that 81% of consumers search for products on Instagram. Much of this growth can be attributed to the rise of influencers.  As many as 130 million Instagram accounts tap on one of these shopping-enabled posts each month to learn more about products.

To win the customer experience on these channels, placing your product or brand as seamlessly as possible into people’s everyday lives through shopping tools and the platforms where your customers are at is key. Facebook have coined this ‘discovery commerce’ where the product finds the consumer.

Trend 6: Diversification of supply chains

The events of 2020 wreaked havoc on supply chains and the ability of sellers to receive inventory and fulfill orders. Limitations on global trade put real strains on retailers. Unfortunately, ecommerce businesses may have to continue navigating the effects of both COVID-19 and Brexit, which are still causing uncertainty in certain regions across the world.

Diversifying your supply chain is critical to providing customers with consistent, timely orders. Work with a combination of local and international suppliers to source products. Apply the same diversification methods to fulfillment and shipping centers. For example, using UPS for half of your domestic orders, Amazon’s European HQ for a quarter, and your own in-house distribution team for the rest.

Keep in mind, if you can’t fulfill the order, then someone else will. A constant, reliable supply chain will maintain your inventory, your customer’s loyalty, and your market share.

The conditions presented to retailers in 2020 were both unpredictable, but have provided ecommerce businesses with both significant opportunities and major challenges.

A deeper dive full report: HERE

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