2020 was about responding. Many of us weren’t prepared for how COVID-19 changed the way we lived and worked. Some eCommerce brands were already ahead of the curve and could instantly capitalise on the almost-overnight migration to online shopping. Over 2 billion people purchased goods or services online in 2020, according to Statista. While some retailers were ready, others were forced to catch up and quickly respond to this massive change in buyer behaviour.
2021 saw us adapt. Digital shopping was the “new norm”. As retailers everywhere were getting on board, it became increasingly difficult to create a point of difference. And, as lockdowns and restrictions eased around the world, adapting to a mix of digital and physical shopping behaviours was suddenly more critical than ever.
The year ahead will focus on innovation. Emerging technologies are enabling brands to bring innovative experiences to their customers and stand out from the crowd. Online retailers have now been through the trial-and-error of what’s worked and what hasn’t. They can leverage that experience, partner with eCommerce innovators, and use iterative testing to drive the next generation of outstanding shopping experiences.
The evolution of consumer behaviours
How we live, shop, and prioritise our needs has seen astounding evolution in under two years. Consumer behaviours shifted rapidly but also reflected pre-existing trends. What was extraordinary, though, is the rate at which these changes accelerated. According to global research from McKinsey, consumer behaviours evolved in days, not years, during 2020. For example, the same increase in online deliveries over the last 10 years was seen in just 8 weeks.
What consumers are purchasing has shifted. Discretionary spending in many categories has been cut as shoppers prioritise around requirements like health, grocery, and home goods. Additionally, brand loyalty has seen a shake-up with many shoppers purchasing online for the first time in 2020 and 2021. Consumers are more willing to try new brands, and existing favoured brands must do more now to retain their customers.
The year ahead will be critical for retailers to re-think how they innovate and keep consumers engaged. Although the pandemic has permanently impacted consumer behaviours, brands can now use behavioural data to inform future commerce strategies. I believe trends for the year ahead, which strongly leverage these changes, include social commerce, live shopping, and omnichannel retail.
Statista reports that in 2021, there will be 3.78 billion social media users worldwide. That’s a 5 percent increase from 2020. Social commerce is tapping into this growth opportunity. Brands are leveraging exciting new ways to sell to customers via social channels and creating brand communities that drive connection, loyalty, and advocacy.
Social platforms are also equipping online retailers with the tools to sell more effectively. For example, Facebook offers a Facebook Commerce Manager, WhatsApp business integration, and Instagram shopping features that include Live Shopping to its 2.89 billion users.
TikTok is one of the youngest but fastest growing social platforms that will keep growing in 2022. The channel has over 1 billion users, surpassing Facebook as the most downloaded app globally during 2020 with over 850 million downloads. The platform is designed for people to express and engage with each other in short-form mobile video format and, as a result, tends to see high engagement with shoppers.
A trend that’s already taken off in Asia is Live streaming eCommerce (live shopping). In 2020, Alibaba Group’s Taobao Live produced US$61 billion in GMV. Throughout lockdowns, sellers were able to reach shoppers despite physical barriers, accelerating the popularity of this medium. Live shopping has quickly proven its worth. For example, China’s live commerce market grew at a compound annual growth rate (CAGR) of more than 280 percent between 2017 and 2020, with Chinese sales set to reach US$423 billion by 2022.
Video shopping isn’t new – it began over 40 years ago, pioneered by HSN (Home Shopping Network) in the US. In the digital economy, live shopping now brings social influencers into the mix as they interact with shoppers, engage audiences with prizes, and uncover new points of difference for brands. It is this real-time immersion that creates fresh, memorable experiences for consumers. I expect to see the trend grow even more rapidly in-and-outside Asia in the year to come.
The continued rise of omnichannel retail
It’s incredible to think that more than 30-40 percent of cosmetics in Asia are sold online. Forward-thinking brands across all industries are bolstering online presences and strategising how to support omnichannel operations and bridge the gap between physical and digital.
Consumers now expect to seamlessly engage and transact across physical and digital channels, including eCommerce sites, marketplaces, brick-and-mortar stores, and social media. Digital device usage now heavily influences in-store sales, and the in-store experience also affects digital sales. Sephora is one such global brand leading the omnichannel experience. Stores have become digital playgrounds full of devices that allow customers to virtually “try before you buy”. At the same time, the company’s mobile app serves up new products, video tutorials, news and trend information.
This omnichannel retail approach will continue evolving in 2022 as shoppers digitally find and research products available in physical stores. CB Insights cites that 75 percent of shoppers now use multiple channels to find discounts, compare prices, or use in-store tablets to browse products online. Stores are also becoming distribution points for online orders, enabling online to in-store returns and promoting BOPIS (buy now, pickup in-store) availability.
Omnichannel retail is a trend that’s meeting and exceeding shopper expectations in the “new normal” and helping deliver more engaging experiences at every touchpoint.
Innovation leading to transformation
In recent years, I’ve seen inspiring digital transformations across many industries and have felt privileged to help clients lead those transformations.
Leading brands are rapidly coming onboard with emerging technologies to capture additional market share, engage, and retain more customers. These technologies are making the most of the consumer behaviour shifts, which I believe are here for the long-term.
Online retailers have a unique opportunity in front of them. Those partnering with eCommerce innovators can bring forward a new generation of consumer experiences and be first in line for the rewards.
Author: Fatima Said, Co-Founder and Managing Director, eWave, a global services platform helping organisations create digital commerce experiences.
Disclaimer: The views and opinion expressed in the article belong solely to the original author and do not represent the views, opinions and position of Retail in Asia.