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What to expect from eCommerce in 2021
By Ken Doyle, CEO, Luzern
For modern brands, 2020 has been a year unlike any other. No one could have predicted the Covid-19 pandemic, and the resulting business consequences. As more consumers eschew the high street in favour of shopping online, the ramifications for digital commerce are significant.
I
t should come as no surprise that the number of consumers ‘showrooming’
(when consumers check out products in physical stores then go online to make the purchase) has plummeted, while online browsing continues to reach record levels. This behaviour is set to continue, whether for safety reasons, convenience, a wider variety of options, price comparison visibility, or customer reviews. In fact, according to the Capgemini Research Institute, consumer appetite for online shopping and convenience will only continue to grow beyond Covid-19. Fifty-nine per cent of consumers worldwide had high levels of interaction with physical stores before the pandemic, but now only 24 per cent expect to return to that level.
Amazon will continue to grow… and dominate It is expected that Amazon will continue to be the battleground for brands. In the past, many brands were hesitant to have their products on Amazon, preferring to drive consumers to their own branded online store. This is rapidly changing as brands realise the need to be on Amazon to meet their buyers in their marketplace of choice.
homeofdirectcommerce.com | Direct Commerce
Like every other business, Amazon was unprepared for Covid-19, however it will continue to benefit from the surge in online shopping into 2021 and beyond. For brands to benefit from the same growth, they need to optimise their offerings on what will become an increasingly important sales channel. In addition, as Amazon tightens certain aspects of their service, such as customer-seller messages and product reviews, brands will need a solid strategy to overcome these obstacles. The shift in buyer behaviour and the transferal to online shopping is driving brands to update their Amazon sales strategies, and upscale their digital commerce operations.
Brands to tackle tighter price margins As brands seek to increase sales via online marketplaces, in particular Amazon, they could find themselves facing extraordinary margin pressure when selling directly. Amazon will, of course, seek to maximise their margins and push what is selling best. This will have a trickle-down effect, as they will inform brands that better prices are needed, otherwise they will stop ordering some, or all, of their products. For the brand, this could equate to millions in lost revenue.
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