Trade in 2021 – twilight or revival?
Last year was a difficult time for everyone. For those involved in retail and e-commerce, it was a period of uncertainty, but also of increased sales. The economy is now slowly recovering and factories can produce goods without much concern about labor shortages. In addition to the coronavirus pandemic, national events (not only in Poland) caused social unrest, which also affected most of the sales made in stores. All of these factors have resulted in many store closures, layoffs, or a huge number of companies ceasing to trade altogether.
The decline of traditional retail?
There was a widespread increase in e-commerce sales. While the e-commerce industry benefited from increased sales, retail store owners wondered how to pay their rent.
In recent years, there has been a debate about the future and shape of the retail industry. In 2020, approximately 12,200 stores in the United States closed permanently, resulting in the loss of 168,158 jobs. Not only small and medium-sized businesses were forced to take such drastic steps, but also large retail chains such as Aldo, Gap and JC Penny. It is interesting to note that Stationary store turnover declines and store closures increased long before the outbreak of a pandemic. About 9994 stores closed in the United States in 2019, and more than 7,000 in 2018. One might be tempted to say that these statistics confirm the truth of hypotheses predicting the decline of retail sales in traditional stores. Media reports that Commerce in its classical form has been dying for several years, It can be surmised that the messaging is intended to drive customers to traditional shopping. Assuming the continued growth of the Internet and the development of technology, it is likely that customers will be more willing to shop online. This is also due to the constant changes that streamline the work of retail giants like Amazon, Allegro, eBay.
The past and future of e-commerce
E-commerce has become possible since the Internet became more widely available. For one of of the first online stores was Book Stacks Unlimited. It started in 1992 with message boards and began selling merchandise in 1998. US lingerie retailer Victoria Secret was one of the first retailers to create an online storefront. E-shopping was also accompanied by streaming from fashion shows. Since then, a new way to reach customers has begun. It is predicted that more than 2.14 billion people will make online purchases this year, and worldwide E-commerce sales to reach $6.54 billion by 2022. Experts estimate that by 2040, 95% of all retail purchases are likely to be made online, and geographical boundaries will be completely irrelevant in e-commerce. Already, 2/3 of companies that sell online sell internationally. It can be considered that all thanks to giants like Amazon and eBay. Statistics indicate that platforms such as:
- Alibaba – it is an online store founded in 1999, currently has over 757 million active users per year; the group has 14 separate business entities.
- JD.com – also known as JingDong, launched in 1998 an online store initially under the name 360buy. The platform serves more than 417 million users per year. JD has 650 warehouses in 81 cities in China, bringing their total warehouse space to over 16 million meters.
- Shopify – platform developed in 2004, now has One million merchants worldwide. The site allows you to create your sales channels, offers sellers more than 100 themes, so far paid themes have been used more than 350,000 times, thus saving time and resources for design and configuration. Further personalization is easy with over 3,200 apps supporting SEO and payment systems.
Growth of commerce = growth of payment systems
The proliferation of e-commerce is directly impacting the flourishing of payment systems. UK consumers prefer to use PayPal and credit or debit cards. Over 61.9 million credit cards and 97.3 million debit cards have been issued in the Islands. Wallets digital and mobile payments have not yet gained significant popularity among English consumers. Google Pay and Apple Pay are used by less than 3% of users. However, experts predict a radical change – 92% of UK millennials indicate that they will start using such payment methods in the next three years. Mobile payments are growing mainly thanks to Chinese consumers, where they are used by more than 81% of smartphone users. The largest mobile payment platforms around the world are:
- Alipay (over 1.2 billion active users)
- WeChat (over 1.1 billion active users)
- Apple Pay (over 441 million active users)
- PayPal (over 305 million active users)
- Samsung Pay (over 51 million active users)
In the Old Continent, PayPal, Alipay, WeChat Pay, Union Pay are preferred by 80% of consumers, and the countries with the highest use of mobile payment technologies are Denmark and Sweden.
E-commerce and social media
The relationship between these mechanisms emerged when online stores started using social media to promote their products and brands.
Soon, new media managers realized that this type of channel has a high potential for making money. A study by Facebook found that 83% of people use Instagram when they search for new products and services, and 81% actively use social media to search for store recommendations. Posts published in these channels for 80% of users are helpful in making purchase decisions. The boundaries between social media and e-commerce are becoming increasingly blurred, no wonder a new term for this type of shopping has emerged in the US market – social commerce.
Shopping trends in 2021
During 10. edit Mobile Trends Conference It has been said that where consumers leave their money, trends are born. Despite the difficulties we faced in 2020, they have allowed new trends to be born and this has changed the approach to commercial activity. Here are two predictions that may accompany retailers over the next 18 months.
- Focus on the customer – it may seem quite obvious. In the case of retail, the customer is the most important thing, but in the case of online stores, the goal is to get as many sales as possible. However, this was sometimes detrimental to the consumer experience, as customers often did not receive the same level of service across platforms. This led to numerous complaints and claims being made, and recommendation portals were overflowing with negative comments on some stores’ service.
- Commitment to ethical action – Not only are customers much more consciously choosing the products they buy, but they are also more carefully deciding which companies they are willing to buy from. They are more likely to shop at local businesses they know and trust, or more likely to look for vendors who act ethically. Consumers have recently started to pay attention not only to the quality of the product, but also to the packaging, whether, for example, it is biodegradable, and whether the production and logistics chain is free of slave labor. Transparency of operations and openness to dialogue with customers can increase transactions with consumers who want to act in a more socially conscious way.
It has not been known for a long time that the strong growth of the e-commerce industry is directly proportional to the demands of consumers. E-commerce market boosts global economy and develops the mobile industry. Because of pandemic-related restrictions, More and more Internet users are shopping online. The e-grocery market has grown in the last year. Undoubtedly, the reason for the spread of this trend was the non-trading Sundays. The coming time will bring many changes and innovations, and retailers will have to strive for the customer even more than before.