The new report by Wunderman Thompson Commerce outlines the digital trends that will transform online commerce.
2020 was the accelerator that was needed for the commerce industry to pivot to the online space. The restrictions imposed in 2020 forced brands and retailers to power up their e-commerce operations and get their online offerings right. Global e-commerce consultancy, Wunderman Thompson Commerce releases a new report that highlights the trends outlook for 2021 and beyond, comprising thought-provoking digital change agents influencing what commerce is set to look like.
Livestream Commerce - From the store to the studio
Livestream commerce will change the role of the store, forcing brands and retailers to reinvent physical stores as places to buy from physically, as well as places to stream and sell from to online consumers. China had already adopted the concept of livestream commerce well before the pandemic and it was getting positive responses in the country. And now, the western world is also beginning to adopt the trend.
The premise is clear: harness the power of influencers and sales advisors on the platforms that consumers use for inspiration and purchase, and the transactions will increase. In the future, you can expect to have video calls with staff who are in-store or in-studio while you relax at home. But it is not just video – expect AR and VR to have an even bigger role in the digital stores of the future.
When it comes to content, the key is to get them hooked in the first eight seconds. In online commerce, the key to conversion is shrinking the time between inspiration, search and transaction. The term for this is known as "compressing commerce" and the report cites Amazon as a master in the tactic. 52% of global consumers visit Amazon for inspiration, 63% visit to search for products, and 27% purchase from the site. The process is simple and seamless. Yet behind the simplicity, a variety of tools have been deployed to transition consumers through the journey. Some of these include one touch purchasing, stored payment methods and personal details, easily retrievable ratings and reviews,etc. The emergence of social commerce will see this trend continue.
Brand equity is no longer enough. Brands’ foundations must be built on service. Only those organizations that fuse great brands with great service will win. As far back as 2018, a new trend began emerging where consumers who purchased online began stating that service was more important than the brand being ordered. To put it another way, if faced with the choice between getting their favorite brand, or another brand which they could get more easily, conveniently and faster, they would choose the other brand.
Now does that mean working on brand building is pointless? Ofcourse not. A strong brand reputation still remains a key factor in the purchase decision. However, 38% of consumers stated that it was more important to get the product on time than it was to get the brand that they preferred. After interviewing key digital commerce leaders for the report, all of them stated that the number one thing, that would be most important to future generations of consumers. ahead of price and brand is fast delivery. So while brand still has currency, consumers won’t buy from a brand who can’t back it up with service.
Product and service Digitization
In 2020, a significant 28% of products and services bought online were digital. Meanwhile in China, the percentage was an even higher 36%. This percentage is set to rise and rise with 34% of consumers saying they would prefer their purchases to be digital and instantly downloadable. The figure in China was a staggering 70%.
When it comes to the future generation of consumers, data from the report indicated that one in five would never buy from a retailer that couldn’t deliver the next day, while three in five said the one thing that they would change about buying online would be that all items would be delivered within two hours. These expectations around timescales are extremely challenging, until you consider that what is ordered could be digital.
Businesses need to assess whether their products need to be physical, or can they be digital? And if digitization is not an option, then what services that support the purchase can be digitized? Data from 2019 indicated that 68% of digital commerce leaders had considered digitizing some of their products and services to help address the challenges of fast- delivery expectations.
The COVID hygiene hangover and its effect on CX
Over the last couple of years, companies have been investing heavily in bringing technology to their stores. One of those technologies was large touchscreens that gave customers a tactile way to interact with a brand’s content and products. However with the pandemic still raging, will companies shy away from such technology?
The behaviors that will be instilled in humans even after the pandemic has subsided will lead to a complete shift in how we design our retail spaces, including what technology we use. It’s not just technology that will need to change – the physical store will need to be designed to better deal with the COVID-19 hangover. Expect to see more automatic doors and a greater focus on reducing the contact time customers have with the physical environment. All this adds to the complexity of designing and building a physical space that customers would want to be in.
The post-COVID gratification wave
One of the interesting developments in online purchasing due to lockdowns was the rise in the rankings of previously less prominent categories. For instance, board games and puzzles became top sellers, while the likes of outside heaters and gym equipment flipped the narrative as we realized that our socializing would have to be happening outside, with much of our exercise indoors.
As we dare to look further forward into 2021 and beyond, the question we start to ask ourselves is what will be the biggest sellers once COVID-19 is defeated? At the end of the First World War, and with the passing of Spanish Flu in the last century, the roaring twenties were ushered in, triggering a decade of economic growth and widespread prosperity, with a boom in construction, and consumer goods such as automobiles and electric. While 2020 and 2021 will have seen those providing lockdown essentials thrive, in a post-COVID world, we can expect a heightened passion for indulgence, with more decadent purchases rising to prominence – think fashion, jewelery, luxury experiences and holidays.
The Environment VS Commerce conundrum
Faster delivery, more frequent orders, easier returns, greater ranges but better sustainability. In this current world, can consumers expect better environmental practices whilst demanding next-day delivery? It may be hard to deliver, but that’s what the consumer of the future will demand. Over the last five years, 44% of consumers say that their purchasing has become more environmentally friendly, with only 4% of consumers saying that they had become less environmentally conscious. And when asked whether the environment or delivery was more important, 43% pointed to the environment; 20% chose fast delivery and 29% said they were equally important.
What is required is a fine balancing act which maintains ease, speed and convenience for consumers, whilst also ensuring that morals, ethics and sustainability are at the heart of organizations too. These values must be communicated to consumers, but above all else need to be authentic.
Plugging into social commerce's potential
Social commerce is not exactly anything new. In 2019, Wunderman Thomspson Commerce found that digital commerce leaders believed that within ten years, social commerce would be the number one online sales channel. And yet, social commerce has, up until now, felt more like a media-play, or a small-scale test. With today’s consumers spending so much of their time on social media platforms, it feels like its implementations to date really haven’t taken advantage of the clear and vast opportunity available.
With consumers pushing for range, ease, speed and convenience across all of their online shopping interactions, social stands on the cusp of an explosion. And the catalyst for this explosion is the ability for the platform to integrate with back-end systems. It is in this arena that the fight for social commerce will be won or lost. Whichever platforms can effectively integrate with brands’ and retailers’ back-end systems, will unlock the speed and scale of social commerce, and revolutionize how a new generation of shoppers will become inspired, search, and transact.
Online education - How consumers of the future will become more proficient searchers, researchers and decision makers
Generation Alpha (kids born between 2003 and 2016) would become the most demanding consumers, having been conditioned by super-fast Amazon delivery, lightning quick download speeds and an endless aisle of products to search and purchase from online. But this generation got a digital super-booster with lockdown. As online sales surged from 30% to 60% of spend during lockdowns, as grocery shopping became more about online than in-store, and as teaching went from the school classroom to the Google classroom, these future consumers just got a whole lot more digitally literate.
The new skills this generation attained will enable them to get inspired from a much wider range of sources, search faster and more effectively than ever before, and transact with the online retailers that offer them the right levels of range, ease, speed and convenience. Their expectations of digital excellence will be extremely high. All of this means that channel strategies need to be right. CX, UX and UI need to be on point. Customer service, delivery and returns all have to be spot on.