There is no denying that COVID-19 has dramatically impacted ecommerce, with increased sales seen across markets and sectors. In the UK alone, we’ve seen retailers quickly respond to increased ecommerce demand: retailers that have historically avoided ecommerce have begun to enter the space through direct models and partnerships, while established ecommerce players have rapidly expanded their capacity.
Even if the current spike in ecommerce demand falls as restrictions ease, it seems likely that an increased uptake of ecommerce will be a sticky habit for many customers. In the first article in this series charting the lasting impacts of COVID-19 on retail, we called out a sustained uptake in ecommerce as one of the key shifts initiated by COVID-19 that we think will continue to play out in the future.
But the future of ecommerce is not simply a matter of increased volume. If ecommerce sales just experienced 4–6 years worth of growth, it stands to reason that the nature of ecommerce itself will also evolve rapidly following COVID-19. Many of the emerging models and trends that we’ve been talking about in ecommerce may arrive at our doorstep sooner than previously anticipated. In this article, we explore some of these emerging ecommerce trends and how they might evolve in the next few years.
Online social networks play an undeniable role in many customers’ ecommerce journeys. Retailers have long understood the importance of social networks for product and brand discovery, as well as customer service, but in years to come social channels will play an increasing role in the critical purchase stage of the ecommerce journey. In May 2020, Facebook announced the roll out of Facebook Shops, a feature which enables users to place orders without leaving the Facebook app, and we anticipate that other social networks will explore building out ecommerce features in the coming years. While online social networks are building up their ecommerce capabilities, we also expect to see retailers applying learnings from social networks. As the communal aspects of in-store shopping continue to be impacted by COVID-19, there’s an opportunity for ecommerce brands to create new social shopping experiences online. We may see the global emergence of more shopping platforms like China’s Pinuoduo, which puts sharing and group buying at the centre of the experience.
Virtual consultations and events
‘Virtual service’ has developed significantly in recent years, moving beyond foundational live chat support. COVID-19 has prompted many retailers to migrate in-store services which rely on one-to-one interaction online: UK department store John Lewis moved everything from nursery advice to home styling sessions online in response to the COVID-19 crisis, while US beauty brand Glossier’s video chat sessions with team members were rapidly booked up. Again, this is an example of how the limitations on store shopping may offer up opportunities for ecommerce to evolve; for years the idea of ‘experiential retail’ has been focused on the in-store experience, but this may change in a post COVID-19 world. New forms of ‘experiential ecommerce’ will emerge, likely starting with the movement of traditional in-store experiences and events online, and over time novel online-only experiences will give shoppers reasons to shop online, beyond the practical benefits.
At the intersection of social shopping and virtual events is live streaming ecommerce, a popular tool in China that’s yet to gain significant traction in many other markets. Live streaming is an interactive video-based experience that happens in real time. For example, through Alibaba’s Taobao Live, users can watch video demonstrations and shop the featured products seamlessly, without leaving the app or interrupting their viewing experience. Live streaming offers customers a unique ecommerce experience through which customers are able to participate in a communal experience alongside other shoppers, interact and ask questions about products, and be immersed in the overall shopping experience. All of these factors drive ecommerce conversion, and since COVID-19 struck more and more brands have taken up live streaming. In the coming years, we anticipate that live streaming will take root in new countries and sectors, as brands look for ways to connect with their customers and drive online conversion.
As customers shift more and more towards ecommerce they will likely notice that most of the websites and apps they’re using look the same. The current uniformity of ecommerce design is partly driven by practicality for both the user and the business. For the user, a familiar set of interactions and layouts makes it easier to adapt to new ecommerce channels. For the business it is often more straightforward to rely on ‘tried and tested’ formats than experiment with novel designs; the limitations of monolithic ecommerce platforms have further exacerbated this reluctance to create novel experiences. The homogeneity of these websites and apps is a consequence of the ‘functional-first’ approach that has pervaded ecommerce in the past. However, as in-store shopping becomes less common, we anticipate that retailers will begin to offer more ‘experiential ecommerce’, and explore the way their ecommerce channels can more meaningfully express their brand and act as a channel for connecting with customers beyond the point of purchase. We’ve already seen websites like Yeezy Supply abandon the traditional ‘rules’ of ecommerce design in favour of a more expressive and immersive experience, and we expect to see more retailers follow suit.
Beyond the screen
Taking the ‘radical interfaces’ trend a step further, a number of retailers have explored ecommerce experiences which abandon the screen as the default interface for online shopping. Whether it’s voice-based search or automatic ordering through connected devices, there are more and more opportunities to shop without staring at a mobile phone or laptop. We expect to see these ecommerce interfaces proliferate further, particularly voice which will be driven by the continued investment of major technology companies like Amazon, Google and Alibaba. In the longer term, we’re also excited to see whether less common interface technologies like haptics and gestural control might evolve the screen experience or replace it entirely.
Emerging digital tools
One of the factors that historically limited ecommerce uptake is shoppers’ interest in seeing or experiencing items in person before committing to purchase. A number of emerging digital tools may help to solve this customer concern. Fashion ecommerce players have long tried to help customers overcome the barrier of wanting to see how clothes look on them before buying. In May 2020, ASOS scaled up their use of AR technology which maps clothes onto different models “in a realistic way, taking account of the size, cut and fit of each garment”. This tool allows ASOS to reduce in-person contact between models and staff, whilst also enabling customers to get a better sense of how items might look on someone like them. This is one of many examples of how augmented reality tools have evolved beyond fun experiences and towards practical retail applications. In the future, we expect that augmented reality will be used by more retailers, particularly in sectors like furniture and clothing where seeing an item in context (e.g. in the home or on a person) is critical to the purchase decision. Virtual reality experiences that replicate or replace the immersive in-store experience may also emerge.
If the COVID-19 boom in ecommerce was driven by concerns around physical distancing, then now may be the time for the ultimate in ‘contact free’ shopping to take centre stage: virtual goods. Digital fashion is a key area of growth within the virtual goods sector. Recently, European streetwear brand Rohbau released a digital hoodie: customers pay 40 Euros and receive an image of the hoodie rendered onto their personal picture. Rohbau are one of a number of brands with aspirations to grow their digital fashion lines, and we expect that more digital-only fashion lines and brands will emerge in the coming years. If some level of social distancing measures remain in place over the long term, consumers’ lives will increasingly shift online; in this new world, ‘dressing’ a consumer’s online self emerges as a new revenue stream opportunity.
As a digital retail agency, This Place has seen first-hand the impact the pandemic has had on our global clients. We’re currently conducting research with retail and digital leaders to understand how they’re responding to the ongoing situation. We will release a report with our key findings in the coming weeks; if you’re interested in getting access to the report, get in touch with firstname.lastname@example.org.