When 2020 delivered multiple rounds of knockout blows, the retail industry took one of its hardest hits. A huge number of retailers went from a sure business model with brick and mortar stores, to temporarily (or sometimes permanently) having to close their doors and look on helplessly while their inventory was coated with dust.
While the world of retail was turned on its head, consumers simply adopted new digital behaviors from the comfort of their homes and moved on to fulfilling their various shopping desires online. So, with Miss Rona here to stay for the foreseeable future, what trends and behaviors do responsive retailers need to look out for this coming year?
The success of e-commerce in 2020 came as no surprise. With billions of people staying home to prevent the spread of the coronavirus, digital channels became the best alternative for consumers to get their shopping done. From exercise gear to home decor to hiking equipment, the easily accessible online shopping world coupled with the extra time we had on our hands made it easy for us to entertain necessary as well as impulse purchases.
To keep up with new demand, thousands of retailers shifted to selling online via Amazon, Shopify, Etsy, and other online platforms. Take Uncle Bobbie’s, for example. Once a bookshop with an exclusively physical presence, the coronavirus saw the store move its sales to an online platform that now averages sales of $250,000 a day.
The monumental shift that the retail landscape has experienced makes for eye-watering statistics: in 2021, it is expected that over 2.14 billion people worldwide will buy goods and services online. To put the number into perspective, that’s a whopping 27.8% of the world population making purchases online.
What's more, as offline sales continue to dip due to localized lockdowns and buying behaviors change for good, e-commerce will continue to exponentially grow. Retail e-commerce sales will reach $4.9 trillion USD in 2021, accounting for 18.1% of retail sales worldwide. Needless to say, retailers who embraced the shift to selling online are just beginning to reap the rewards of digitizing their presence.
With over 1.3 million people joining social media every day during 2020, it is only natural that social commerce is experiencing a huge boom. At the swipe of a finger, platforms like Facebook and Instagram are making it easy for users to safely purchase online, and for retailers to explore new revenue streams.
With almost 4 billion combined users, Facebook and Instagram are providing businesses with a new platform to market their products to the masses, increasing their chances at making a sale. Given that consumers’ attention spans are ever-dwindling, selling on social media allows businesses to consistently stay in the consideration stage of the buyers’ journey. Shoppable posts and native shopping leverage Instagrams’ visually appealing content to give brands the chance to convert passive users into paying customers.
Facebook and Instagram have made setting up these social commerce platforms incredibly simple. In fact, it’s possible that some small businesses will bypass the need for a Shopify storefront altogether, focusing all their efforts on the appearance and advertising behind their social profiles instead.
But the e-commerce giants are shifting to work with the social commerce boom, too. Take Shopify: it is offering its Shop Pay platform as a secure and reputable payment option for sales on Facebook and Instagram, further facilitating the easy shopping experience for customers, and closing the gap to selling on social media for vendors.
Despite the e-commerce boom, local commerce has become a trend in its own right. In the midst of enforced lockdowns and curfews, local communities are coming together and consumers are making a shift to #BuyLocal. In an effort to help their neighborhood shops stay afloat, people are seeking out small, local businesses to support, and in turn strengthening their communities and economies.
This is also powered by consumers' growing inclination towards sustainable and ethical consumerism. Now more than ever, people are paying close attention to where their products are from and how they are sourced. Making changes to where retailers manufacture or purchase their products is no easy feat and can be a lengthy process, but if it is possible to find opportunities to be greener within a business, they should be explored. After all, in this day and age, consumers are favoring products and businesses that make the effort to produce locally, sustainably, and ethically.
With nowhere to shop but online, people took to retail therapy like never before. Consumers, like myself, had no qualms about placing large orders from the warmth of bed at 2 am, and expecting them to arrive the next morning. The ease and instant gratification of this new hobby was exhilarating and easy for your average shopper but became a trying, logistical nightmare for supply chains.
With the new level of consumer demand that began in March 2020, many companies experienced an overnight shift in operational logistics - fulfillment centers were at max capacity, shipping carriers were overloaded with orders, inventory shipments were delayed… and some firms even had to close their factories. To help support their strained supply chains, some retailers made moves to keep inventory closer to high-demand areas or even manufacture closer to home. Others began to diversify their shipping methods and streamlined their fulfillment processes to get orders out the door faster. The key? Flexibility, adaptability, and building solid contingency plans for when sh*t hits the fan.
2020 was a learning curve for everyone. In 2021, retailers need to take those learnings and look for new ways to adapt their businesses for when unprecedented events occur.
How? One way for businesses to efficiently manage their supply chain, their e-commerce sales, their fulfillment, and have more time to dedicate to their social media operations is with the use of technology. There are loads of applications out there made to make retailers' lives easier and ParagonSMB is one of them.
ParagonERP effortlessly handles all of your inventory and order management needs across e-commerce platforms like Amazon and Shopify. It integrates with your supply chain to provide you with improved efficiency and clarity, whilst giving you the extra time you need to build your brand and business on social media and stay ahead of the game in 2021. That way, this could be you: