Infographic – The Retail Revolution: key trends in the e-commerce market

By Katerina Mansour - 19 May 2021

The retail sector, which was already going phygital, is transforming in the wake of Covid-19. Retailers with an online presence and e-commerce businesses have experienced many challenges this past year. They’ve also been presented with many opportunities. According to data from EY, retailers made around $10 billion e-commerce investments, acquisitions and partnerships from May to July 2020. Adoption rates and demand for online tools and shopping are soaring.

In this infographic, we look at some of the key ongoing trends both for consumers and businesses.

The pandemic’s influence on shopping

Free shipping, convenience, lower prices and coupons are commonly cited reasons consumers shop online. However, in 2020, the reasons behind this shift were different. Indeed, because of health concerns, shopping habits have drastically changed over the past year. In 2020, e-retail sales accounted for 18% of all retail sales worldwide. This represents a significant jump compared to 2019 when the number was just 13.6%.

In May 2020, 46% of UK residents said they shopped online more and 71% said they went to shops less. The shift to online shopping could last beyond the pandemic for many. Indeed, in 2019, millennials already indicated they made 60% of their purchases online. Surveys also indicate many consumers intend on continuing to shop online after the pandemic.

Trends to keep an eye on

The $10 billion worth of e-commerce investments mentioned earlier include tackling last-mile delivery issues and embracing new technologies such as AI. This arguably reflects some of consumers’ most prominent expectations: a good delivery experience, personalised shopping recommendations, virtual product testing options and stellar customer service.

Better delivery options and transparency

Last-mile delivery is an area where many experimental solutions are coming out, including automated delivery robotics. Retail and e-commerce brands must meet consumers’ high expectations when it comes to their delivery experience. According to Accenture, 90% of shoppers track the delivery status of their online orders and believe delivery needs to fit in with their hectic lifestyles. This means more delivery options that adapt to varied lifestyles (late night deliveries, same-day delivery, click and collect options, etc). This also highlights how consumers want transparency on their delivery, namely through tracking. 47% of surveyed consumers indicated they wouldn’t order again from a brand with poor delivery visibility.

More sustainability, namely in packaging

While in some regards sustainability in retail took a hit due to the pandemic, it’s still at the forefront of customers’ minds. Several surveys indicate how multiple age groups consider sustainability to be important when it comes to retail and e-commerce. Indeed, 58% of Gen Z prefer their purchases to come in eco-friendly packaging. 55% of US consumers surveyed by McKinsey indicated they were extremely concerned about the environmental impact of product packaging. Furthermore, 60-70% of them indicated they’d be willing to pay more for sustainable packaging. As such, packaging innovation is increasingly recognised as a priority for brands.

Fast, convenient and high-quality customer service

Customer service has been a focal issue for years now. Investing in improving customer service provides a promising ROI. Surveys show that while consumers might not always talk about their negative customer experiences, they definitely talk about positive ones. Furthermore, customer service can make or break brand loyalty. With more demand for online shopping comes more pressure to provide quality customer service. This segment has become increasingly automated and digitised, namely through chatbots or chat communication with customer representatives. 79% of consumers favour live chat support as response times are immediate, unlike phone calls. As such, data shows 67% of B2C businesses use live chat for customer support.

Personalisation and augmented shopping experiences

As has been the case for several years now, consumers seek personalisation in their shopping experiences. Personalised cart recommendations, website landing pages and marketing campaigns help boost sales for retail and e-commerce brands. As such, surveys have shown 79% of retailers are investing in personalisation tools.

Augmented shopping is also an increasingly popular option for businesses to boost online sales and improve customer experiences. It can be used to help consumers try on makeup or clothing through an app to help guide them in their online purchases. It can also be used for home goods and furniture to help visualise products in the intended space. 61% of US-based consumers say augmented reality has changed where they decide to shop. Furthermore, 40% of them said they would pay more for a product if they could experience it through augmented reality.

Startups help address pain points and tackle new trends

Several startups offer retailers and e-commerce businesses solutions covering all of the trends mentioned in this infographic, and many more. Retail tech startups in France raised around €300m in 2019, highlighting the demand for new technologies in this space.

Startups like Opopop (rated by Early Metrics) and LivingPackets tackle the issue of sustainable packaging. They offer alternatives to wasteful packaging by offering reusable pouches/boxes that are sent back by consumers. Packaging developed in this segment also often includes sensors or other devices to help customers track the location of their order.

Revieve, one of Early Metrics’ top-rated startups, develops AI advisors for personalised online beauty, health and wellness shopping. This helps B2C brands improve customer experience and address high demand for personalisation. Augmented reality also enables personalisation. For example, Hapticmedia, another highly-rated startup, has partnered with several luxury brands to provide online shoppers with the ability to configure their own custom products (e.g. Baume watches).

Regarding delivery, Amazon has been testing autonomous robot deliveries since 2019. Many other delivery companies have been testing these types of solutions, including USPS. Startups like Flytrex have experienced noteworthy successes with their fast drone delivery solutions.

Ultimately, e-commerce shows no signs of slowing down. The key will be for retailers to continue focusing their attention and investments on digital tools and solutions, even when their brick-and-mortar shops reopen.

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