The Top 10 Retail Trends of 2021

Florian Sasse
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E-commerce is Top of the List

It comes as no surprise that e-commerce is one of the key retail trends of 2021.

According to data from Statista, online B2C sales in Germany doubled in the period between 2014 and 2020, rising from 35.6 billion euros to 72.8 billion euros. On a global scale, Shopify estimates that online sales generated US $4.89 trillion in 2020 and are expected to reach US $6.39 trillion by 2024. In terms of their market share of global retail sales, online sales climbed from 13.6 percent in 2019 to 18 percent in 2020; by 2024, this number will likely be 21.8 percent.

In a previous article, Inge de Bleeker argues that the widespread adoption of e-commerce is here to stay following the COVID-19 pandemic. Which other trends are set to shape the future? Here’s an overview.

Ones to Watch

From novel technologies to changing consumer attitudes, Applause has selected the top 10 retail trends of 2021.

1. Omnichannel

In order to continue to provide customers with a secure shopping experience during the pandemic, many retailers started to provide omnichannel offerings. Click-and-collect services, for example, enabled customers to purchase products online and pick them up in-store for free. According to an Applause survey conducted last November, 71 percent of respondents said they would shop at merchants that offered an omnichannel experience. Find out here how suppliers can avoid stumbling blocks in omnichannel retail.

2. Social commerce

Given that Gen Z consumers spend several hours a day on social media, selling products via platforms such as Instagram is becoming increasingly advantageous. A key benefit is that product ads closely resemble organic content, making them more engaging for consumers. Social commerce also shortens customer journeys, as customers can complete their purchases directly on the platform without being redirected to an online store.

3. Big data drives personalisation

Ordinary data rarely provides a solid foundation for personalisation. In order to capture all visitor data and divide customers into comparable subgroup segments, retailers are turning to a practice known as clustering. Multidimensional analysis divides the entire customer base into smaller clusters with similar characteristics such as device, frequency of support requests, or shopping cart value. This enables retailers to maximise personalisation in the customer journey.

4. Augmented reality (AR)

According to a Google survey, 66 percent of consumers are interested in using AR whilst shopping. The advantages for retailers are considerable. 3D visualisations, product demos and virtual try-ons mean that customers can trial items before making a purchase, thereby dramatically reducing returns rates for retailers. Moreover, data from Shopify shows that employing AR can boost conversion rates by 94 percent.

5. Direct-to-Consumer (DTC)

With a DTC channel, companies can sell their products or services directly to consumers, eliminating the need for intermediaries. The most obvious benefits are higher speed to market, more favorable prices, higher margins, and the ability to rapidly identify and respond to customer needs. In the United States, DTC sales grew 45.5 percent from 2019 to 2020, with a growth of 15.9 percent expected this year as well, according to a report by eMarketer. Read more about why brands are investing in DTC here.

6. AI focus

On many retail websites, products are already suggested based on previously viewed or purchased items. With AI technology, personalisation can be improved even further, enabling landing page text and product descriptions to be updated in real time based on customer needs. AI can also benefit online store navigation and shorten customer journeys by creating personalised shortcuts, e.g. by displaying women’s, unisex or men’s clothing first depending on the consumer's gender identity.

7. Livestream e-commerce

A list of top retail trends in 2021 wouldn’t be complete without an exclusively pandemic-driven trend. Livestream shopping enables customer representatives to interact live with prospective customers, so that they may respond to and execute customer requests more efficiently. China leads the way in this trend, with Chinese livestream ecommerce estimated at around US $158 billion in 2020 according to a report by Dao Insights. In Europe, retailers like Dior already present their products on TikTok.

8. Voice commerce

As Applause has seen first hand, voice commerce is one of the key retail trends of 2021. The term refers to online sales facilitated by speech recognition technology. In Germany, 60 percent of consumers have already operated one or more devices using voice control, according to data from Statista. Even if they don’t use it, 92 percent of those surveyed are familiar with Amazon's Alexa. Given the increasing popularity of voice for online search, retailers would be well advised to integrate voice recognition technology into all digital touchpoints.

9. Recommerce

So-called recommerce or reverse commerce involves the selling of used products both online and offline. eBay published its first Recommerce Report this year, having surveyed over 4,000 buyers and sellers in Germany, France, the UK, Canada and the US. In the survey, 79 percent of German consumers stated that they had bought used products on eBay in the past year. In addition to lower prices, the sustainability aspect of recommerce is a key driver of adoption.

10. Sustainability

Following on from #9, a key retail trend in 2021 is sustainability. According to a survey by Box Inc, 46 percent of consumers believe that e-commerce is not a sustainable way to shop. 73 percent believe that the high returns rate proper to online retail renders it not sustainable, while 49 percent identify transportation and shipping as unconducive to sustainable practice. Offering options for environmentally-friendly shipping and sustainable packaging is becoming increasingly important for online retailers.

Looking to the future

The retail trends of 2021 explored above all find themselves at various stages of development. Which trends will permanently shape the future remains an open question. This much is certain: e-commerce will continue to grow rapidly in the near future.

Applause works with retailers worldwide to ensure their digital experiences are exceptional. Find out more here.


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