Last week, my colleague Neal Polachek shared and reflected on a set of 2021 customer experience related predictions from CX guru Shep Hyken.
Today we’ll take a look at the eCommerce DIY platform Shopify’s Future of Commerce 2021 report. The report shares five key predictions for commerce in 2021. We’ll summarize and offer our take on each.
The Shopify report begins by stating the obvious.
“There’s a shift happening in the world of commerce, and we’ve all felt it. 2020 has accelerated the industry by a decade, permanently altering the way entrepreneurs start, run, and grow businesses, as well as how consumers choose to shop and pay. We’re on the brink of a new era of commerce.”
So here it goes with Shopify’s five data-supported trends.
No. 1: ‘Young consumers will change the business landscape as eCommerce changes ahead’
“The pandemic kick-started a behavioral shift to ecommerce that young consumers will continue to drive forward. Brands need to strengthen their omnichannel strategies, invest in their social media presence, and demonstrate authenticity to have staying power.”
Of course, the basic point here is hard to dispute. We’ve long observed that small businesses change their behavior well after consumers change theirs. And the Shopify report shows that the across the board acceleration toward eCommerce was more pronounced (big surprise) among younger consumers.
Our view is that we may see some backsliding in eCommerce adoption among small businesses once the pandemic is in the rearview mirror. Some SMBs just won’t see a bump from eCommerce and will direct their attention elsewhere. But adoption will still reflect a major acceleration from pre-pandemic levels.
Prediction 2: ‘Physical retail as we know it will transform, giving local businesses new advantages’
“Omnichannel features and experiences will give new life to physical stores and allow businesses to take advantage of proximity to local consumers.”
So all of the evidence, in surveys and our own anecdotal observations, shows that omnichannel experiences made necessary by the pandemic have taken permanent root. These range from curbside pickup to local delivery. Shopify is presenting this as an opportunity for businesses to serve a wider market. And we agree. Once the pandemic fades, there will be a sharp divide between businesses that have embedded omnichannel into their operations and those who have not. Which would you bet on for long-term survival?
Prediction 3: ‘Consumers want to shop independent. Businesses will adapt to make that easier’
“Consumers expressed the desire to shop with independent businesses but still purchase from marketplaces for convenience. Independent brands that improve their discoverability and fulfillment capabilities are poised to succeed.”
Shopify contends that consumers aspire to buy from local independent businesses. But they prefer the convenience of shopping at online marketplaces like Amazon. Shopify doesn’t mention Amazon of course. Shopify’s prescription, for SMBs to improve discoverability and local fulfillment is on point. It’s also a little self-serving.
Prediction 4: ‘More consumers will vote with their wallets’
“Brands must demonstrate authenticity, transparency, and accountability as consumers increasingly support local businesses and sustainable products.”
Shopify’s point here is more specifically about signaling social responsibility. To the degree that this conveys a commitment to local communities, we agree that this will take on greater importance.
Prediction 5: ‘Traditional financial institutions do not empathize with the current realities of entrepreneurs and small businesses.’
“Speed and access to capital, faster ways to pay with digital wallets, and more flexible payments like installments will grow in popularity.”
So the fintech market has recognized this gap for a while. Innovative companies like Kabbage (now under Amex), Fundbox, and others have filled the liquidity void traditional banks have created for small business owners. Square and Shopify have always been well-positioned here. After all, they sit right on top of the SMB income stream.
The installments piece is interesting. There is a growing ecosystem of fintech designed around younger consumers’ preference for debit transactions. Allowing them to make purchases over, say, four installments, versus slapping it on a high-interest credit card, has considerable appeal. One example of this movement is Afterpay.