A Year in Review: 25 Things We Learned About Ecommerce in 2020
2020 was a rollercoaster year for ecommerce. Some businesses closed permanently while others saw unprecedented growth. There were entire sectors that were given new life as the general population spent more time at home looking for indoor activities, and plenty of e-tailers found success selling must-have items like masks and hand sanitizer.
Overall, the events of last year taught us a lot about ecommerce. Here are 25 things we learned about the industry in 2020.
1. In-App Checkout Is the Future of Social Commerce
Instagram Checkout made a huge splash in 2020 when it went mainstream and became available to all eligible businesses and creators in the US. Previously only offered to 26 brands, it was a game changer in the social commerce space. It created a seamless experience for consumers who didn’t have to leave the app to make a purchase, and that frictionless checkout undoubtedly resulted in fewer abandoned carts. In fact, it’s so popular that 130 million people tap on an Instagram Shopping post every month.
2. Influencer Marketing Hasn’t Reached its Peak
Influencer marketing is nothing new, but if 2020 taught us anything, it’s that this tactic has not yet reached its peak. The rise of TikTok alone introduced new influencers to the ecommerce landscape, and the platform’s 5.5x growth over 18 months suggests plenty of opportunities for e-tailers. It’s proven to be a lucrative strategy—marketers routinely see $7.65 in ROI for every dollar invested.
3. Private Messaging App Ads Are Gaining Steam
Every e-tailer worth their chops knows about email marketing, which is why the average online shopper’s inbox is flooded with promotional offers and brand messages they tend to delete before reading. 2020 was the year many ecommerce businesses figured out how to use private messaging apps for ads, which outperform other ads 2X-10X. Just like emails, these ads reach consumers directly, and often on a channel that they’re already using for leisure. Keep an eye on Facebook Messenger, WhatsApp, KiK and others as growing advertising platforms.
4. Brands Without Chatbots Won’t Last Long
In today’s fast-paced world, consumers don’t have time to call a 1-800 number to wait on hold before speaking to a customer service rep. It’s far easier and more convenient to use live chat, which is often handled (in part) by chatbots. This artificial intelligence tool can “understand” a customer question and provide answers to simple queries. This way, the more complicated conversations are left to your human reps.
5. Mobile Commerce Is Surging
The events of 2020 led to a widespread increase of screen time once education and entertainment went virtual. Keeping up with friends, family and current events kept many consumers glued to their mobile phones, and online shopping ensued. During Cyber Week, 58% of ecommerce purchases were made using mobile devices, and mobile’s slice of the pie grew over the course of the holidays.
6. Visual Search Is a Huge Opportunity
The experts predicted that visual search would be a huge part of the way we shopped online in 2020, and they were right. Image and voice search comprised 50% of all searches last year, making visual search in particular a huge opportunity for e-tailers to boost their search engine and marketplace rankings. Additionally, artificial intelligence is now automating the hurdle of image classification and meta tagging, so images (including product images) appear in search results.
7. Progressive Web Apps Are on the Verge of a Takeover
Larger ecommerce brands have created mobile apps for added convenience while shopping online, but these apps will soon become obsolete. Today’s shoppers purchase from many different stores, and they don’t want to switch between multiple apps to do so. Progressive web app (PWA) technology solves this problem by facilitating an “app-like” experience without requiring you to leave your internet browser. Therefore, it more effectively streamlines the shopping experience.
8. Voice Shopping Is on the Rise
As noted earlier, voice searches make up a healthy portion of all online searches, which means it’s time for e-tailers to optimize their sites. More than half of American households own a voice-controlled speaker like an Amazon Alexa, and a small but growing number of them are being used to shop online. Make sure your site is full of long tail keywords to accommodate longer voice searches, and watch the sales roll in.
9. AI Is the Ultimate User Experience Tool
Ecommerce artificial intelligence is changing the game by cultivating better, more personalized user experiences. Everything from chatbots to “smart” search results is powered by AI these days, and we learned last year just how powerful this technology can be. Here’s a can’t-miss statistic: It can lift sales thresholds by up to 70%.
10. Personalization Drives Higher AOV
It’s impossible not to sing the praises of ecommerce personalization. This strategy gives each shopper an experience created just for them, which makes them feel recognized and willing to trust your brand. In turn, personalization impacts AOV (average order value) because shoppers are more receptive to personalized ads, especially when those ads show recommended products. The result is a bigger shopping cart and a happy e-tailer.
11. Instant Gratification Is Expected in Ecommerce
We’re living in the instant gratification age where anyone can have food, ride shares and other commodities delivered within the hour, and offering two-day shipping is the bare minimum. The timeline has shrunk, so to speak, and shoppers now expect next-day or same-day delivery when they buy online. There are ways to make fast deliveries a reality, and they will certainly attract new customers who want their purchases immediately.
12. BOPUS Is Here to Stay
BOPUS, the fulfillment method that stands for “buy online, pick up in store,” was a saving grace during the national lockdowns last spring. It offers the convenience of shopping online and the instant gratification of in-store purchases—what’s not to love? In fact, 70% of US online shoppers are using this method at any given time, and 40% say it’s a must-have feature. After so many consumers adopted BOPUS in spring of 2020, we can confidently say it’s here to stay.
13. Shipping Carriers can Handle Serious Volume
Since March, shipping carriers have been handling holiday-level volume every single day as more consumers opt to stay home and buy online. Salesforce predicted shipping systems would be burdened with 5% more volume than they were prepared to handle during the holidays, but the busiest season was a smash success regardless. Even in the face of adversity, these carriers will (literally) deliver.
14. Sellers Can’t Always Rely on the Big Carriers
Though we learned that the largest shipping carriers—USPS, UPS, FedEx and DHL—can handle some serious volume, the strain led to widespread delivery delays. It highlighted the need for e-tailers to get creative with their shipping and explore options like regional carriers and parcel delivery networks. Additionally, shipping software like ReadyShipper can help online sellers manage their shipments and gain visibility into shipping efficiency.
15. Dynamic Pricing Is Expanding to More Stores
Have you ever looked up flight prices and then returned to the airline’s site, only to see that the costs rose? You saw dynamic pricing, which is technology that optimizes an item’s price based on timing and profit, in action. If the item is in high demand, the price goes up to secure the highest profit. This practice is standard in the travel industry, but it has expanded to Amazon and beyond.
16. Omnichannel Is a Requirement
Today’s shoppers take complicated customer journeys that have both online and offline touchpoints and typically occur over multiple devices. For brands that want to stay top of mind, omnichannel is more or less a requirement (which is why we labeled it as one of the most important disruptive technologies we’ll see this decade). The most effective strategy is to seamlessly blend in with consumers’ existing experiences (such as scrolling through social media), so your brand is subtly ever-present, subconsciously reminding them to make a purchase.
17. Your Next Delivery Option? Drones.
Drones have been part of the parcel delivery conversation for a long time, but Amazon is finally making it a reality. The Amazon Prime Air project has received over $2 billion in investments since 2012, and it’s leading the charge for the 2.6 million commercial drones that were used in 2020. Soon, “deliver by drone” will be an option for many online shoppers.
18. Shopping Can Go Virtual with Augmented Reality
Augmented reality was already a popular tool used by apps like Snapchat and Instagram to distort or “filter” the faces of users, but it is increasingly popular in the online shopping world, commonly referred to as “virtual shopping”. This technology superimposes one image onto another, so the user sees the final composite. For example, furniture retailer IKEA proved shopping can go virtual by launching an AR app that let shoppers see how products would look in their homes.
19. E-Tailers Should Design a Customized Customer Journey
A major learning from 2020 was the importance of the customer journey, whether it’s choosing a t-shirt color or buying a car. Ecommerce marketers should be familiar with the awareness, consideration and decision stages of the journey and tailor each step to the consumer. That way, the shoppers feel appreciated and develop trust with your brand.
20. The Subscription Economy Is Booming
Years ago, the average consumer could probably name only a handful of subscription boxes, including early players like Harry’s and HelloFresh. However, the industry has since exploded, and products from every corner and niche are now available on a subscription basis. In 2020, we learned there is still room for this sector of ecommerce to grow, especially as shoppers continue to stay home amid the pandemic.
21. Automation Has Changed the Landscape
Ecommerce automation is a game-changer for busy e-tailers who have to focus on sales, marketing, administrative tasks and more. It can handle the busywork and give sellers time back in their days to grow their businesses. In fact, 40% of businesses are actively working to add automation to their operations—this isn’t just a fad.
22. Micro-Moment Marketing Gets Consumers’ Attention
In 2020, several brands pivoted from traditional marketing tactics to using “micro-moments,” or quick attention-getters that are more in line with how shoppers consume media nowadays. Ads, Tweets, pop-ups, push notifications and other similar advertisements (and call to actions) all fall into this category, and they get shoppers’ attention better than email or other slower methods.
23. Shoppers Crave Authenticity
Give the people what they’re asking for by utilizing UGC, or user-generated content, in your ads. This type of content has always been valuable, but last year we learned it will always be king. The pandemic brought out the human side of many brands, and authentic messaging was a big part of connecting with shoppers. Showing real customers using your products is much more effective than stock imagery, plus is shows social proof.
24. Dynamic Apps Give Shoppers Confidence
It’s not news that buying apparel online is difficult due to sizing issues, but what if there was a way to combat that? Dynamic apps like True Fit take a shopper’s measurements and allow them to choose their own body types so the app can recommend sizes depending on desired fit. This strategy is proven to reduce apparel returns because consumers are more informed during the shopping process.
25. New Payment Options Provide More Shopping Opportunities
E-tailers know by now that customers want multiple options for making payments, but a few key players entered the scene in 2020 and made new payment methods mainstream. For starters, Shopify launched Shop Pay, which is the platform’s answer to PayPal. It boasts carbon neutral shipments and a delivery tracking app.
Also, “shopping loan” providers like Klarna and Affirm became available on more sites so shoppers could choose to pay over time, and more easily rationalize big-ticket purchases. What’s more Square has emerged as a new POS giant, and recently even grabbed up popular shopping cart service Weebly.
What’s Next for Ecommerce in 2021
The pandemic undoubtedly changed the course of ecommerce by solidifying its place in the mainstream. With all the technological developments and these new consumer behaviors, there are endless possibilities for the industry in 2021 and beyond.
Need even more tips? Read our related guide: 5 Emerging Trends in Social Commerce You Need to Know About