All business owners know that customers’ needs and wants are constantly changing. However, it is the responsibility of these owners to keep up with customer trends, as well as new innovations within the commercial field. Due to the surge in the use of digital technology, as well as the safety and convenience offered by online shopping, this form of shopping has become a sought-after experience for users. The increased desire of customers to shop on virtual platforms, not only opens up a window of opportunity for electronic commerce (EC) businesses and entrepreneurs, but has brought about many new trends and challenges for the upcoming year.
The ever-changing nature of consumer needs, wants and shopping patterns
Over the past few years, there has been a growing trend towards online shopping. The boom in the e-commerce industry was fast-tracked by the COVID-19 pandemic due to its attraction of a safe and convenient shopping experience. A recent study done by Nielsen revealed that 68% of South African consumers decreased their frequency of visiting physical supermarkets, whilst 37% of South African consumers increased their online shopping activity in 2020.
Since customers are starting to change their shopping patterns by migrating to online shopping, new trends can be witnessed with the types of products that customers are buying digitally. Originally, customers used online platforms mainly for fashion, travel or entertainment. However, the scope of goods that are being bought via e-commerce methods is starting to broaden immensely. One example is the purchasing of groceries. The above-mentioned Nielsen study also indicated that online grocery shopping has become a ‘lifeline’ for many South African consumers. In the past, customers generally went to physical shops to purchase such goods, but this is no longer the case. Therefore, online shopping online is no longer limited to only certain product categories.
The possible challenges facing EC Companies
Despite the above statistics that show an increased interest in online shopping, the shift from physical shopping to online retail has been quite slow in South Africa, when compared with other countries. Given that South Africa is a developing nation, EC companies still face some challenges in starting online businesses, which are discussed below.
Firstly, although statistics show that half of the South African population have access to the internet and mobile services, online sales currently account for only 2% of retail purchases. This means that South Africa’s e-commerce market still lags behind the global curve, since, on a worldwide scale, online expenditure accounts for an average of 16% for all retail transactions. Unfortunately, this has resulted in the South African online market remaining largely untapped. However, these statistics are likely to change in the near future, as an increase in online sales is projected (see further below).
Secondly, not all online shoppers have access to digital infrastructure such as a laptop or computer. However, many citizens do possess a smart phone. This means that making purchases on a mobile device has become the most popular means of acquiring goods. Another challenged faced by customers if that of very high data costs, as South Africa has some of the most expensive data costs in the world. This is coupled with the problem of unreliable or inaccessible internet connection.
However, opportunity still exists in terms of these challenges, as a new trend is arising (and discussed below) whereby businesses are now embracing the omnichannel route. The result of this is that digital platforms are merely one of many means of connecting with customers. Furthermore, EC businesses are already starting to be successful. This can be seen in increased injection of investment into online retail, more effective digital marketing strategies and a rapid uptake of new shopping channels like mobile shopping. Due to this progress, it has been estimated that the value of EC transactions in South Africa is expected to increase by 150% to R225 billion by 2025 in response to a noticeable shift in consumer behaviour, as well as changed customer expectations.
Upcoming trends of online shopping in 2021
Despite being aware of the consumer changes explained above, EC companies and individuals starting online businesses need to keep up with the new and upcoming online shopping trends of 2021, which can help businesses overcome the challenges discussed above.
Trend 1: Omnichannel strategies provide a new gateway to reach customers
Have you heard of the term ‘omnichannel e-commerce?’ This is the new buzz word that you need to know! It describes a multi-channel approach to sales that aims to ensure customers receive a seamless shopping experience by offering services across a variety of channels and devices.
Many businesses are taking this route to offer a diversity of sales platforms for their customers. This wide range of channels include traditional channels (for example physically attending shops), digital channels (for example online ordering carts) and point-of-sales. However, it is important for business owners to remember that these channels should work together to create an integrated, and therefore, unified experience for the customers.
Listed below are four steps to achieve a successful omni-channel marketing strategy:
• Fully understand your customers in order for you to be able to put their needs and wants at the forefront, when deciding on the most appropriate channels;
• Identify which tools and solutions will provide the best options to connect with your customers;
• Ensure that your customers feel appreciated by personalising all elements of the omnichannel marketing; and
• Ensure consistency is upheld across all channels.
Trend 2: Catering for different customer needs through voice and other sound-related tools
2021 is also beginning to witness a surge in voice commerce. Many customers, especially those who have very busy schedules, are increasingly relying on voice assistant devices. Instead of having to type out their requests, many customers prefer speaking into their smart technology devices. These voice commerce apps and features are becoming well-known for their higher levels of accuracy and convenience.
Trend 3: Online Retailers are optimising their delivery strategies
One factor that negatively effects the confidence of online shoppers is an unreliable delivery service. Since customers dislike experiencing delays in their orders, e-commerce businesses desire effective delivery strategies that offer speed and a variety of fulfilment options that are aligned with changing customer demands, including blended experiences or local pickup. This has resulted in many retailers choosing automated retail workflow and delivery mechanisms (such as smartlockers) to decrease the time needed to fulfil orders and meet customer expectations regarding convenience. You can also check out our previous article that offers more details about how to overcome delivery challenges for EC.
It is clear that the change of customers’ wants and needs is starting to create new trends within the e-commerce arena. It is important for EC owners and entrepreneurs to be aware of these trends, in order to ensure that such demands are met through their business models. These trends include the embracing of the omni-channel marketing strategy, new voice recognition technologies and more efficient and smarter delivery strategies. However, no industry (especially those within developing nations) exists without certain challenges, and therefore business owners must take cognisance of these issues and devise appropriate strategies to overcome them.