These Five Digital Trends Are Changing Commerce This Year
The internet became a lifeline during the pandemic. Digital platforms helped facilitate daily activities—and commerce was no exception. Retailers, brands and hospitality operators pivoted online to engage and reach their customers.
Nearly 90% of professionals surveyed in November expect customers to judge their company based on their digital capabilities post-pandemic.
Source: Euromonitor International Voice of the Industry: Digital Survey
Companies need to understand tech-driven shifts now more than ever to better serve the widening pool of digital consumers. This year, Euromonitor International expects these five digital trends to redefine commerce.
Into the metaverse shop
Standing out in a crowded digital marketplace means turning the static online experience up a notch.
The promise of a better connected, more holistic virtual world known as the metaverse could further transform online shopping by creating immersive brand interactions and shopping engagements. In some ways, the metaverse is an extension of the virtual, augmented and mixed reality technologies in use today.
Innovative companies continue to integrate AR/VR technologies into their commerce experiences.
Euromonitor surveyed business professionals about their tech initiatives and results indicated that investments will first focus on brand engagement before more complex use cases like replicating a physical experience online or creating a virtual showroom.
Early adopters begin to set the stage in 2022, but all brands will likely need a metaverse strategy within a few years.
Delivery in minutes
Convenience has driven the evolution of delivery. Reducing delivery times will be key to sustain ecommerce growth.
In the last year, startups like Getir, Cajoo and Gopuff received a windfall of venture capital to support this objective. These players aspire to steer the next stage of development—delivery in as little as 10 minutes. To achieve this, they focus on localising operations and positioning products closer to the end-consumer before an order is placed.
This new business model makes product categories that had previously been somewhat insulated from the rising tide of ecommerce, such as food and beverage, easier and quicker to receive through online orders.
The results of this shift are already evident.
The percentage of digital consumers who bought groceries online increased from 48% in 2020 to 54% in 2021.
Source: Euromonitor International Voice of the Consumer: Digital Survey
Food and beverage saw one of the highest jumps in online purchases compared to other products. Emerging from the pandemic, ultrafast delivery will likely shape the next iteration of ecommerce, making impulse purchases more accessible online.
The ecommerce boom has put convenience and sustainability at odds.
Online orders have led to higher carbon emissions from the last mile with same-day deliveries further increasing emission-intensive air transport. Moreover, online deliveries from retailers and foodservice operators often come in single-use plastics and other non-recyclable materials.
On top of that, ecommerce produces high rates of product returns, causing additional emissions and packaging waste. Against this backdrop, online players are under scrutiny to make products, packaging and deliveries more sustainable.
In 2021, 46% of digital consumers said climate change will impact their lives more in the next five years than it does now, up four percentage points from 2019.
Source: Euromonitor International Voice of the Consumer: Lifestyles Survey
And this movement is expected to accelerate on the back of the pandemic. With rapidly changing expectations and stricter regulation looming, a transition towards sustainable ecommerce appears inevitable.
Global supply chains are being pushed to the brink, and labour shortages are intensifying.
These factors have a ripple effect on expected delivery timeframes, which are becoming less reliable. As a result, more consumers are expected to “skip the ship” in favour of click-and-collect services, forcing retailers and foodservice operators to rethink their omnichannel strategies to keep up with this surging demand.
Alongside this evolving consumer mindset, operators realise that pickup serves their best interest more than home delivery. Lower costs are incurred in comparison. And click and collect is the only ecommerce fulfilment method that could help revive footfall.
Aggressively promoting these services, and even incentivising this behaviour with discounts or loyalty points, will be in operators’ best interests. American retailers like Walmart, Ulta, Sephora, Petco and Bed Bath & Beyond are ahead of the curve, offering pickup discounts in recent months.
The concept of loyalty is in flux—both what it means and how it is rewarded.
Consumers are more digitally savvy, leading to increased expectations. Fortunately, there is a greater volume and variety of data that companies can use to not only get more personal but also more predictive.
Creating an ecosystem that offers more than a singular product or service can help build loyalty and encourage consumers to share even more of their personal data.
Amazon and Alibaba are two best-known examples of companies that have diversified beyond their core offerings to create platforms that keep consumers coming back.
Ultimately, digital consumers respond to brands that can foster an intimate conversation by cultivating a store or website that seems specially designed just for them—or put another way, a segment of one. Companies also must shift from reactive to real-time, and even predictive, customer strategies.
This Featured Article has been produced by Euromonitor. Rize ETF Ltd make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability or suitability of the information contained in this article.
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Euromonitor International, “These Five Digital Trends Are Changing Commerce This Year”, April 2022. Available at: https://www.euromonitor.com/article/these-five-digital-trends-are-changing-commerce-this-year