COVID-19 pandemic marked the end of 2019 and the entire year of 2020 economically, socially and at the level of individual lives alike. One of the most significant effects of the recent period is the significant increase in the importance of online space in people’s lives. This is also true for retail, where e-commerce has gained enormous ground due to the forced closure of brick-and-mortar stores and the need for distance and contactless shopping in general. In line with this, companies providing parcel services are also the winners of this period, as their sales volume increased exponentially by 43% in Hungary in 2020. Based on all this, what can we expect in retail in 2021? In this article we will present global trends that are expected to determine 2021 and the next few years in online and offline retail.
Blurring boundaries between offline and online shopping experience
A few years ago, Amazon opened its first physical store, a bookstore. The general trend is that physical stores open to the online world and not the other way around. Today, Amazon maintains 6 different brick-and-mortar stores, from bookstores to grocery stores. It means that people need physical stores, but in a way that they are closely connected to their online counterparts.
The sharp line between online and offline retail is therefore becoming increasingly blurred. This, of course, has been a topic of conversation for many years, but only now is it starting to become perceptible. Modern retail combines digital solutions with the physically tangible in a subtle and invisible way. This means that brands will increasingly strive to implement omnichannel solutions, creating a consistent customer experience across different channels and devices and enabling customers to seamlessly navigate between different channels.
Even more payment methods
The available payment methods have undergone a huge change in recent years. Cash payments have increasingly been pushed into the background behind credit cards. First, we paid through magnetic tape, then using chips, and finally contactless and mobile solutions gained ground. In 2021 and beyond, the world will most likely shift to biometric payment solutions, plus biometric payments should be imagined on their own, not as part of a multi-factor authentication.
One example of this is a Danish university canteen where shoppers can pay using their fingerprints. But we can also mention Amazon’s new palmprint scanner, and Amazon has already begun to introduce this solution in its physical stores.
Another trend in the world of payment solutions is the adoption of cryptocurrencies, primarily bitcoin, which is already supported by several international payment solutions (e.g. Coinbase, Bitpay).
Increasing popularity of voice search solutions
Recently, voice search has become more and more popular. According to a 2018 research, the proportion of people who used voice search on their mobile phones was 27% worldwide. Since then, digital assistants have also become more advanced, making the voice-guided search option even more popular.
This method also gains more and more space during purchases, from simply finding products to an exact purchase. OC&C estimates that the expected revenue from voice commerce is $40 billion in the United States and $5 billion in the United Kingdom by 2022.
Voice-guided search also plays a big role in finding local businesses. In 2019, in the United States, for example, 58% of shoppers used this method to locate local retailers.
This trend will certainly continue, as it is much more convenient to rely on live speech than to type search terms.
We can buy directly what we see on TV
A lot of us have been thinking about how good that shirt on the protagonist looks while watching a good series, say on Netflix. Today, we’re not far from buying that fantastic shirt with a single click.
In late 2020, NBC aired TV commercials that were tied to a mobile app, allowing us to buy what was on the screen with a single tap. It really looks like this technology will soon be a standard feature on all smart TVs.
Customization at a higher level
So far, there have been many opportunities for customers to enforce their individual requests and requirements: how they would like to pay, how and when they want the purchased products to be delivered, products in general are available in several colors, sizes, and so on, but this can be further enhanced. In Nike’s webshop, for example, we can personalize our favorite Nike Air shoes as we wish.
The customizability of a product is not new, but the fact that we can do all this at an affordable price and in a matter of moments is an absolute novum. 3D printing brings fast customization to the manufacturing process, which is moreover inexpensive and accessible to anyone, so it’s only a matter of time before this approach becomes the norm.
Even faster delivery
As we shop more and more online, the demand for faster delivery is growing. After all, if we walk into a store, the product will be ours immediately after purchase, we do not have to wait for it. We expect pretty much the same from products purchased online. First, 2-day delivery became available, then 1-day, same-day, and finally within 2 hours express delivery is here for us. According to a PwC survey, 88% of customers would be willing to pay for a quicker delivery.
Amazon also has this need in mind, as with its Prime Air service, customer can get their purchased product in 30 minutes thanks to Amazon’s drone technology. After this, the appearance of startups with delivery robots is only one step away. Incidentally, same day delivery service was already in the offer of 51% of American online stores in 2018. The speed of delivery is becoming increasingly important.
In addition to the above mentioned trends and innovations, there are, of course, a number of other retail trends, such as the increasing use of contactless solutions (eg pre-packaged buns on store shelves, pin-code identification instead of a signature during delivery, etc.), the growing popularity of shopping using social media platforms, grocery stores tend to move to the online space, the growing market for the sale of personal care products, the advancement of chat bots, the rise of solutions spiced with artificial intelligence and augmented reality technologies, or the increased attention to recycling.
It is still a question of how much we can return to our well-used way of life before the pandemic in 2021, but it is already certain that customer habits and expectations have changed over the past year and a half to such an extent that they will remain with us permanently. It means that we need to shape our business strategies and innovations of the coming years with these in mind.