As we begin to see the light at the end of the tunnel for consumers and retailers alike after a challenging 12 months, Shopify have released their 2021 edition of their ‘Future of Commerce’ report. This thirty-two-page document reflects on how the pandemic year of 2020 affected the retail industry and discusses the impact it will have on the future of retail.
Key predictions
Young consumers will change the business landscape as online retail charges ahead.
Physical retail will change forever – namely chain shops, which will give independent retailers new advantages.
Consumers want to shop independent. Businesses will adapt to make that easier.
More consumers will vote with their wallets.
Modern financial solutions will disrupt business and consumer banking, finance and lending.
Download the report
Notable stats
84% of all consumers last year shopped online.
Of those who shopped instore, 38% said they are doing less often than in the early part of 2020.
53% of consumers avoided busy shopping times in the past 6 months and 46% said they felt uncomfortable shopping instore.
79% of consumers said they will regularly shop online in the next 6 months.
Global shopping habits
The UK was the country most changing their shopping habits with Spain, New Zealand and Italy also in the 60%. Germany was the country least changing their shopping habits. As well as being most likely to change their shopping habits, the UK was also the most comfortable with returning to in-store shopping – 56% of consumers said they would return.
Areas of interest for new and existing consumers
The report highlighted the fact that more retailers converted to new payment technology last year. 62% of consumers are now comfortable with using contactless payment technology and from the same time in 2019, Shopify say their data on contactless payment is up by 122%.
Shopify hint at the pandemic shifting all retail to online-only and from this, young consumers will continue to drive this ahead. Brands now need to up their social media presence and investment, strengthen their omni channels within advertising and demonstrate authenticity in order to stay ahead and in power.
With physical shopping at chain retail stores drastically changing, independent shops are willing to up their game and fill the spaces left by bigger retailers. This falls in line with consumer desires as 65% of consumers say they support independent retailers, with 50% saying they actively seek them out and want to find them. 57% of people said they are willing to shop with new brands, which shows openness and willingness to shop with independent retailers.
Due to the increase of consumer awareness increasing evermore, more consumers will research into brands within the areas of sustainability, transparency and authenticity. 53% of consumers have said they seek out green or sustainable products and 49% have said they respond positively to brands making donations to a cause.
Financial implications
Shopify touched upon the financial wonders and woes that have happened as a result of the pandemic. 24% of independent retailers have stressed that many of their external financing sources, like banks, do not understand the needs of their business when they have applied for financial support. On top this, many independent retailers have expressed concern in external financing sources not understanding their COVID-19 inflicted problems.
Finally, many consumers have turned to ‘buy now, pay later’ services offered to them by retailer – 56% of the consumers are men and 46% are aged 18-34. For many millennial aged fathers this is an alternative to buying high priced goods on their credit cards, and my have expressed the sentiment ‘it’s better than a credit card because it’s interest-free’.
Conclusion
In conclusion, the pandemic year has changed online retail and e-commerce at lightning-fast speed, and it doesn’t seem to be slowing down. The world is changing and retail is in it for long haul. Retailers and independent shops have seen this and adapted along with it showing its resilience as a sector. The world needs more entrepreneurs and independent business, as they are the backbone of local communities, the drivers of economic growth and they must ensure commerce is better for everyone.
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