What you need to know about key ecommerce trends in 2021 and beyond
Wondering what the future of ecommerce looks like in a world forever changed by 2020’s global pandemic? We were delighted to have Marissa Coslov, Vice President of Insider Intelligence, join our recent webinar to share some key ecommerce trends you ought to keep an eye on over the next few years.
Retail transformation: almost two years of ecommerce progress condensed into one
With little other choice than to shop online, retailers’ widespread adoption of ecommerce accelerated the channel’s progress by almost two years, Marissa said. Worldwide, retail ecommerce sales grew by an incredible 25.7% in 2020. In 2021, US retail ecommerce sales are expected to reach around one $1 trillion US (17.9% growth) and $5 trillion US worldwide (16.8% growth). By 2025, worldwide retail ecommerce sales are expected to reach $7.4 trillion US.
As vaccines rollout and lockdowns end, 2021 will be the year of “revenge shopping”—where consumers seek justice for the stolen time of the pandemic by indulging in the luxuries and products they missed. Marissa said this means physical stores will have their moment in 2021 with growth not seen since the great depression. Non-ecommerce retail sales in the US will see 6.3% growth in 2021. After this jump, however, in-store retail sales will see minimal annual growth with sales growth decreasing annually from 1.5% in 2022 to 0.6% in 2025.
Pandemic online shopping behavior will stick
Marissa said pandemic online shopping behavior is going to stick. The average spend per digital buyer grew over 32% in the US in 2020, and that spend will continue to grow steadily through 2023. “In 2019, we saw that on average people were spending about $3,000. By 2023, we’re seeing that jump to about $5,400, which is significant growth by that point.”
While people like to browse using their phones, actual buying still happens primarily on desktop/laptop computers. Data from Rakuten Advertising shows that US ecommerce referral traffic sales share is 63.6% for desktop/laptop computers versus 33.9% for mobile phones.
Still, global ecommerce sales on mobile phones (“mcommerce”) grew 18.6% ($3 billion US in sales) in 2021, and retail mcommerce will continue to see growth to an estimated annual $5 billion US by 2025.
Friction-free speed and convenience, click and collect, and Buy Now, Pay Later
Now more than ever, US shoppers value quick and convenient digital shopping features that provide a friction-free experience, Marissa said. The most important digital shopping features cited in a survey by Savings.com were fast shipping options (46% of respondents) and simple returns processes (44% of respondents).
Meanwhile, the click and collect trend (commonly referred to as “curbside pickup” or “buy online pick up in store”) is expected to reach $83.47 billion by 2021, more than doubling its penetration since 2019, with modest growth through 2024.
Marissa highlighted the strength of the Buy Now, Pay Later (BNPL) trend—a form of short-term financing that allows customers to purchase goods but pay for them later or by installments. BNPL service users more than doubled between 2019 and 2020 and they’re projected to double again in 2021. Insider Intelligence forecasts about one quarter of the population will be using BLPL services by 2023.
Grocery ecommerce sees massive growth, Amazon is still king of ecommerce
Food and beverage, household goods, and personal care and beauty are growing very quickly in both the US and the UK, Marissa said. In 2021, the UK saw food and beverage ecommerce sales grow 33.6% and household goods ecommerce sales grow 32.6%, with similar growth in the US. This year (2021), the UK will see food and beverage ecommerce sales reach almost $39 billion. By 2025, Insider Intelligence estimates food and beverage ecommerce sales will reach $53 billion.
“Amazon remains the undisputed king of ecommerce,” Marissa said, with 41.4% ecommerce sales share in 2021, followed by Walmart (7.2%), eBay (4.3%), Apple (3.8%), the Home Depot (2.3%), and Target (2.0%). You can see the top 15 companies in the US, ranked by retail ecommerce sales share in 2020 and 2021, when you sign up to receive access to the webinar.
Social commerce unexpectedly takes off during pandemic
Social commerce, a subset of eCommerce that involves the buying and selling of products and services directly within a social media platform, unexpectedly took off during the pandemic. “It’s an area we weren’t really predicting huge growth in pre-pandemic, but it really took off because of people being home and spending more time on social media and buying more online,” Marissa said.
Social commerce is here to stay, Marissa said. Instead of knowing exactly what you want and typing it into Amazon’s search bar, social commerce creates a shopping experience of discovery online. Now, consumers can discover new brands and products through their favorite influencers and creators on their socials. Marissa said the average annual US dollars spent per social buyer are projected to nearly double from $406.08 in 2021 to $737.32 in 2025.
Digital wallets, cashierless checkouts, and augmented reality (AR)
Marissa said three key retail trends to watch going forward are digital wallets, which gained traction during the pandemic, cashierless checkout technologies, and 5G technology in its application to augmented reality in retail. For the latter, according to data from Savings.com, one-third of consumers surveyed said being able to try on products is more important now than in 2020. Retailers are trying to mitigate these points of friction with different technologies like virtual try-on rooms and AI-powered fit suggestions. Marissa shared the example of GlamLab by Ulta Beauty, which gives the customer the tools to try on thousands of makeup colors and shades using their smart phone’s camera. While it’s not exactly the same as trying the product on in real life, AR experiences give consumers the insight they need to click “buy now.”
The year 2020 was full of surprises. Ecommerce saw massive growth as the global COVID-19 pandemic quickly transformed retail. Despite ongoing confusion about the health of the economy and uncertainties about the pandemic’s trajectory, the trends suggest we’ll continue to see retailers adapt and innovate as the world navigates its new normal in the coming years. To watch Marissa’s full presentation, check out our webinar called “The future of ecommerce: trends and strategies to drive transformation.”