With the rise of the covid-19 pandemic, the digital world has been fast-forwarded. The e-commerce industry has new priorities and consumers have more expectations. Around 150 million new shoppers came online and this surge in demand also means new competition.
Talks of vaccines and an end to the pandemic hopefully coming soon, many have been left with one question. What will e-commerce look like in a post-pandemic world? We did some research and found a few trends that we think will have a big impact on the future of e-commerce and how people buy online.
The brands who can capitalize on the expectations of today’s online shoppers, who are looking for easy-to-use and intuitive experiences across channels and devices, will probably be the ones that will see the highest return.
Direct-to-consumer brands who are digitally native already have compelling e-commerce experiences and are able to build further onto their existing expertise while newcomers to the space such as legacy wholesalers and global retailers will have to change their whole business model just to keep up.
New competitors entering the market cause customer acquisition costs to rise. Brands are investing in richer and more personalized experiences. Humanizing its brand helps increase customer retention and creates a feeling of community.
A seamless customer experience is not limited to having a responsive webshop design and lowering the loading time of your webpages. It is about the complete customer journey from the first touchpoint between the potential buyer and your brand up until them interacting with your customer support team after becoming a paying customer.
There is a reason why the average shopping cart abandonment rate for online retailers varies between 60% and 80%. Customers are not impressed with the buyer’s experience and lose interest. Products such as Apple Pay and Fast who are building one-click checkout systems that remove friction from online shopping and reduce the number of abandoned carts are trying to solve this problem.
Another example is the unboxing phenomenon on video platforms that caused a lot of brands to look for custom packaging solutions to set themselves apart from competitors. They improved their customer experience and incentivized people to share their product unboxing on social media.
Social commerce is the process of buying and selling products directly on social media. A few platforms currently supporting or testing social commerce are TikTok, Instagram, Facebook, and WeChat.
In the end, every action a potential customer has to take to complete a purchase is another opportunity for them to change their mind. Someone could be scrolling through their feed on a social platform and spot a colourful hoodie they really like, click “buy”, and once the purchase is completed continue to enjoy catching up with what their friends have been doing over the weekend.
Another benefit of social commerce is the first word, it’s social! Customers can easily share their last purchase with friends and get their thoughts on it. Social commerce can be the next best thing for those that miss the social aspect of shopping at the mall while we are stuck at home during the pandemic.
In addition to consulting friends about the last purchase, customers can also reach out directly to the people behind the brand through the comments or by sliding in the DM’s. This offers an incredible opportunity for the shop owners to collect feedback. On social media channels, you know exactly who your customers are which gives you the ability to personalize the customer service.
To finish it off, these social channels have an incredible amount of data available that you can use to get your products in front of people who love them in a way that would not be possible through traditional e-commerce and marketing.
Augmented reality takes physical products and brings them to the digital world where customers can interact with them and try them out without leaving the comfort of their home.
Popular examples of augmented reality that have seen mainstream adoption are Snapchat filters and Pokémon Go but this can be extended to the shopping experience as well. A company selling couches can let its customers try out the specific couch they want to buy in their living room. If creating AR experiences for your webshops seems like overkill you can start by adding 3D models to the product images and catalogues.
Helping customers better understand the size, scale and details of your product increases conversion. Especially for larger items, store owners need to reduce product returns because they can destroy profits margins.
While live stream commerce is still new in the west, this trend has been growing rapidly in the east (more specifically China) and is showing no sign of slowing down. The pandemic is accelerating this trend to the US. Sellers are looking for new ways to get their product to customers because their physical stores are closed, buyers are more open-minded on new ways to shop, and influencers are looking for new ways to monetize. We are going to a future where we stream, shop, and socialize all in real-time on our mobile phones.
‘We all shop for different reasons. We shop out of necessity and utility, of course. But for some of us, shopping also evokes joy, comfort, validation, even stress relief. And increasingly, I believe we’ll shop as a form of entertainment.’- Connie Chan (General Partner at a16z)
Entertainment, commerce, and content are coming together and becoming shopatainment. This is when sellers decide to leverage live video over photos to sell products and where buyers browse sellers live streams looking for entertainment.
Early examples of live stream shopping have been low-cost set-ups but these will be replaced with high-quality production sets over time. Brands will invite new kinds of influencers to collaborate with them on stream, announce new product releases, and create special events, all while people are buying and watching on the same screen.
The importance of establishing authenticity as a brand and creating a connection with the customer is more important than ever before, especially among Gen Z. On top of that, the sense of community increases conversion. It’s the same psychology behind going into the store with the most people in it. Having the feeling that you are not the only person buying the product validates the purchase.
Having seen extreme growth in the U.S. e-commerce penetration during the pandemic we are headed for exciting times. Coming out of this pandemic we will not only see a few big winners but the whole e-commerce industry will see significant growth going into the future.
Interested in how you can ride these trends with your e-commerce store? Make sure to check out what we are working on at tryemcee.com.