5 Hidden Trends That Will Shape E-Commerce in 2021

Many companies are now wondering about the long-term impact of coronavirus on the retail and e-commerce industry, and what lasting changes it may leave. Despite the doom mongering, many brick-and-mortar stores are doing very nicely online, and so are smaller e-commerce players, with average e-commerce businesses reporting a 15 percent increase in annual revenue since April — despite the assumption that the entire retail sector is in crisis mode since COVID.

Those are just a few of the surprising findings that came out of a recent study by Brightpearl into retail performance and changing consumer behavior since COVID. In addition, a number of unexpected trends are likely to shake up the retail landscape even further in 2021.

Here are five hidden e-commerce trends to watch out for this year:

1. Stores to Be Valuable E-Commerce Assets

The common wisdom may be that online shopping is killing physical stores, and certainly, it’s doing a number on many weaker retail chains. However, other store-based retailers are succeeding with an understanding that physical locations can be valuable e-commerce assets — especially in the post-COVID era.

A big part of the online growth for retailers this last year has come from offering curbside pickup and buy online, pick up in-store (BOPIS). In 2021, this growth looks set to continue, with the latest research indicating that as much as 41 percent of consumers intend to increase their use of BOPIS this year. It’s going to become a mandatory requirement for any retailers looking to increase their overall sales in a big way.

2. Optimized Delivery Strategies Must Be Top of Any Online Retailer’s Agenda

According to recent data, unreliable delivery over the past year has created a crisis of confidence amongst online consumers, with almost 40 percent of shoppers experiencing delays to their orders.

As e-commerce sales continue to grow, implementing optimized delivery strategies will top the priority list in 2021. Those strategies will likely focus on two key components: offering a speed of delivery that will ensure the retailer is keeping pace with competitors and the surge in online ordering, and a variety of fulfilment options that are in line with changing consumer demands, such as blended experiences and local pickup.

Key to success in these areas will be adding speed and flexibility to their fulfillment, and one hidden trend will see more retailers seeking to automate retail workflows, from order processing to inventory and shipping, so they can get orders out the door quickly and meet expectations around convenience.

3. Online Retailers Will Prioritize Trust to Attract and Retain Customers

Trust is increasingly becoming a key driver in selecting which brands to shop with online. In fact, more than half (51 percent) of consumers are now saying it’s their primary buying motivator, topping other considerations like brand name and even price. Consumers are searching for retailers that will deliver a consistent buying experience, something that has been compromised as so many brands pivoted to an online model without the correct infrastructure in place. This, in turn, has led to widespread issues with delivery, communications and returns, and an environment in which 42 percent of shoppers have lessened their trust in online shopping due to poor experiences.

Throughout 2021 and beyond, we will see retailers seeking to re-establish trust with customers through investment in every touchpoint of the end-to-end customer experience with an understanding that ownership is the key to building trust — and trust breeds long-term loyalty — a prerequisite for success in this troubled climate.

4. Smaller Online Retailers Are Closing the Gap 

With big players such as Amazon.com, Walmart, and Target expanding their online presence, it would be easy to assume that smaller online retailers are suffering as a result. However, that isn’t always the case.

On average, U.S. e-commerce businesses reported a 15 percent increase in growth last year. As the data shows, many smaller and midsized retailers are doing well online. The opportunity is there for them to build on this growth, but steps must be taken to compete with bigger players on delivery speed and overall operational efficiency.

In 2021, expect major increases in operational alliances as smaller businesses seek the speed, flexibility and level of productivity needed to carve out their own online niche and challenge the status quo.

5. E-Commerce Brands Will Increase Tech Spend

Investment in technology will be at the forefront of retail strategies for 2021, with 68 percent of retailers planning to increase their technology spending over the next 12 months.

The major technology initiatives online retailers are prioritizing in 2021 include web personalization, social media marketing, and a broadening of online payment options.

What's notable is that merchants are once again prioritizing the pre-purchase journey with regards to their investments. In the race to attract direct sales, few e-commerce brands are addressing the operational complexities that lie beyond the buy button, and this is risky. Doing so can result in customers not receiving items on time, products not being delivered where they should be, or poor communications post-purchase. Companies weighing technology investments should start with making sure they have the right infrastructure in place to deliver an optimal shopping experience at all points of the purchase journey.

Derek O’Carroll is the CEO of Brightpearl, a retail operations platform for retailers and wholesalers with a clear mission to automate the back office so merchants can spend their time and money growing the business.