E-commerce platform Shopify advises retailers to prepare for trends including increasing influence of younger consumers in the coming year.
“The Future of Commerce 2021” is Shopify’s first annual report, using its global retailer and consumer data to predict changes in the retail landscape during the new year. Analyzing data from Shopify’s more than 1 million global retailers and online surveys of more than consumers in 11 countries (including the U.S. and Canada), the report reveals five key predictions for retailers. A brief overview follows.
1. Young consumers will change the business landscape as e-commerce charges ahead. According to Shopify, young consumers in particular are driving the following subtrends:
84% of consumers have shopped online since the pandemic; 65% have shopped in-store.
79% of consumers say they will shop online regularly in the next six months; only 57% say they’ll shop regularly in store.
67% of younger consumers (18-34) shifted more of their spending to online shopping since the pandemic was declared, compared to the 54% average.
Younger consumers are more likely to discover and shop via social media, prefer to shop for sustainable and green products, and shop to have an impact.
2. Physical retail will transform as we know it, giving local businesses new advantages. Shopify analysis indicates omnichannel features and experiences that retailers adopted in 2020 will revitalize physical stores and allow them to take advantage of proximity to local consumers. Compared to the same period in 2019, the number of shops offering contactless payments on Shopify increased by 122% during the pandemic.
Among customers who used alternative fulfillment methods, over half did so more often in the past six months than before the pandemic was declared. This includes a 64% increase in BOPIS/curbside, 57% increase in consumers using a pickup point option, and 57% increase in local delivery.
3. Consumers want to shop independent. Half of consumers (50%) surveyed by Shopify look for independently-owned businesses to support for reasons including supporting entrepreneurship, buying unique products, and experiencing good customer service. Almost six in 10 (57%) are willing to shop at new brands or stores for the first time.
Shopify advises independent retailers to highlight the benefits of their business models and adopt features offered by large retailers to meet consumer needs, including fast and free shipping. Six in 10 (59%) surveyed consumers say free delivery would improve their online shopping experience, while 40% say free returns and 34% say faster delivery would make online shopping better.
In addition, at the start of the pandemic from March through April 2020, marketing on Facebook and Instagram via Shopify’s channel integration saw 36% growth in monthly active users—a trend that continues to rise.
4. More consumers will vote with their wallets. According to Shopify data, 53% of consumers prefer green or sustainable products, and 49% respond positively to retailers making a donation to a cause with each purchase. Almost one-quarter (23%) of consumers shop at local or independent retailers to reduce their environmental impact.
Consumers’ main reasons for shopping at a locally owned business (online or in-store) include strengthening the local economy (57%), helping support local job creation (41%), and investing in their community (35%).
5.Modern financial solutions will disrupt retail and consumer banking, finance, and lending. Buy now, pay later has grown in popularity, with the number of Shopify retailers offering flexible digital payments increasing by 60% since the start of the pandemic. In the U.S., millennial fathers are the most frequent users of buy now, pay later, particularly when spending on high-priced items like electronics.
Of U.S. consumers that have tried a buy now, pay later option, 41% are 18-34 years old, 56% are men, and 52% have children at home.