What will the future of e-commerce look like? Triggered by the ongoing pandemic, society went digital faster than we ever could have imagined. E-commerce boomed, and brick-and-mortar stores lost their most loyal customers. In this blog post, we dive into the stats that show how we shopped during the 2020 pandemic and what insights we can take with us for the future of online shopping from an industry perspective.
The pandemic has changed our buying behavior globally. E-commerce has skyrocketed because people around the world have stayed home. According to "The Future of Shopping Has Arrived Early" by Facebook IQ, two retail categories stand out: 1) essential items and 2) non-essential items. Early in the pandemic, consumers stockpiled out of worry, leading to a huge short-term surge that left shelves empty in many grocery stores. In the US, the food and beverage category grew by as much as 11.3% over the whole year. But the changes in behavior don't stop there. It’s crucial to understand these new habits and expectations to match them early in your business model, user experience, and marketing strategy – before competitors catch up. Below, we take a look at consumer buying behavior during the pandemic.
CHAPTER 1
Shopping Redefined: Rethinking priorities leads to complex buying decisions. In the past, consumer purchasing decisions were based on the selection available in physical stores. This has changed in recent years with the expansion of e-commerce and paid advertising in digital channels. In 2020, mobile e-commerce consumption grew by 19% globally, accounting for 65% of total e-commerce revenue worldwide. E-commerce has evolved and opened up more options for consumers. Price is considered a key factor online and in-store, with 61% saying they actively look for discounts or deals. As we know, many have been hit financially during the pandemic, so price is expected to remain a decisive factor. “One of the things that consumers have started to realize during COVID-19 is that their preferences of where they shop matter more to them than they did before. And that comes from a variety of reasons, not just safety and security, but also on their payment options, the inconveniences or conveniences they experience during their path to purchase and their buying transaction. These are all things that will persuade a customer to be loyal – or not.” – Nicole Leinback Reyhle, Founder of Retail Minded
So, what do the consumers say themselves?
71% say it is very important that they can shop safely in a physical store. 68% expect retailers to always have products they are interested in in stock. 75% say price determines where they shop. 68% say reliability is a key factor in where they shop. 65% consider availability and convenience important. 63% think good customer service is a deciding factor.
With these insights in mind, what do we as marketers need to think about in 2021?
Adapt your platforms to your target group's buying behavior.
Whether the consumer decides to shop in-store or online, both shopping experiences must feel safe, reliable, and easy.
The right message to the right audience.
Whether a consumer buys is personal, and it’s important to address them based on where they are in their purchasing journey. With today's advanced ad tools, we can optimize our ads for when the consumer is most receptive.
Values in focus.
Increased consumer awareness sets higher standards. Whether they shop in-store or online, your brand's values will be a key factor. Share them in your communication to build trust with potential customers. What position do you take in the market, and how do you stand out from the competition?
CHAPTER 2
Navigating Shopping Risks: Consumers face new friction points in-store and online
Past research has shown that hurdles or delays in a customer journey can cause a consumer to abandon a purchase. Poor customer service or long lines have also contributed. During the ongoing pandemic, there has been a shift: instead of just time and money, physical and psychological risks now affect the perceived cost of a purchase. Six risks have been identified in consumer buying behavior from different aspects.
Functional: Will this product or experience work the way I expect it to?
Physical: Is this product safe for me?
Social: What will others think of this product?
Psychological: Will this product or experience cause negative emotions?
Financial: Can I afford to buy this product or service?
Time: How much time will I have to spend to buy this product?
What risks did consumers say they experienced when shopping in-store during the pandemic?
Time risk.
38% felt they spent a long time in line and that it was hard to find what they needed.
Functional risk.
37% found that products were out of stock or wanted to try the product before buying.Financial risk.
35% experienced high prices and few discount periods.
Physical risks.
25% did not feel safe in crowds.
Social risk.
17% waited because they wanted to make a discreet purchase.
Psychological risk.
9% felt stressed or annoyed while shopping.
Months after the pandemic started, 71% of consumers say that safety is a high priority for shopping in-store versus online. This will likely continue to influence buying decisions. With these insights, what do we as marketers need to think about in 2021?
Better services to reduce risk in physical stores.
Not having to walk around the grocery store, being able to pick up pre-packed goods, or having them delivered home has made consumers feel safer. If your business offers these services, or has smart user experiences for safer online shopping, talk about it and get ahead of the competition!
Optimize your digital platforms.
Consumers are turning to e-commerce and mobile shopping more than ever, so make sure your digital platforms are optimized for mobile. Ask yourself – what basic features would make you prefer shopping online over a physical store?
Flexible payment methods, fast shipping, and easy returns.
You need to win the trust of new customers. By offering smoother online payments, fast shipping, and easy returns, you create a great customer experience that will likely keep them coming back.
CHAPTER 3
Role Reversal: In-store becomes transactional, while online becomes experiential
The pandemic accelerated the digitalization of society, causing e-commerce to explode in 2020 as fewer people visited physical stores. This is likely not a temporary shift but the new normal – 32% say they will spend less time in physical stores even after the pandemic is over. This is the next generation of e-commerce. Consumers want more convenient shopping and expect to easily find products that fit their lifestyle.
What do consumers say about impulse buys versus planned purchases globally?
Food/Beverage: 68% plan what they buy, while 32% make impulse purchases.
Household items: 68% plan what they buy, while 32% make impulse purchases.
Furniture: 66% plan what they buy, while 34% make impulse purchases.
Electronics: 67% plan what they buy, while 33% make impulse purchases.
Beauty: 64% plan what they buy, while 36% make impulse purchases.
Personal items: 65% plan what they buy, while 35% make impulse purchases.
Clothing: 58% plan what they buy, while 42% make impulse purchases.
And how do consumers want to discover brands and products in the future?
38% say they want to be able to browse products by current trends.37% say they want to browse products by different lifestyles.
36% say they want short quizzes that tailor product recommendations to their unique needs.
35% say they want to take a photo of a product and get search results for that product or similar items.
34% say they want dynamic lists based on past purchases and needs.
33% say they want product suggestions based on what is trending among friends or their network.
29% say they want product suggestions that help them reach specific goals. (For example: decorating a nursery or running gear for a marathon)
29% say they want their smart home devices (like Alexa or Google Home) to suggest useful products.
24% say they want to discover products through live streams of influencers using and reviewing them.
23% say they want more brands to host live streams with company reps recommending the right products.
With these insights, what do we as marketers need to think about in 2021?
Streamline your physical store.
Consumers are getting used to time-efficient shopping. They expect physical stores to make purchasing easier with simple store navigation and faster checkout options. Are you leading the way in these areas? If so, make sure to highlight your physical USPs!
Try new ways to reach your audience.
Live shopping was a rising trend during the pandemic and is a highly effective way to engage with customers when you can't meet them in person.
Try Discovery Commerce
Discovery commerce is a system on Facebook that lets you gather data on your audience's shopping interests. This makes it easier to see what they interact with, helping them explore your range and find the right products based on their interests.
Personal customer service.
Consumers want to feel secure when shopping online. By offering active customer service on social media, where your business can quickly answer questions and give advice, you can build unique trust—something that usually happens naturally in physical stores.
CHAPTER 4
Across the street and around the world: Shopping carts are becoming "glocal" Consumption and buying behavior took on a new meaning during the pandemic, creating a stronger bond between local and global businesses. The pandemic has encouraged consumers to shop more locally to support small businesses that have had a tough time under the current circumstances.
So, what have consumers done to support their local businesses? 33% – made a purchase from a local / small business.
32% – recommended a local / small business to family or friends.
30% – followed or liked a local/small business page on social media.
23% – wrote a positive comment or review on a local/small business's social media page.
20% – recommended a local/small business to a corporate group.
20% – shared or reposted an offer or content from a small/local business on social media.
So, with these insights on local engagement, what do we as marketers need to think about in 2021?
Support local businesses.
We don't know how long the pandemic will last, and since many people are spending more time at home and avoiding physical stores, local small businesses are struggling to survive. We must support them by engaging in any way we can, and social media is a key tool to spread the word. Can your business take a stronger market position by collaborating with small businesses that share good synergies with yours?
Digital presence for small businesses.
Whether you run a large or small business, the pandemic has accelerated digital growth. To survive as a small business, you need to be active on social media. There are huge opportunities there that are well worth taking! Review your media budget and its actual ROI. For example, if you used to advertise in the local paper, consider moving that money to geo-targeted ads instead, or why not launch an online shop via Facebook Shops and invest in high-quality photos of your products.
CHAPTER 5
The New Loyalty Equation: How empathy, transparency, and value spell loyalty. Changes in consumer buying behavior have taken root during the pandemic. Over 60% say they have changed their behavior by trying new brands. This has shaken up and reduced the loyalty consumers had to stores before the pandemic. Purchases have become more complex, and prices and deals are what drive customers, as personal relationships are harder to build online.
What makes consumers repeat purchases on an e-commerce platform?
Price: 49%
Quality products: 39%
Easy to find products: 37%
Reliable website: 37%
Wide selection of products: 34%
Flexible delivery options / policy: 34%
Secure payment methods: 29% With these insights, what do we as marketers need to think about in 2021?
Review your customer retention strategy
With so many options when it comes to deals and prices, retail is highly competitive. Review the points above to see how your brand can communicate with consumers to build loyalty within your target group.
Communicate with your customers.
In many cases, consumers choose brands where they feel a sense of connection. Communicating with your customers is key to building loyalty and relationships. Share important updates and start conversations where they can give feedback or ask questions. 87% say they are interested in interacting with brands and e-retailers in some way.
Summary
The digital shift that happened during the pandemic would likely have occurred anyway, but Covid-19 certainly speeded it up. We don't yet know what society will look like when things settle down. But we must stay updated and ready for change. Traditional businesses that haven't adapted or been open to change won't have what it takes to survive in the long run. The shift happening now is the new normal. In this new normal, we must act and seize the amazing opportunities the digital landscape offers us!
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This blog post is a summary of: ”The future of shopping”.