The Top 6 Ecommerce Trends in 2020

Amanda Mulquiney-Birbeck
Amanda Mulquiney-BirbeckDigital Marketing Manager
11 Dec 2019

 

We've rounded-up our predictions for the top 6 Ecommerce trends to watch out for in 2020. Each trend should be analysed and considered if it's going to make a demonstrable difference to your online growth.

In a rush?

Click on our list of the 6 top Ecommerce trends for 2020 and beyond:

  1. Eco-Minded “Re-Commerce”

  2. Order Fulfilment for the “I want it now” Consumer
  3. The Rise in Direct-to-Consumer Ecommerce

  4. Ecommerce Shift to “Bricks n’ Clicks”
  5. Personalisation and Dynamic Promotions

  6. Drone Delivery

 

Ecommerce Trend #1: Eco-Minded “Re-Commerce”

Environmental awareness has become a top retail trend in 2019 and is set to do the same in 2020. Thanks to increased media coverage and a more informed younger generation Y. These millennials care about vastly different issues and respond to different sets of marketing messages than their predecessors. They are more concerned about the environmental impact of consumerism and the overall impact of the supply chain.

In 2020, we predict that there will be a rise in “Recycled Commerce” or “Re-Commerce” as it has now become known in the industry. In fact, the second-hand online market place has never been bigger. More people are shopping second-hand than ever before – with “a third of consumers buying more second-hand items than they were 12 months ago and more women are happy to rummage through vintage or used items than men.” Marketing Week

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Fuelled by the desire to bag a bargain and reduce carbon footprints -  Thredup claims that the total second-hand apparel market is set to double in 5 years. According to their 2018 Thift Report, resale is growing 24x faster than retail – with the resale sector driving growth from key disruptors such as ThredUp, TheRealReal and Poshmark.

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What to do

  • Demonstrate your Eco-Impact - “77% of millennials prefer to buy from environmentally-conscious brands” and we predict that consumers, in general, will be more inclined to ‘think green’ when it comes to the brands they shop with. It’s clear retailers should demonstrate their green credentials – from a paperless warehouse, recycled or organic packaging, to efficient logistics and electric delivery vehicles.
  • Focus on the ‘Hate to Waste’ Mentality - Whilst choice and convenience are major factors when shopping online – retailers should focus on consumer’s ‘hate to waste’ mentality - making the environmental impact of their products clearly visible to the consumer. This could be information that highlights: Where a product was sourced, durability and estimated lifespan, whether sustainable fabrics and materials were used in the product manufacturing, and indeed whether the packaging is recycled or organic. I can see a time in the not too distant future where many brands have a traffic light system, highlighting the estimated savings in CO2, electricity and water compared to alternatives.
  • Re-sell Returned Goods – If you’re able to sell on goods that can be resold without losing quality, then jump on the ‘resale’ bandwagon. You will, of course, need to weigh up the cost of refurbishment and resale versus the cost to buy new.
  • Be Genuine and Transparent - How much does sustainability fit into your ethos as a company? Are you in a position to re-think the eco-impact of your products? The outcome is likely to have a positive impact on your brand perception, customer experience and bottom line.

Whilst we don’t believe you should become an Eco warrier overnight just because everyone else is. However, it’s clear that the environment is becoming an increasingly important factor - and if it matters to your customers, then it should matter to you.

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Ecommerce Trend #2: Order Fulfilment for the “I want it now” Consumer

Only a few years ago the idea that you could place an order for an item in minutes, and have it delivered the same day or within the hour, was inconceivable. Even the notion of receiving a parcel in a matter of days, without having to pay for the privilege, was incredible. Jump forward to 2019 and there’s nothing remarkable about this situation. It's simply become the ‘norm’.

According to Tamebay, cart abandonment is at an all-time high due to unsatisfactory shipping options. How can retailers keep up - when the bar for what’s ‘acceptable’ is constantly being raised? It’s nigh on impossible to please everyone in terms of shipping costs, delivery time, convenience and choice – and to do so profitably.

What to do

  • Keep your promises - Our #1 tip would be to invest in the best possible back-office solutions to meet your customer promises.

In addition, it's key to address the common causes for abandoned baskets online due to fulfilment options:

  • Additional (or hidden) shipping costs – Display your shipping fees up-front and as early as possible in the buying journey.
  • Poor delivery or returns policies – Make your returns policy crystal clear and easy to find.
  • Overcomplicated checkout – Allow customers to see stages of their checkout process and provide a guest checkout option.
  • Payment processing problems – Provide popular payment options and make your data security a priority.
  • Technical Bugs & Issues – On exiting checkout, provide a pop-up survey to get feedback on their experience. Or even better – offer free shipping on exit-intent pop-up.
  • Reminder Prompts – Send out re-engagement emails (“Pssst… I think you forgot something?) – Reminding the customer what you offer and what they left in their basket linking to a saved checkout page.

The more friction you can remove from the buying journey the better.

Read Next: What Matters Most in Online Delivery

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Ecommerce Trend #3: The Rise in Direct-to-Consumer Ecommerce

If you’ve followed us over the past 6-12 months – we’ve talked A LOT about the growth of DTC Ecommerce. It’s predicted to grow by 71% this year alone to more than 40% of all manufacturers.

In our recent report, “Is there a case for cutting our the middle-man?” we take a look at how manufacturers such as Nike, Glossier, Everlane and Farrow & Ball have used the direct-to-consumer model to thrive in their industries. So, what’s the secret to their success? Download the report here to find out.

As we discuss in the above report, there are heaps of benefits of Direct-to-Consumer Ecommerce:

  • To have complete control over the brand experience from product design, data and post-purchase customer experience.
  • The potential to reach larger audiences and expand market share
  • The ability to build a direct relationship with your customers. If a consumer chooses your product over a competitor on a retailer’s site, you might have won a sale – but you’ve missed the opportunity to connect with your customers directly.
  • The ability to go to market quickly, allowing you to capitalise on trends as and when they come along.

With online sales increasing year-on-year, we expect to see a swathe of brands moving to a DTC Ecommerce business model.

What to do

Are you thinking of widening your revenue with a DTC Ecommerce channel? We’ve got you covered: What to consider if you’re thinking of opening a Direct-to-Consumer Channel

Read this next: Direct to Consumer Ecommerce: Is there a Case for Cutting out the Middle-man?

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Ecommerce Trend #4: Ecommerce Shift to “Bricks n’ Clicks”

In 2020, Pop-up Shops and Experiential Commerce will continue to thrive.

Casualties on the high-street continue to make the headlines - 2019 has seen a record number of store closures – with 1,234 stores disappearing from Britain’s top 500 high streets in 2019. Despite more retailers restructuring and moving more and more services online, there are green shoots of optimism: According to PWC, store openings across the retail sector increased marginally from last year to 4.1%. In reality, this may mean only 1,634 high street store openings (9 per day).

This is a sign that agile, and ambitious retailers are able to thrive in the face of this competitive environment. It also opens-up the possibility for smaller, independent retailers to take advantage of vacant retail space to open pop-up stores. In such spaces, retailers can be much more creative in their approach. Offering new opportunities to engage with consumers in a different way, rather than focusing solely on transaction alone. With more consumers feeling confident to shop online – consumers are looking for much more when they visit a bricks-and-mortar store.

John Lewis have been in the press recently for this exact reason. This year John Lewis’ had their first-ever half-year loss, as such they’ve unveiled plans to replace selling space in the Southampton store with “experience playgrounds” where shoppers can hone their barista and culinary skills or hang out in their rooftop orchard and farm shop. If successful, the revamped store in Southampton will become the prototype for other John Lewis stores around the country.

What to do

  • Go Beyond Transactions - As highlighted above, Ecommerce brands that provide shopping experiences that go beyond mere transaction are the ones that will thrive in 2020 and beyond. For Ecommerce companies, this could mean either:
  • 1. You should capitalise on the opportunities that online brings and invest in taking your Ecommerce operation to the next level. Why enter the traditional retail space when you’re doing well online?
  • 2. Collaborate - If you believe your customers want to interact with your brand in a different way – this may mean setting up pop-up shops or collaborating with suitable partners to create valuable events or experiences.
  • 3. There is a place for "bricks & clicks" to reduce the last mile - According to the UKWA, the pressure on warehousing space is grave - "Warehouses in the UK are currently running at almost full capacity, with little prospect of more space becoming available in the short term". Why not use your retail space as additional distribution hubs? Not only will this reduce the final mile and improve delivery times - it will help to address your green-credentials all at once. 

Read next: 8 signs that you’re about to outgrow your Ecommerce solution

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Source: Retail Week, John Lewis Southampton Store

Ecommerce Trend #5: Personalisation and Dynamic Promotions

It’s probably not news to you, but discounting isn’t a short-cut to success. Discounting started as a short-term boost to help retailers over a temporary dip in sales revenue - and to help clear less desirable stock. It has now become the de facto method of shopping for many – once you know what you are going to buy, a 30-second search on the internet can source you the cheapest possible price for the item.

For those of your working ‘behind the buy button’, you’ll know it’s not as simple as undercutting the competition when it comes to price. Without realising it you’re likely to be cutting into your margins and may be operating at a loss. To discover the true cost to serve and reveal hidden costs affecting your online profit click here.

For established retailers, and those who won’t (or can’t) join the race to the bottom of the pricing abyss, this creates some serious problems.

More businesses are realising the cost of continual discounting and a blinkered obsession with growth-focused KPIs in preference over and above profit and margin-led initiatives. Going down this route, will only de-value your brand overall.

What to do

  • Dynamic Pricing in Context – In 2020, we are going to see more online businesses adopting dynamic pricing software that allows them to monitor competitor prices, demand and said product’s market value. Prevalent in the travel and airline industry, this is an area that we believe established online retailers will look to invest in more widely in the Ecommerce industry.
  • Personalisation and the rise of “me-tail” – As with pricing and promotions, Ecommerce and Marketing professionals who provide a one-size-fits-all approach to pricing, creative and their communication strategy will simply fall by the way-side. Personalisation continues to be high on the agenda for 2020, as “56 per cent of consumers say they would be more inclined to use a retailer if it offered a good personalised experience”, according to Marketing Week. Gartner even predicts a 15% profit boost by 2020 for those who successfully adopt Ecommerce personalisation. Typical areas you’ll need to track include: search term used to find your site, items viewed or added to the basket, purchase history, location and or demographic. You can do all this inside our Enterprise Ecommerce solution – Episerver.

Read next: Why Retailers Can’t Discount their Way to Success

Read next: The Reality of Introducing Personalisation into your Ecommerce business

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Ecommerce Trend #6: Drone Delivery

Whilst still in its infancy, the FAA predicts that there will be 7 million drones in the air by 2020 and that commercial drone sales will reach $2.7 million. In fact, Amazon, USP and Dominos have already invested in the technology. Whilst there are many hurdles and growing pains to overcome. It’s only a matter of time before drones will be delivering to our doorstep.

Okay, so in reality we can't all afford drones. You’re probably focusing your time and money on scaling your Ecommerce business and back office operations. But this development does highlight the fact that packages may be delivered faster than ever before. If this comes to fruition – then it’s imperative your warehouse operations are fit for purpose in order to compete.

What to do

  • Make your back-office operations resilient enough to process shorter order-to-delivery times.
  • Apply warehouse automation to increase picking accuracy and efficiencies and ultimately reduce your next-day delivery ‘cut-off’ time.
  • More reliable inventory management – is your inventory well-organised so that products are easy to find?
  • Carry out performance tests of your Ecommerce and warehouse operations - Is your Ecommerce website robust enough to cope with peak period traffic? Can your warehouse cope with the increase in orders and time to fulfil expectations? We recommend stress testing your platforms and processes with similar spikes in traffic and develop a fall-back plan if it fails.

Forgive me for droning on about delivery, but it really will be the hot topic that separates the wheat from the chaff in 2020.

Discover how our order fulfilment solution can help to reduce your order-to-delivery times here.

Read next: Planning for Peak: Tactics for Black Friday, Cyber Monday and Beyond

Read next: Is Your Warehousing Capacity Suited for The Service Your Customers Expect?

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About Maginus

For retailers – big and small – for whom success depends on growing online, we provide what it takes to sell better online. We do this by delivering class-leading Ecommerce websites that drive online growth and sales fulfilment solutions that facilitate next day delivery and customer service excellence.

We are independent and technology-agnostic but with close partnerships to several leading technology companies so we can always recommend the most appropriate platform for our customers' needs.

With a 20-year heritage in technology implementations, we take pride in helping our customers achieve long term benefits from the solutions we provide. We can do this, because we've done it before, for people just like you.

 

 

 

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