The eCommerce industry is ever-evolving to meet consumer preferences. 2020 should be no different. Here’s 10 trends to keep watch on this year as you look to grow your online business.
1. DTC Brands Continue to Dominate
Direct-to-consumer (DTC) brands are disrupting the retail landscape both online and in-store. DTC brands like Warby Parker, Casper, Glossier, and Allbirds sell direct to their end users, cutting out middlemen like third-party retailers and wholesalers. They don’t rely on traditional retail distribution models allowing them to build stronger brand images and deeper customer relationships, while saving costs. DTC brands usually sell exclusively online and able to adapt quickly to meet new consumer needs. Going into 2020, we expect to see more DTC brands pop up and disrupt their respective industries.
2. Physical stores important to growth strategies – even for pure-play eCommerce brands.
As digital startups continue to grow, expect more of them to open their first physical stores. In fact, reports state that digitally native brands are set to open 850 stores in the next five years. Some notable brands plan to open hundreds of stores like Casper (200) and Adore Me (300), and newcomer Allbirds plans to expand stores across four cities. These stores could be long-standing or limited time pop up shops in major cities like Los Angeles, New York and San Francisco.
These brands recognize that customer engagement in-store is still important. Armed with first-hand customer data, these brands are opening stores in thoughtful locations and with experimental experiences. Studies also suggest that physical stores are an important growth strategy for apparel and accessory brands, especially those with high price points. 74% of digital startups opening stores fall into this category, with over half of them selling goods at a high price point.
3. Differentiate with personalized products.
One way to set yourself apart from the competition is allowing customers to personalize your product. Think of engraving jewelry, designing your shoe colors and t-shirt graphics, or creating your own product bundle. Online tools make personalization easier than ever. Customers can take quizzes, surveys, or provide feedback on product samples to curate their purchases. Leveraging these interactive experiences will help brands win more customers.
For example, I recently shopped for a subscription coffee service as a gift. I ended up choosing Driftaway Coffee because their services starts by giving the recipient a few samples of coffee blends to taste. Based on what they liked, the recipient then chooses what coffee they received in their gift subscription. This small touch of personalization gave me the confidence that I was purchasing a gift that my friend would like.
4. Brands should emphasize sustainability.
Over the past decade, there’s been more companies than ever before emphasizing sustainability or a mission bigger than making profits. TOMS shoes’ One for One program matches every pair of shoes sold with a new pair for a child in need. KIND snacks have committed millions of dollars and thousands of volunteer hours to charitable causes that spread kindness and fight hunger. More recently, there’s brands focused on products made from sustainable materials like AllBirds and Rothy’s and consider the environmental footprint.
Today’s retailers are expected to be transparent about their materials, processes, and operations. Customers have a choice of who they spend their money with. They’re considering what brands they align with and what those brands stand for.
5. Virtual Reality both in-store and online drive better interactions.
The past few years have seen significant growth in visual technology. IKEA virtual creates interactive showrooms with virtual reality for customers. Wayfair launched their second virtual reality app that allows customers to visualize new items in their homes. Warby Parker’s virtual app allows you to try on glasses before you buy them. More brands must consider adding a virtual strategy to their offerings to give customers the confidence to buy.
6. Customers look for alternative payment options.
Do you sell expensive items? No problem. Payment options like Afterpay and Affirm are giving more consumers access to luxury products by offering flexible payment options. These apps allow customers to break down large purchases into smaller equal payments over longer periods of time. Giving customers financing options combats customers scared off by a large price tag. More brands will turn to these payment option to help increase their conversion rates online.
7. Returns continue to be a challenge.
Returns are plaguing problems for online retailers. UPS predicted shoppers to return 1.9 million packages on January 2nd, National Returns Day this year. These returns cost retailers millions of dollars in lost sales. As online shopping continues to increase, so does customer returns.
When left unmanaged, returns can have a serious effect on your bottom line. The problem is that customers have high expectations. They want online returns to be free. They want clear and concise return policies. They also want options when returning, like in-store or shipping to a warehouse. Retailers will continue to find serious and creative ways to make returns easier for shoppers and control costs. For example, Amazon rolled out return counters in Kohl’s this year to make for a free and seamless experience.
8. Data privacy laws and preparing to be compliant.
Retailers should prepare for more laws and regulations for consumer data privacy. After countless stories of misuse and abuse, consumers are taking notice of how companies collect, protect, and use their personal data. At the very least, they want to be notified about who’s collecting their data and be able to take action against those who abuse it. Last year, the world saw the EU put the General Data Protection Regulation (GDPR) into effect. This year, the California Consumer Privacy Act (CCPA) goes into effect. Data privacy laws aren’t going away and shouldn’t be taken lightly. Brands must take measure to be compliant as more regulations are sure to follow.
9. B2B eCommerce continues to mature.
B2C brands aren’t the only ones who should be selling online. It’s 2020 and B2B sellers like manufacturers and distributors should include eCommerce as an integral part of their growth strategy. B2B buyers are now mostly millennials who demand better online shopping experiences, similar to how they make B2C purchases. It’s not enough to just have an online experience. B2B sellers need a differentiated online experience that includes self-service, curated content, and more. As B2B eCommerce matures, sellers should look to new technology that enhances their online experiences and integrates their backoffice operations.
10. Analytics drive better customer experiences.
This year we expect brands to make more meaningful decisions with their data that lead to bigger impacts on customer experiences. Product recommendations should be relevant. Email campaigns always timely. Discounts and coupons curated based on past purchase behavior and more. Retailers will use their analytics to drive conversions. They’ll get it right more often than they get it wrong.
That’s it! Those are our top 10 eCommerce trends for 2020. Let us know in the comments below what else you expect to see more of for online shopping this year.