Shopify has released its first annual Future of Commerce report that explores commerce amid Covid-19 spanning online versus offline, independent retailers to marketplaces, consumer buying behaviour and evolving financial solutions.
Shopify president, Harley Finkelstein said commerce is more than a transaction; it’s a relationship between a business and its customers.
“The importance of this relationship has never been clearer. On the heels of a record-breaking Black Friday/Cyber Monday weekend, and as we close out one of the most disruptive years for commerce and the world, we’re excited to look forward. Looking ahead, we see independent retailers and the next generation of consumers driving shifts that will pave the way for an even brighter future of commerce.”
The report has offered five key predictions that will define retail in 2021:
Young consumers will change the business landscape
While the pandemic kickstarted a behavioral shift to ecommerce with almost three-quarters (74%) of Australians shopping online since the pandemic, the highest shift was seen among young consumers aged 18 to 34 (63%), ahead of the 47% average. Younger consumers are also more likely to discover and shop via social media, prefer to shop for sustainable products and have a more positive impact on society.
Physical retail will give local businesses new advantages
COVID-19 has prompted local businesses to adapt to consumers’ changing shopping habits by offering services such as contactless payments and non-contact pickup options. Compared to the same period in 2019, the number of shops offering contactless payments on Shopify increased by 122% globally. Additionally, more than half (57%) of consumers globally are receiving items through local delivery and 64% are using BOPIS or curbside pickup options more often.
In Australia, the number of shops with local delivery orders has grown threefold since the start of the pandemic. More than one quarter (28%) of Australian consumers have used click and collect since the start of the pandemic, 31% have received online orders via local delivery, and of those who used local delivery, 16% were first-time users.
The omnichannel features and experiences that retailers adopted in 2020 will give new life to physical stores.
Consumers want to shop independent
In Australia, 55% of consumers look for independently owned businesses to support, but consumer intentions are not yet reflected in their purchasing habits with only 35% having purchased from an independent business online or in-store.
Independent retailers should highlight the benefits of their business models and adopt features offered by large retailers such as fast and free shipping, conversational commerce and shoppable social media.
More consumers will vote with their wallets
Almost half (46%) of Australian consumers prefer green or sustainable products and 44% respond positively to retailers making a donation to a cause with each purchase. Australian consumers also will choose to shop at a locally owned business to strengthen the economy (58%), help support job creation (48%) and invest in their community (37%). Brands must demonstrate authenticity, transparency, and accountability.
Modern financial solutions will disrupt business
Buy Now, Pay Later (BNPL) has grown in popularity with the number of Shopify merchants offering this service increasing by 60% globally since the start of the pandemic. Providing options that traditional banks don’t offer, financial solutions that prioritise speed and access to capital, faster ways to pay, and more flexible payments like installments are in high demand.