The year 2020 has been like living in a time-capsule. It has massively accelerated many technological trends. We have seen a decade worth of e-commerce growth in a single year. While many industries struggled to cope with unprecedented disruption, e-commerce was an exception to that rule. The possibilities for e-commerce opened up in many geographies and it grew by leaps and bounds.
With most consumers working from home and an emphasis on social distancing, shopping patterns underwent a significant shift. As per the BCG Consumer Sentiment survey, e-commerce is expected to reach a staggering five trillion dollars in 2021. In an era of Digital Darwinism, many brands must adapt themselves to the changing e-commerce landscape and take steps to acquire a competitive edge.
Based on insights from Forbes, let’s take a look at the key trends that are shaping e-commerce in 2021 and beyond.
New consumer segments
The age-old habit of physically visiting stores for certain goods and only using e-commerce for others is changing. Today, consumers who were averse to purchase certain products from e-commerce stores like groceries, essentials, and pharmaceutical products are changing their behaviour patterns. Even older demographics who have been apprehensive of making e-commerce purchases are now making it their go-to shopping option. In the case of the latter, there is little choice as they are more susceptible to the pandemic and most brick-and-mortar stores are working at full capacity. The longer the pandemic goes on, the more likely it is that the e-commerce shopping habits will remain. Many brands have made a shift to a hyperlocal business model in an attempt to stay ahead of their competitors in the e-commerce world.
As per McKinsey, it is likely that some behaviour patterns have changed permanently, for example, a 30 percent decline in grocery transactions was observed in China and there was an increase of 69 percent in the average value per transaction. In the US, many are shifting to e-commerce due to availability and hygiene considerations.
Increased digital competition
With the e-commerce market expanding, the competition too has increased significantly. Marketers and companies that are able to set themselves apart and innovate with advertise content have an edge in the attention economy. Content in the digital space espouses greater significance due to the emphasis on e-commerce and companies are making more investments in digital content. While this trend was already existing prior to the pandemic, it has become all the more prevalent in recent times. Companies who made the jump early have been able to unlock higher and higher rewards in the digital space. The retailers who were not able to adopt to an e-commerce business model found themselves left behind. The e-commerce world is brutal as it is either adapt or perish. Especially since consumers today take a mere 3 seconds to decide if an advertisement or idea interests them or not. Organizations in the digital space are clamouring for attention. In 2021, the e-commerce arms race only gets more intense as companies will have to find innovative new ways to set themselves apart with digital content.
There are many consumers today who have an heightened awareness about environmental sustainability, in light of current events. Which has led to them having a preference for eco-friendly e-commerce products that have much of an environmental footprint than their in-store counterparts. E-commerce initiatives that are sustainable will be preferred by many consumers in the long-run. Today, consumers are purchasing with more purpose than ever before.
The road ahead
The confluence of various trends is driving the boom in e-commerce today. However, we are still a long way from the golden age of e-commerce. While the pandemic may well cease to exist in the future, the psychological impact shall remain. This also applies to e-commerce that finds itself on the cusp of an incredible opportunity. Businesses that are innovative shall find a significant uptake with e-commerce. They have the opportunity of being the dominant players in the e-commerce space. At the same time with e-commerce led super-consumption, an emphasis on sustainability and lowering the environmental footprint is imperative in light of current events.