Although the world is reeling amidst the pandemic known as Covid-19, people are spending vast amounts of time in their homes. While stuck at home, there are few brick-and-mortar retail locations to shop, leading consumers to their digital devices for essentials, and stipend splurges.
This year will be a defining year for technology, and the retail industry’s ability to evolve, perfecting the need for optimized omnichannel experiences that consumers demand. The following analysis will dig into a few ways in which e-commerce trends will flourish over the coming year.
The Boom Of D2C Commerce
In the new era of social distancing, consumers were unable and unwilling to travel to brick-and-mortar retail locations. This shift has forced businesses to build stronger and more creative approaches to their e-commerce models. As a result, D2C commerce is booming, offline spending has decreased, and sellers are boosting investments in their online channels. Where small businesses may not have invested resources into an app or website, they are now pivoting to adapt to the increased demand, in hopes of staying afloat. Allen Bonde, a Forrester analyst, found that 64% of firms plan to spend more on their own websites, 58% on their apps, and 52% on social media.
The same adjustment is being made on the consumer side as well. For, in the past, those of whom were skeptical of shopping online, have learned out of necessity to place an inherent trust in e-commerce. Moreover, nearly 90% of customers say their behaviors are different, in regard to the avoidance of brick-and-mortar locations. Additionally, consumers are gravitating more and more toward social media for their impulse and influencer-approved purchases. Companies such as Snapchat, Facebook, Instagram, and Pinterest, have all created virtual marketplaces in hopes of capturing as much revenue as possible.
Social Commerce Just Got Bigger
The growth of social commerce has been exponential over the last decade. Due, in part, to social media becoming more than just peer-to-peer communication. Injecting feeds across numerous platforms, businesses have tapped into the spontaneous scrolling effect of advertisements. David Python, CEO of Cariuma, confirms that this engagement allows for businesses to experiment with different mediums of engagement. Including unique additions of SMS text, and through gamification.
Perhaps, a prime example of this is the recent collaboration of Shopify and Facebook. This project, called Facebook Shops, assists merchants with creating a digital storefront to invite customers to browse their products and make their purchase in-app. Their mobile-first approach has proven successful on its own, but according to Shopify CEO, Tobi Lütke, the pairing of the two platforms shows immense promise in advancing entrepreneurship and commerce.
The one obstacle with social media ads is when the customer has to leave the platform. When that happens, many customers lose the urge to purchase. This phenomenon is in direct correlation with a lag between the customer seeing the item, and the moment the product is purchased. Meaning, the longer it takes to check out, the harder it is to close the sale. With e-commerce moving directly to social media platforms, that margin gets filled, positively impacting sales.
Few markets adapt quicker to technology than that of Southeast Asia. According to a recent consumer report, 85% of respondents across the region said they have tried new digital apps during Q1 this year. The second-largest e-commerce platform in China, JD.com, has developed a shopping medium within the WeChat communications app. This mini-program has seen great success since its inception—27% of Mini Program traffic comes from this swipe down the interface.
Southeast Asia has also become one of the leaders in the growing technology of contactless payment. The innovation of cashless and cardless transactions have paved the way for the necessity of this technological advancement in the era of Covid-19.
The effects of the current pandemic will not subside anytime soon; but as the world finds a new ‘normal,’ the consensus is that social distancing and germ transfers will be in our minds for a long time to come. Meaning, people are less apt to pay with cash and cards, since it might be ‘a little close for comfort.’ Contactless payment has been around for a few years, but throughout this pandemic has shown the need for faster adaptation on a global scale. Contactless payments received an unprecedented boost during the pandemic, seen by consumers as a cleaner way to pay in-store, according to Research and Markets.
Companies such as Apple, who created a platform that is more secure than the actual swiping of a card, and Alipay in China doing the same, it is hard to ignore the benefits of this technology. With an increasing number of smartphone and smartwatches adoption amongst consumers, it is not a forgone estimation that mobile payment and contactless payments are the future.
This pandemic has shown the resilience of people in crisis. It has proved that businesses can adapt to the ever-changing market, no matter the cause. Technology survives to make everyday lives better. Perhaps, there is no better sample study than the current situation.