Online spending rapidly increased during 2020 as a result of COVID-19 and the mix of national lockdowns, travel bans and high street closures.
From looking at 2020’s e-commerce performance, there are multiple trends that can be identified to help businesses continue to prosper through to 2022.
This article examines statistics covered in Shopify’s ‘Future of E-commerce Report 2021’ to gain an insight into how e-commerce businesses have fared during the coronavirus pandemic and what can be done to evolve further into the new year.
Record e-commerce growth and online competition
Due to COVID-19, consumers began to turn to online shopping like never before and, as a result, ten years’ worth of growth occurred in just 90 days. With the closures of high street stores, consumers had no choice but to go online, as it’s revealed that 84% of consumers did so during the pandemic.
Worldwide growth in online sales for 2020 reached a record high of 16.5%, whilst growth by region was as follows:
- North America – 18.1%
- Latin America – 19.4%
- Western Europe – 16.9%
- Central and Eastern Europe – 21.5%
- The Middle East and Africa – 19.8%
- Asia Pacific – 15.5%
With such rapid rates of online growth experienced in 2020, it’s forecast that 2021 will decelerate to around 7.8% growth as high street stores look to rebound from the damage inflicted by COVID-19. It’s thought that development within the Asia Pacific, Europe and the Middle East will be faster than the US during the next five years. E-commerce sales are also set to contribute a greater percentage to total global retail sales within the same period.
Rapidly rising online sales have also resulted in larger levels of competition between brands, with more consumers purchasing overseas to get the best deal. 2020 saw more generous levels of cross-border e-commerce, which increased by 21% year-on-year between January and June. Additionally, the increase in language translation apps rose by 3,309% during the pandemic, as well as a significant rise in currency conversion app downloads. This data suggests that consumers purchasing overseas goods is unlikely to slow down during 2021/22.
Changing consumer behaviour driving the future of e-commerce
COVID-19 created a change in consumer spending habits, with more significant numbers purchasing health, hygiene, home essentials, and food and beverage products. The new categories of purchases suggest demand for consumer convenience and immediacy.
As a result, brands must create a fast and convenient experience for their customers during 2022 to coincide with evolved expectations fashioned by the pandemic. A culture of video conferences, mobile payments and online shopping, have all have created a demand for fast, immediate results.
Some of the ways e-commerce businesses can adapt their online store to meet the expanding needs of their customers include:
- Connecting online checkout to the point of sale (POS) system to offer a range of low-cost fulfilment options, such as local delivery or local pick-up.
- Ensure your checkout experience is a fast as possible by enabling a one-click purchase option.
- Automate offers and promotions such as a discount for bulk purchases.
Customers expect fast and free shipping
In keeping with the changing priorities of consumers, 64% of global customers now expect free shipping, whilst 67% of US consumers expected delivery to be either same day or at least within two days. A particularly significant statistic is that 72% of global consumers also expect companies to use sustainable packaging.
The majority of consumers worldwide have stated that shipping costs directly impact whether or not they will buy from a brand, as it’s revealed that 5.3% of companies began offering free shipping during the pandemic.
The needs for efficient deliveries have seen more significant numbers of brands use a third-party logistics (3PL) provider to ensure that orders can be quickly picked, packed and shipped to their customers. Demand for 3PL providers is forecast to double within the next five years to around $408 billion.
Eco-friendliness has also become a significant priority for consumers with three-quarters of US consumers declaring that they would be more likely to purchase from a brand if a product was packaged sustainably. Many consumers stated that they would even pay a premium for shipping if they knew that the packaging was environmentally conscious. The countries where consumers most prioritised sustainable packaging was:
- China – 67%
- Australia – 52%
- Sweden – 46%
- US – 42%
In 2022, it’s recommended that brands ensure that their order fulfilment is maximised for efficiency as much as possible. Some of the ways this can be done include:
- Outsource order fulfilment to a 3PL provider to ensure fast shipments to customers
- Automate your inventory management to forecast demand
- Ensure your returns process is hassle-free
- Offer a range of delivery options including local delivery
If you want to help your e-commerce business grow in 2022, Pointbid is here to help. To discover the range of options available to your business, please give us a call on 0121 326 7368.