When the eCommerce Trends 2020 report was being prepared a year ago, nobody had heard about COVID-19. A few months after the report was published, the coronavirus changed the world dramatically. Are the key learnings identified in the report still relevant? As we start work on the 2021 edition, we’re taking a mid-term look to assess how we did last year…
The eCommerce Trends 2020 report is the most comprehensive guide to emerging technologies in the world of online sales. It is based on extensive research, run by Divante and Kantar, canvassing the opinions of over 250 eCommerce experts from eight countries. The report is complemented with trends rankings, implementation examples, and comments from 20 independent experts. It’s free to access and view, without limitations, for anyone who wants to find out more about the future of eCommerce.
A general overview of eCommerce in 2020
Even with four months of the year still remaining, it is fair to say that the global health crisis has driven e-commerce to heights it had never previously reached.
The COVID-19 has boosted eCommerce sales in 2020 and they are up 55% year over year for the first seven months of 2020. That amounts to $434.5 billion in online spending fueled, in part, by many brick-and-mortar stores moving their businesses online to survive while customers were locked out of the high street. As a result, U.S. eCommerce sales will hit about 14.5% of total U.S. retail sales, up from about 11% in 2019. People are changing their habits to buy online more. Even baby boomers were forced to shop online—some for the first time.
The eCommerce Trends 2020 report – is it still relevant?
The top 12 trends driving global commerce, identified in the eCommerce Trends 2020 report, are broken down into three categories: Do it, Quick wins, and Game changers. The highest-ranked trends are Mobile Payments and Social Commerce (top ROI), Security (top investment), and Artificial Intelligence (top impact). Are they still relevant and can help your eCommerce business to grow during the COVID-19 crisis?
Mobile payments
Mobile payments were identified as one of the most critical eCommerce trends in 2020 as companies look for ways to close the mobile gap. Both consumers and retailers are increasingly embracing mobile payments such as app-based or in-app payments.
The COVID-19 pandemic changed the game. Mobile payments are being adopted even faster than we predicted at the beginning of 2020. The cashless world is not science fiction anymore. We no longer need to ask “if” people will stop using cash; the question is “when”.
In March 2020, the World Health Organization published recommendations that people should move to cashless transactions to fight the spread of COVID-19. There were concerns that the coronavirus may be transmitted by cash. Many governments and retailers around the world took action to limit cash transactions wherever possible. Digital payments, including mobile payments, have become the new standard.
“Prior to the outbreak, Worldpay from the FIS’ 2020 Global Payments Report revealed that cash remained the most preferred method of payment for in-store purchases globally, used 30 percent of the time. However, this number is expected to decline to just 19% by 2023. Moreover, the popularity of handling cash at the check-out counter has been steadily declining for some time now, giving way to other forms of payment, including the newer, and the fastest-growing option: digital and mobile wallets.”
Nicole Jass, Mobile Payments Today.
The Global Online Payment Methods 2020 and COVID-19’s Impact report states that digital payment method adoption grew during the COVID-19 outbreak. What is even more important, consumers’ payment behavior is changing.
“Nearly 50% of global shoppers are now using digital payments more than before the pandemic, and the majority plan continues doing so after the virus is contained. E-Wallets and contactless cards are the top payment methods benefitting from this change, as consumers use less cash and make more purchases online. In an international survey cited in the report, close to three-quarters of respondents found that contactless was a cleaner way to pay”.
BusinessWire
Social Commerce
Social Commerce is becoming one of the leading channels of communication between customers and brands. It was also described in the ‘eCommerce Trends 2020’ report as one of the winning trends, with top ROI potential in 2020. This trend continues to grow and evolve as 65% of influencer marketing budgets will increase this year alone. 7% of companies say that they are planning to invest over a million dollars per year in this strategy. By 2021, the global Social Commerce market will increase by about 34%.
According to a bigcommerce.com report, Instagram is the most popular platform for Social Commerce. Over 1 billion people use Instagram every month and 500 million use Instagram Stories. Users spend, on average, about 28 minutes each day on the platform and, importantly, one-third of the most-viewed Stories are from the business domain.
The pandemic hasn’t changed the trend significantly; Social Commerce is continuing to grow and throughout 2020. The average time spent on social media spiked during lockdown months and has then returned to previous levels. Brands are trying to partner with celebrities, as well as micro- and macro-influencers, to use sponsored social media posts.
Security
Security was categorized in the ‘eCommerce Trends 2020’ report as the top Investment trend. The coronavirus pandemic has had a dramatic impact on the situation.
“Cybersecurity technology and service providers are shifting priorities to support current needs: business continuity, remote work, and planning for the transition to the next normal,”
Venky Anant, Jeffrey Caso, and Andreas Schwarz in an article on McKinsey.
McKinsey’s article is an excellent analysis of the current situation regarding cybersecurity during the COVID-19 crisis. The main thoughts are: industries hardest hit by pandemic (retail, energy, travel, transport) expect budgets to drop for cybersecurity spending. Industries like healthcare, banking, fintech, media, and telecommunications plan to increase their spending during the next 12 months.
The analysis also states that “70% of CISOs and security buyers believe budgets will shrink by the end of 2020 but plan to ask for significant increases in 2021”. Altogether, we expect that the security trend will still be significant for eCommerce. Although investments in some industries have decreased, it’s just a temporary change. eCommerce is growing even faster than before the COVID-19 crisis. If security is not deeply ingrained into a company’s vision, organization, and processes, it won’t be able to keep up with the pace and grow.
Artificial Intelligence
Artificial Intelligence (AI) is growing and is even more critical than before COVID-19. Why? eCommerce sales in 2020 are up 55% year over year for the first seven months of the year. Also, when offline retail is back after lockdown, people are still buying more online than predicted before.
New buying habits are being formed. Customers demand smooth shopping and excellent user experiences. Artificial Intelligence can offer algorithm-powered recommendations, personalized services, and offers based on customer behavior. Forbes says that customers spend 48% more when their shopping experience is personalized.
Trends are stronger than any outside factors
The results and key learnings from the ‘eCommerce Trends 2020’ report are still relevant despite how the world has changed due to the COVID-19 crisis. In fact, the crisis has only proven that huge world-changing events have the power to influence our habits on a wider scale but they don’t significantly change the underlying trends in the longer term. The four top trends identified at the beginning of 2020—mobile payments, social commerce, security, and artificial intelligence—are retaining their significance in spite of the crisis.
We are recruiting experts for the next edition of the eCommerce Trends report
The eCommerce Trends Report 2020 was the biggest and most popular edition of our annual state of the industry report to date. It has been downloaded and shared thousands of times by industry professionals.
We are preparing to create the 8th edition of the global report on emerging technologies for online sales: eCommerce Trends 2021.
We are looking for experienced experts who can help us. The minimum criteria to join are:
- 10+ years experience in the eCommerce industry
- Operating on a global market
- A network over 5000 people
- Experience in implementing innovative solutions
The post The eCommerce Trends 2020. Mid-term report card. appeared first on Divante.com Blog.
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