2020 was one of the toughest years ever. As the year ends, there is a lot that the world learned to cope with. From education to work, people learned to adapt to a life spent mostly indoors. A major sector that thrived as a result of this changed consumer behavior was online retail. As people were advised to not go out unless necessary, customers moved to online shopping for their needs. In the US alone, nearly 9% of the consumer base brought something online for the first time ever during the pandemic. Online retail grew in size and influence.
With 2021 right around the corner and vaccines being actively distributed to all major countries, we might see the impact of the pandemic fading. But as the world slowly limps back to the old way of life, will online retail still flourish? What will 2021 be like for online retail?
Let us explore a few trends that could grab the attention in 2021 for online retailers and some that will remain in the hearts of shoppers from their experiences in 2020.
Autonomous Deliveries may Finally Happen
From Amazon to Walmart, the world’s prime retailers are trying out newer innovative ways to deliver packages to shoppers who buy from them online. Drone and driverless delivery trucks may finally become mainstream for short deliveries in most countries. Everyone expected 2020 to be a launchpad for autonomous delivery but when the pandemic broke out, prioritizes changed for online retailers. As the huge gap in last-mile connectivity without physical contact gets realized, brands are likely to invest more in making this connection through robotic delivery and intelligent delivery mechanisms. Of course, as delivery logistics get more automated, more intelligence will likely have to be built into the systems that govern inventory, stocking, and product management. Smarter ways to identify (and differentiate) product variants and SKUs and information-rich and standardized product information content could play a key role too.
Virtual Demos and Trials are likely to stay
During the pandemic, physical store visits became rare due to social distancing norms. One of the biggest problems for customers of online retail was the unavailability of trials and demonstrations of products before they made a purchase decision. However, in 2021 this might finally change. More online realtors will invest in virtual and augmented reality infrastructure to set up digital experiences where customers can see AR/VR based imagery of the product they want to invest in. For example, clothes and accessories could be visualized with the help of AR/VR technology. This will bring in a more store-like experience of trying out products to the comfort of customer’s homes. Customers will also turn to product content to answer their questions and understand more about the products. Product content will have to be enriched to try and reduce any dissonance that creeps into the process over the course of the buyer journey.
Social Commerce Will take Center Stage
With more people glued to their social accounts to stay connected, be informed and keep their spirits high during the pandemic, it was only natural for brands to turn to social media. Innovative channels to explore more online retailing opportunities emerged and look set to continue being important. This is why some studies predict the social commerce market to be worth over $ 2 trillion between 2020 and 2024 with an annual growth rate of over 31%. While social media will serve predominantly as a medium to promote or advertise products sold by an online retailer, some brands could adopt an online-only retail mode through their social media accounts. Onboarding these new channels and the new customers and partner relationships that will come with that, could become a significant focus too.
Reverse Logistics will see Significant Digital Overhaul
Returns are an inevitable part of the online retail strategy. When the pandemic drove up online sales volumes, returns too picked up pace. More customers shopping online for the first time resulted in most shoppers buying items that were not compatible with their lifestyles. Requests for return of the product rose as a result. The journey back from the customer to the warehouse is not easy. This is where investments in reverse logistics are likely to become a crucial element. By 2025 it is predicted that the global reverse logistics market size will cross USD 603.9 Billion. At one level, retailers will focus their energy on providing the specific information customers need about the product across the buyer journey to enable the customers to make the right decision with confidence. Also, online retailers will have to go the extra mile to educate customers about their return policies. They will also have to upgrade the digital infrastructure to enable smooth return operations when required.
The pandemic saw the rising adoption of digital wallets and other touch-free payment options. This trend is likely to continue. More customers will want multiple payment options showcased to them when they shop online. They will want the ease of use, transparent views of what is happening to the purchase, and confidence in the end-to-end security of the process. Online retail brands will have to leverage customer analytics to define the most appropriate payment options for their target customer base out of a growing number of choices. In fact, knowing what the customer wants will be a recurring theme in defining digital customer experiences that will help drive the buyer journey forward.
It’s been said that the last few months created more acceptance of digital transformation than in the last decade. The online retail industry, which was already cashing in on benefits like location flexibility, thrived during the pandemic. As the new normalcy begins to get established, there will likely be an influx of new generation technology innovations for online retailers to adopt to stay relevant in a highly competitive space.