The ecommerce trends that will help retail businesses to thrive in 2021

January 5, 2021

The ecommerce industry has been one of our economy’s few success stories during the COVID-19 pandemic. According to IBM’s U.S. Retail Index, the unprecedented events of this year have brought digital shopping to a level that it was not expected to reach until 2025. That’s a huge acceleration in the shift from brick-and-mortar stores.

Ecommerce grew by around 20% in 2020, putting it ahead of any other retail industry. Such is the enormity of the pandemic’s impact that only grocery shopping, pharmacy, liquor and building materials enjoyed any growth at all. All other retail industries suffered great setbacks as society redefined what it considers “essential”. Department stores, down 60%, and men’s clothing, down 68%, lost the most ground.

But while digital transformation has been essential this year for most retail businesses, it has inevitably led to greater competition in the online space. Getting up-and-running online may have allowed small businesses to survive, but only through innovation can they really prosper. Now that these businesses have caught up, they need to be looking at how to stay ahead of the curve. And the businesses leading the way are the ones who have latched onto some of the fascinating trends in technology that will really take hold in 2021.

Like in other aspects of life, we have to try and look at the positives brought about by the pandemic. Many retail businesses are, of course, mourning the great disruption that the virus caused and are still ill-equipped to meet shoppers’ new demands. But a competitive new environment has also forged opportunities that are there for the taking. If businesses have the will and determination to innovate in 2021, they will be able to snap up pieces of the market that previously would not have been attainable.

Customer experience will be key in 2021

Nothing is more important to a retail business than customer experience. In a world where just about anybody can whip up an ecommerce site and begin selling in a matter of hours, simply taking products to market isn’t good enough anymore. With so many options available to the consumer, retaining customers has become more important than ever.

As Shopify wrote in its latest report, The Future of Ecommerce, “today’s consumer expects easy-to-use, intuitive digital experiences across channels and devices. Brands that can deliver on those expectations are seeing the greatest returns.”

Amazon has really set the standard, offering a one-click checkout and same-day delivery in some regions. Footwear goliath Zappos has also focused heavily on customer service in recent years, and has claimed to have had customer calls lasting over 10 hours.

But what can smaller businesses do to keep up with the giants?

Retail businesses first need to have the basics in check. They need to audit their niche and really understand their target customer. Then they need to set their website up to sell effectively. On top of that, they should invest in branding to ensure that they have a compelling story to tell and are speaking their customers’ language.

But to reach the next level, retailers should look at specific technology which became more widely adopted in 2020 that helps to tackle three major areas of customer experience: service, convenience and personalization. By focusing on these areas, ecommerce businesses will ensure that their customers keep coming back throughout 2021.

omnichannel erp

Omnichannel retail in ecommerce (ERP)

Retailers now need to embrace the fact that they are discoverable on multiple channels. In 2021, they will need to present wherever their customers are, whether that be on social media, Google, online marketplaces or in the street.

This omnichannel approach does more than just help store owners not to lose opportunities for new business. It also gives them the flexibility to rapidly shift efforts and resources from offline to online, and back again, based on customer demand. This gives online stores a certain amount of protection and confidence as we drift somewhat further into the unknown.

The key to omnichannel retail is, again, technology. There has to be a solid technological foundation to your store, a single ‘source of truth’ which can then be delivered to your customers on multiple platforms.

It starts with data. Businesses need omnichannel Enterprise Resource Planning (ERP) which unifies their customer and product data. This allows businesses to manage all of their platforms in one place, ensuring accurate stock counts and effective logging of customer activity. We already discussed the power of personalization above, but to do this properly businesses need to be able to access customer data quickly across all channels. For example, if your customer buys directly from your store, from social media and in a brick-and-mortar location on three separate occasions, this data needs to be synchronized in order to remarket to the customer most effectively to attract them to do business with you again.

Businesses can use a POS (point of sale) system, for example, to connect their digital storefront with retail locations in a central reporting hub.

The truth is that retail businesses without a single source of truth for sales data and reporting are unable to efficiently track performance across channels. And this results in a huge loss of opportunity. With increased competition driving up customer acquisition costs, retention will become even more important in 2021. And that’s where omnichannel ERP is going to be essential.

Remember, too, that less data entry also frees up your team to devote more time to creating a unique customer experience.

Image and voice search in ecommerce will grow in 2021

The way that shoppers find products has already been changing over the past few years. Voice assistant devices and apps like Alexa, Google Assistant, Apple’s Siri, Samsung’s Bixby, and Microsoft’s Cortana are becoming part of the household. And according to Think With Google, 72% of voice assistant owners use these tools daily.

According to the U.S. analytics firm Comscore, 50% of internet searches will be done by voice by the beginning of 2021. Not only that, but research shows that people who search by voice are more likely to act on the results.

Ecommerce business owners can capitalize on this trend by creating content that more directly answers questions posed by the speaker. This usually means focusing more on long-tail keywords, such as “where can I buy a blue bomber jacket in the UK?” instead of “bomber jackets uk”. Because voice queries are more conversational in style, basing your content on questions is a good strategy.

Another huge opportunity, especially for fashion retailers, is to implement a reverse image search. This allows customers to find your product using a photograph of the product. Solutions like Slyce, Visenze, and Cortexica allow merchants to add a visual search to their ecommerce website. Although text keywords are likely to be more common for a long time to come, image search functionality might help to increase traffic to your store, particularly in industries that rely heavily on visuals.


A.I. and machine learning for ecommerce personalization

Creating a more personalized shopping experience is a no-brainer if you want to increase revenue and keep your customers coming back.

The products that you recommend to customers should cater to their tastes, even before they know what they want. This is where artificial intelligence (A.I.) comes into play, with the power to offer a tailored and authentic experience. A.I. and machine learning also gives you the option to provide dynamic pricing, personalized discounts and incentives.

For an ecommerce business, the first step in utilizing this technology is to collect high-quality data. Any machine learning algorithm needs data to be supplied in order to generate results. If your database accurately records which type of people are interested in which products, then the algorithm can start to learn what is most relevant to various demographics. Remember to go beyond purchase data. Clicks, search queries and abandoned carts can all contribute to your understanding of each customer. This might require you to break traditional data silos that you currently have in place.

Implementing this properly can be a real game changer. Not only can you encourage customers to buy more on each visit via upsells, but you can also re-market more effectively to your customers. 

There are many AI and machine learning tools for ecommerce businesses currently on the market. Choice AI helps you to create personalized ecommerce landing pages and smart banners in real time. Tools like Granify and Namogoo analyze shopper behaviour in such a way that you can offer personalized pricing and incentives. This is a great way to retain customers and optimize the revenue you’re getting from your store.

Augmented reality and virtual reality in ecommerce

One of the best ways to recreate the brick-and-mortar shopping experience is to use augmented reality (AR) or virtual reality (VR).

Depending on which technology you use, you can create either a virtual showroom or allow shoppers to see the product in whichever environment they’re in. An example of this would be to show a 3D impression of a bicycle in a customer’s phone camera shot while they’re standing in their garage. The idea is to give the customer the feeling of having the product there with them makes them, so that they’re more likely to buy. 

Another example would be to allow your customer to see what it would look like to have your furniture in their apartment. This gives them an idea for the size of the product and might make them more confident about buying. 

It’s the next best thing to “try before you buy”. In fact, beauty retailer Sephora is using this technology to allow customers to “try on” make-up using their phone camera. This is how they can be sure that the colour or style will suit them. And studies have confirmed that offering an immersive experience like this boosts sales.

AR and VR technology has not been adopted by many ecommerce businesses yet, which presents a great opportunity for retailers to stand out from the crowd. Shopify AR are Sherpa AR are tools you can use to get started with this technology.

augmented reality

Will social media checkout catch on in 2021?

Since the pandemic developed at the beginning of last year, social media platforms like Facebook and Instagram have tried bringing the checkout closer to consumers’ social media experiences. Updates have allowed stores to skip a step in the sales process by allowing customers to buy directly from their social pages.

This could make influencer marketing increasingly important. It could also blur the lines between entertainment and shopping, with some businesses poised to use live streams to demonstrate value instantly to customers.

eMarketer has forecast that China will generate around $315bn next year in social media ecommerce sales.

That said, a Bizrate Insights survey from June last year concluded that only 18.7% of US social buyers said they paid for their most recent social purchase directly through a social app’s checkout process. The majority of respondents (57.8%) said they completed transactions on a retailer’s website.

There’s absolutely no doubt that social media will remain crucial in 2021 for product discovery and customer engagement. But the jury is still out as to whether the world is ready to adopt social checkout, particularly at the bottom of the funnel.

Businesses will be experimenting with this in 2021, alongside other types of frictionless checkout.

Change will keep coming

So, as we enter 2021 the ecommerce landscape is looking how we expected it to look in 2025.

And if the more nostalgic business owners are hoping or expecting things to go ‘back to normal’ this year, they will almost certainly be left in the cold.

Running a retail business was challenging even before the onset of the pandemic. And now, with increasing competition in the space, businesses will have to embrace new technology if they want to survive.

The year 2020 is now behind us, and store owners can feel proud if they were just able to begin their digital transformation last year. The champions of 2021 will be the ones who innovate to seize the many opportunities that have been left in the pandemic’s wake.


© Grindstone, 2021.  All rights reserved.

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