Outlook Especially Bright for Groceries, Other Sectors
According to conversion rate optimization software firm Omniconvert, the future is particularly promising for several ecommerce niche markets, including elearning, retail, groceries, food delivery, and rental products and services.
According to Omniconvert, the global elearning market was worth almost $200 billion in 2019 and is expected to reach more than $370 billion by 2026. The COVID-19 pandemic has accelerated the adoption of elearning, as it has been the only way for schools and other educational institutions to continue teaching. Popular elearning platforms include Verbling, Lessonface, Udemy, Skillshare, and MasterClass.
According to Statista, online shopping is one of the most popular things to do on the internet. Statista reports that retail ecommerce sales worldwide amounted to $4.3 trillion, and eretail revenues are projected to grow to $5.4 trillion in 2022. Online retail has grown by leaps and bounds during the pandemic, both for retail giants like Amazon as well as for small and medium businesses that were able to make the transition to selling things online. Omniconvert says that even as restrictions are lifted, many consumers will continue to order online because they have become used to the convenience.
The pandemic has also accelerated growth in the online grocery segment, with sales growing 54% in 2020 to reach $95.8 billion. Moreover, online grocery sales are projected to reach $187.7 billion in 2024 as more and more people get used to the convenience compared to buying groceries in person. “In the pre-COVID era, the majority of customers picked out groceries themselves purely because they prefer to physically see groceries before buying and partly because the delivery fee was too expensive,” Omniconvert says. “COVID-19 has altered consumer habits and changed priorities as grocery retailers face the new ecommerce reality.”
Perhaps it’s not surprising, then, that 52% of millennials and 44% of Gen Z consumers prefer online grocery shopping.
Likewise, food delivery has seen substantial growth and is projected to reach about $200 billion in revenue worldwide by 2025. “The utter convenience of ordering your favorite food online and receiving it within minutes has changed the industry dynamics completely,” Omniconvert says. “Even amid the chaos due to [COVID-19], food delivery continued to thrive simply because the service is fundamentally essential and the ecommerce model was already well-established.” And like online shopping, many people who are no longer forced to have food delivered as the pandemic eases will continue to do so because they have become used to the idea and enjoy the convenience.
Rental Products and Services
Finally, the rental market is a significant growth area for ecommerce. For example, the US equipment rental market alone is expected to reach $59.4 billion in 2021, and the global ride-sharing industry is forecasted to grow by more than 50% and reach $117 billion by the end of this year. New rental segments, such as gym equipment, video games, and furniture, are also expected to fuel growth in the rental industry.
Small Businesses Can Enjoy Post-Pandemic Ecommerce Success – if They’re Smart
Shopify’s latest report on the future of ecommerce finds that not all companies are equally positioned to take advantage of the massive shift to online shopping. To thrive in the ecommerce industry that is now experiencing record competition, businesses must take several important steps.
Scale Your Omnichannel Strategy
According to Shopify, the digital customer experience is now “imperative” if companies hope to compete successfully online. This includes, among other things, making shopping interfaces intuitive and easy to use across channels and devices. That’s good news for digital-first brands – many of which are small businesses – because only 38% of the largest companies are able to compete on user experience. By contrast, many smaller companies have been able to pivot directly to digital without rethinking their business model.
To scale your omnichannel strategy:
- Unify customer and product data. Build your business on a single platform that connects workflows and data sources, allows you to manage all your sales channels in one place that integrates with third-party solutions.
- Improve integration flexibility. Use a headless architecture that decouples the front-end customer experience from the back-end technology infrastructure.
Create Innovative Online Shopping Experiences
Shopify’s report says although a major shift to online shopping is likely to persist after the pandemic ends (albeit not to quite the same degree), this will depend in large part on how well companies adapt by providing compelling, fast, and convenient shopping experiences. Some options include:
- Make it fast and easy to buy from anywhere. This includes connecting online and offline shopping so customers can choose where they want to make a purchase. Consider upgrading the checkout experience by enabling one-tap checkouts, allowing customers to buy directly from product pages rather than adding products to a cart, and implementing “buy now, pay later” solutions.
- Automate promotions and shipping costs. For example, offer gifts and discounts tiered for bulk purchases and pre-calculating shipping costs.
- Differentiate your brand. Use augmented reality that simulates in-person shopping, offer livestream shopping events, and convert physical experiences into virtual ones.
Offer Fast, Free, and Sustainable Shipping
According to a Shopify report, 67% of US consumers expect either same-day, next-day, or two-day delivery. Moreover, 72% of global consumers want brands to use sustainable packaging, and many of them are more likely to buy from companies with a reputation for environmental responsibility – even if “environmentally-friendly” products and services cost more. Not only do these expectations present fulfillment challenges, but they have prompted global shipping companies to raise their rates.
To best meet consumers’ shipping demands:
- Outsource your fulfillment operations. Choose a company with a large network of fulfillment centers located where your customers are.
- Automate inventory management. Your inventory management system should accurately forecast demand and use automated, rule-based order routing to match orders with stock in warehouses closest to the customer.
- Streamline the return process. Automate returns to instantly give customers store credit, pre-fill return labels, and support self-serve returns.
- Offer local delivery. This is faster than traditional shipping, provides more work to your retail workers, and gives you full control over the customer experience.
In today’s online shopping world, brands take a back seat to virtual marketplaces as consumers search for solutions rather than specific companies. This makes effective branding both more important and more difficult. On the plus side, virtual marketplaces are one of the fastest ways to find more customers and fulfill orders more efficiently.
To deal with this new reality and come out on top:
- Reevaluate your branding and optimize product pages. Transform your marketplace product pages by replacing generic images and forgettable copy with content that differentiates your brand. In addition, use marketplace and other channel data for insights into how to tailor product pages.
- Make time for human-to-human connection. Automate repetitive, mundane tasks so your employees can spend more time with customers.
- Empower co-created products and experiences. Allow customers to personalize products, design custom packaging, or mix and match custom assortments.
About the Author
An analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in advanced analytics and media.