9 commerce trends that will impact your business
As I mentioned in a previous post about the future of commerce, “2020 was about forced digital transformation, but brands that do not understand it was just a launching and the most part of the job is ahead will be back in problems soon”. That means we need to stay up to date on emerging commerce trends.
1. Social shopping
Social shopping is finally here to happen. We’ve waited too much already. Unfortunately, social search has always been terrible, but the buying journey seems to be an amazing step towards a frictionless experience – particularly on Instagram. But other social media channels are trying to get there as well: TikTok, Pinterest, Spotify, Twitch, Pinterest and even Facebook. But while Twitch, Pinterest and Spotify tend to create good opportunities in some industries only, TikTok and Instagram have a wide open opportunity spectrum. Facebook is also trying to get there, but there are two factors putting them off the top of the list: their main audience and the fact that it’s a top funnel social media designed for generating traffic, not consideration.
The social commerce trend is pretty much connected with the new way of payments standard. It’s crucial to do social commerce without friction. Avoiding checkouts, payment complications and field typings is part of a new reality where there are no pains to buy. If you think, it makes all the sense.
The potential is gigantic, because more than 70% of people adding products to a basket never buy them. Social commerce will partially solve this, but we can’t forget it is not a first party data channel. Brands will not keep audience data rights, social channels do. In this way, it’s very similar to a marketplace, but coming from a social perspective. It’s also not search oriented, but influence oriented, which means it’s quite complementary to the brands website and marketplaces.
Social selling means brands have to be prepared for a data feed management partner, more than just a digital agency making ads.
2. Subscriptions and pay-over-time
Subscriptions and pay-over-time are also trends that will get more traction in 2021. This commerce trend was rising already before 2020, but only in particular categories. In 2021, some retailers will create a creative alternative to bring long term value and repetitive purchases in products that were not being bought like that in the past. Feather, Oliver Space, Fernish, Cort give consumers the opportunity to rent a room of furniture and pay for it on a monthly basis.
Subscription payment such as Klarna and Afterpay are getting bigger, too. They act as a standard gateway, where consumers can fraction the payments medium to long term, acting similar to certain types of insurance.
One other movement is the rent-buy model, that allows aspirational shoppers to rent designer artworks for a monthly fee and eventually buy it later on at a reduced cost – or not.
In 2021, new steps will be done towards a pay-over-time commerce, not only online but also in-app.
The media ecosystem is where subscriptions are more needed, but most consumers continue to resist to pay for good curated or even original content. It’s something that has changed already in the streamed entertainment and music, where Netflix, Spotify, Amazon, YouTube Premium, Rakuten and Apple are growing business permanently. But not on magazines, newspapers and similar publishing platforms. Medium and similar platforms are trying to get into that business and change people’s behaviour, avoiding to choose a source, one of the friction on the ecosystem.
Take me, as an example: I do have a subscription of Harvard Business Review, Público and Wired, but I do often get frustrated not to have access for a certain newsfeed elsewhere. Wouldn’t it make more sense me to choose the sources at any time and pay over a curated marketplace that includes all the relevant channels?
Whatever is the way, it must include a sustainable subscription model people see value in. There is some reason most people pay monthly to Netflix, and at some points it will reflect over to other types of content.
In 2021, new steps will be done towards a pay-over-time commerce, not only online but also in-app. On the next years it will also include in-store commerce, as omnichannel increases and Order Management System (OMS) evolves.
3. Evolution on malls and department stores
One other relevant commerce trend is the need for an evolution on malls and department stores. Some people in this industry believe that things are going back to normal again. They are not. They will get some type of normality, but not go back to the same normal as before, ever again. Some malls will discover this over 2021, but the best malls will possibly be the last to be affected and can learn from others over the next quarters.
First of all: the e-commerce raise will build a more balanced negotiating power between brands and real estate owners or malls managers. But for this to happen, a new model of retribution has to be found, since e-commerce sales is not a variable fee on malls, even if sales are done inside a store or stores as used as a micro fulfillment spot. There are a lot of legal issues around this topic, but the truth is that malls have to think first of customers, not owners. This is what will produce the real changes on their long term paths.
Malls have to continue generating traffic, curating shops, building experiences but now also creating conditions for a new type of hybrid shopping.
Customers will be back to malls, but with a lower footfall and less time per visit. It’s an evolving customer, each quarter more informed, more used to e-commerce and with increasing expectation levels. Malls have to continue generating traffic, curating shops, building experiences but now also creating conditions for a new type of hybrid shopping. Resistors will be erased over the next years.
The shift to B2B2C and D2C sales
One very clear trend in the Business-to-Business-to-Consumer (B2B2C) area is the move to Direct-to-Consumer (D2C). It’s not something new, but it has an updated taste, after this unexpected 2020. The new Direct to Consumer is not for niche brands, but for everyone. And this is really, really new. You don’t need to be the Dollar Shave Club to sell directly to end customers, but you also don’t need to challenge the existing B2B2C network to do that step.
It’s now a parallel solution, designed in a way that does not threaten the existing relationships, but allows for audience insights and product insights, behavioural information and sell out information. This is more than just a small step, it is the official invitation for the industry and all B2B2C brands to step in.
4. Touch-free technology
One of the commerce trends for 2021 is touch-free technology. Over 2020, lots of companies developed technologies to be used offline in a safer way, avoiding touch. Those and other complementary ones are going to gain importance on offline conversion over the next few years.
Contactless payments are now a new norm in the industry, but that is just part of this new casino. Startups across the world are creating technologies to help brands do digital interactions that reduce frictions and avoid touch. On the other hand, it creates a full world of opportunities to collect digital data and sensors for offline micro conversions, an aspect e-commerce and digital specialists understand well in their Conversion Rate Optimization (CRO) strategies.
At the center, there’s augmented reality and how to use it to create customer value and not entertainment fads or other type of hypes that generate momentary excitement and PR, but do not help consumers on the buying path. Augmented reality is also in the overlap of online and offline, being able to create better experiences even if there’s no full stock options on a particular shop.
Integrated ecosystems that include hybrid shopping and use augmented reality create the perfect fusion between offline and online and creates exponential opportunities for an increasingly sophisticated customer.
5. The digital ecosystem
At the digital ecosystem, 2021 will be a year to create sustainable investments for the long term, now that most C Suites did understand two things: e-commerce is at the core at the future and the company cannot live without a first class complete solution for long on the one hand, and digital is not e-commerce, on the other. This last one is not totally absorbed yet, especially in markets like Portugal and Spain.
Digital influences the complete business, not e-commerce. But because most companies are not yet ready to measure that, they compare digital investments with e-commerce sales, the most frequent error in omnichannel retailers that does not allow them to grow.
Customer Relationship Management and Marketing Automation
Anyhow, this is the year that investments in technology have to be made if they were not done before. Namely, Customer Relationship Management (CRM) and Deep Marketing Automation, that allows for integrated customer service and personalized content. Some companies will dream about having the client really at the center with a 360 degree vision on each of them, something B2B companies have been building over time, but not the B2C ecosystem, at least partially.
The CRM is crucial to answer a proliferating number of consumer touchpoints, where a need for integration and consistency is a must. On the automation level, personalized content allows for more conversation rate and less client saturation levels. Both of them contribute to client lifetime value, one of the most important KPI for companies that value the future as much as the present.
2021 is the year where brands should put truthfulness on their top priorities, especially with existing clients.
Technologies such as Salesforce, Hubspot and Selligent allow also to integrate the advertising channels to clients and leads in journeys that maximize relevance in affinity and moment, using hyper personalized content. In some cases, it’s even possible to design personalized content for the website without using third party apps, creating real time marketing connected to all data guarded in the CRM account level. Most companies are not here yet, in particular in South Europe, a big opportunity for 2021. This may be the very last chance to do it before being outsmarted from competition.
Advanced Marketing Automation through a various sets of channels aims to build relationships between brands and end customers through relevant, connected engagements with highly targeted audiences, where demographic segmentation is just a part of the challenge. In 2021, psychographic and behavioural data will be crucial for brands to produce content that fits clients moods and moments.
Authenticity plays an important role here, and many brands have been failing to see this at a detail level, creating content that has a more commercial or too-structured aroma. New Gen customers in particular are able to understand how genuine brands really are, due to their native online experience and personal virtual relationships.
The time to get real is here and 2021 is the year when brands should put truthfulness on their top priorities, especially with existing clients. Marketing Automation allows us to use these principles smartly, also because it allows for the increasing needs of personalized content across seamlessly orchestrated campaigns. Moreover, the right usage of data boosts the capability for predictive insights, absolutely essential for the near future.
6. Hybrid models with agencies
One other commerce trend is the internalization of part of the core resources in digital marketing, in hybrid models with agencies and digital partners that work in a transparent way and are available to work without data ownership and sharing the operation risk. It’s time for a new set of players that operate very differently from legacy digital agencies.
Brands must know how to internalize technologies such as Google Marketing Platform, that build the right architecture for first party data, preparing themselves for a cookieless world around the corner.
In this new model, it’s important to find partners that are deeply immersed in clients’ business, and not doing some superficial marketing campaigns only. Finding performance agencies that match is a science itself, but it’s something companies should do over 2021.
Marketplaces are another area that will evolve faster over 2021, not only in volume, but also in specialization. Brands should look at a complete suite that includes direct e-commerce, social commerce and marketplaces and be ready for data feed integration and SKU aggregators.
It’s also critical to have specialized partners that understand reputation management, listening, SEO in marketplaces and marketplaces advertising, apart from account connections. It’s a science in itself, especially hard for whoever is still in the first phase.
8. Data science
A major trend that will probably grow over 2021 and beyond is data science projects. Using data in favor of the company’s decision-making has always been a challenge, but this is now an increasing area, as digital is getting much more data that can be used for online and offline purposes. Moreover, companies are mixing online with offline data in Extract, Transform and Load (ETL) projects that allow for better decision-making all across the company.
Data science itself can and will be used for predictive analytics, campaign optimization, clustering and personalization identification.
Most are not there, but will use 2021 to at least have a good Google Analytics 4 (GA4) implementation, an integrated Data Studio or similar that aggregates different sources and allows for a clear vision of all the metrics ecosystem.
Data science itself can and will be used for predictive analytics, campaign optimization, clustering and personalization identification and other goals that allow for better decision-making. Data driven decisions are the beginning – not the end – of the next steps companies can take when they realize how far they may go using data in a next level way.
Privacy is obviously a layer to be considerate even more in 2021 and following years. The tensions between Apple and Facebook are the visible face of change. Google Chrome is going to incorporate some changes over time, and the challenge to marketers is even harder.
First party data gets more importance and so do marketing automation programs to clients and known leads, even in B2C. But data science is a really growing field because it correlates with totally different fields, such as solutions in fraud and risk detection, advanced image or speech recognition or online to offline fusion.
9. Cloud as a commerce trend
Finally, it’s time for Cloud. Portugal, in particular, is more than 5 years behind in this adoption, compared with leading European countries. While in social media, mobile usage, companies digitalization and other digital metrics the south European countries are not behind, the cloud adoption is really not developed. It’s now time to make the move and it will happen at a faster pace over 2021, since it’s highly relevant for data science itself.
Would it make sense to somehow predict 2021 without touching artificial intelligence, blockchain and 5G? Probably not, but that will have to come in different articles, due to its deepness needs. Digital Affair will bring it in detail over Winter.
One thing is true: 2021 is one of the last real chances to jump ahead, using best practices on opportunities there are out there waiting for companies to thrive in their markets.