Every year, I identify over fifty mostly technical trends that are impacting eCommerce. After narrowing the list down and removing very obvious trends or those that have remained the same for many years (e.g., move to mobile, increased personalization, AI, social commerce), the final list favors trends that are immediately useful and actionable for a typical merchant or those interested in eCommerce. For each of these 2021 eCommerce trends, we will clarify:
- What the trend is
- The metrics behind the trend
- The risks or downsides of the trend
Read on for an in-depth look into each of the top eCommerce trends for 2021. In addition, this year we included a list of the top trends we feel are overhyped.
eCommerce Trend #1: Re-Normalization of eCommerce
2020 was a unique year, and eCommerce growth rates exploded as traditional offline channels were not a readily available option for many consumers. At the height of the pandemic in 2020, 10 years of eCommerce growth happened in just 90 days in the U.S. 2021 will certainly not see the same year-over-year growth in eCommerce that 2020 did. However, the rapid need for consumers to shift more purchasing to eCommerce channels should result in more comfort and preference for online vs. offline purchases in the future—and much of the shift to online will not subside when the world gets back to normal.
Metrics
2020 eCommerce sales have grown 40.3% to reach $839.02 billion USD in sales. This compares to an originally forecasted 13.2% for 2020.
Although not as robust growth, global eCommerce has grown 27.6% to reach $4.280 trillion USD for 2020. This compares to an originally forecasted 19% growth for 2020.
2021 and beyond will likely see eCommerce growth rates go back to the projected norms of 15–20% of annual growth—but 2020 created a new higher baseline for this growth.
Risks
The 2020 pandemic rapidly increased the growth of eCommerce, and as normalcy is reached, the risk is that eCommerce may be shunned as consumers prefer the renewed experience of safely shopping in-person. The desire for the in-person interaction may overwhelm the newfound comfortability and preference of eCommerce.
eCommerce Trend #2: Expansion to International Markets
2021 will be the year that cross-border eCommerce and the expansion of eCommerce brands beyond their home countries starts rapidly accelerating. Why? Because the ease of doing so is multitudes greater now than it was only a couple years ago. Language, payments, localization, logistics, distribution, and shipping obstacles are no longer technical constraints. Accepting orders from a new country once took many months to set up, but now—with even basic eCommerce platforms and some outsourcing—this can be done within a week’s time. In addition, many of the fastest growing eCommerce opportunities are in emerging countries, which may not have all the internal product categories and brands desired. This is opening the door to sellers outside their borders.
Metrics
Global cross-border B2C eCommerce will reach $4,820 Billion USD by 2026, comprising 12.2% of the total global eCommerce market expected in 2026. I expect this figure will turn out to be an underestimation as cross-border sales increase faster than currently anticipated.
Risks
The traditional non-technical barriers to cross-border transactions will not be going away anytime soon. Jurisdiction constraints, legal hurdles, tariffs, and taxes are all barriers to entry and decrease margin in international markets.
eCommerce Trend #3: Integration of Blockchain and Cryptocurrencies
Although the application and benefit of blockchain and cryptocurrencies can be separated, for the summary purposes here we are going to put these in the same bucket.
With blockchain technology already becoming its own distinct platform that’s being incorporated in more and more everyday transaction activities, we will see many B2C eCommerce implementations have integrations into public/private blockchains. Blockchains for supply chain, tracking shipments, and content management have already become commonplace. With many more direct blockchain integrations to come, many traditional solutions and markets are going to be disrupted or displaced.
Furthermore, as legal jurisdictions allow them, cryptocurrencies will become a more and more common payment type. In many countries, we are already seeing cryptocurrencies being used for majority of online payments. In 2020, we have seen PayPal/Venmo enable cryptocurrencies for payments and several crypto-based credit cards being announced.
Metrics
$2.7 billion was spent worldwide on business blockchain solutions in 2019.
Because of blockchain’s incredible integration potential (supply chain, payments, inventory, product data, and security being some of the top areas), 53% of global businesses say blockchain was a top 5 priority for 2020.
Many of the largest retail brands accept cryptocurrency for eCommerce payment, including the likes of Microsoft and AT&T. Although there are currently no trusted metrics out yet for the expected percentage of eCommerce transactions that will be completed via crypto, it will definitely be in the multiple billions of dollars USD.
Risks
Blockchain technologies (including cryptocurrencies) are still often considered the “wild west.” There are thousands of potential blockchain projects companies can undertake—and selecting the right technology and application for your business involves some serious due diligence. Also, governments are equal parts fascinated and terrified of blockchain technologies and cryptocurrencies, resulting in many legal and regulatory restrictions to navigate through in most countries.
eCommerce Trend #4: Focus on B2B Channels
2021 will see B2B return to faster growth than B2C. Also, B2B is moving downstream where it can now apply to buyer groups and small organizations and not only to traditional larger business consumers. I am amazed how even the heaviest B2C merchants also have a B2B eCommerce channel. Going forward, every major B2C merchant will need a B2B eCommerce strategy.
Metrics
The global B2B eCommerce market is estimated to reach $20.9 trillion by 2027—and Forrester predicts that by 2023, U.S.-only B2B eCommerce will hit $1.8 trillion. Signs are clear that businesses are the dominant eCommerce customer and should be a focus for any products that can be sold B2B.
Risks
B2B eCommerce sites and technologies are often more complex than B2C sites. ROI on implementations and costs of B2B platforms may be harder to achieve than B2C.
eCommerce Trend #5: Expansion to the Mesh Omnichannel
2020 saw the hurried expansion of merchants into additional channels beyond basic eCommerce. New terms have now become common vernacular in eCommerce discussions, adding to the complexity of what a “channel” is:
- Buy Online, Pick Up in Store (BOPIS)
- Buy Online, Return in Store (BORIS)
- Research Online, Purchase Offline (ROPO)
- Browse In-Store, on Mobile, Buy Online (BIMBO)
- Voice Commerce (vCommerce)
- Virtual Commerce (also called vCommerce)
- Shoppable Video
- Pickup Lockboxes
Furthermore, completing an eCommerce transaction for a product directly through a social media platform, affiliate site, voice interaction, or product finder website will become commonplace in 2021. And with these additional channels, tracking a customer across several channels is imperative. Thankfully, the technology to do so is becoming readily available.
Metrics
15 years ago, the average consumer only needed two touch points when buying a product; now the average is six. This will only increase at an exponential pace as the availability of additional channels and information-sharing touchpoints increase.
Risks
Omnichannel requires eCommerce organizations to become quite familiar with their end-to-end customer journeys and have consistent data typologies, as well as excellent reporting and data intelligence, to benefit from the mesh omnichannel.
eCommerce Trend #6: Voice Commerce Becomes a Primary Channel
Today in your kitchen, if you realize you are running low on milk or need to buy a replacement toaster, you can order those items with a simple command on your voice assistant—a possibility enabled only recently by developments in the field of voice commerce. You can also order takeout while you are at it, without ever having to touch a single screen. It saves a lot of time and can make the ordering process much easier.
As more and more households adopt this technology and grow more comfortable using it to make purchases, there is a lot of untapped potential for eCommerce businesses looking to add in voice commerce. Whether consumers are using Alexa, Google Home, Siri—or even the hands-free system in their car—each platform has or will shortly have product ordering capability.
Metrics
75% of U.S. households will own a smart speaker by 2025. People are increasingly relying on voice assistants like Google Assistant or Amazon Alexa to do everything from checking the weather to buying products online.
Risks
Although voice recognition has gotten better over the years, there is still some room for improvement and instances where some voice orders are not translated properly. Also, consumers may be concerned that they are not getting the best price for a product when they cannot easily comparison shop via voice.
eCommerce Trend #7: The New Visual Commerce
Traditionally, visual commerce has been taking the “normal” visuals that people expect when they visit an online store and making them a little better. However, in 2021 the definition of what visual commerce is will change. With the advent of easier visual machine learning (or computer vision) and augmented reality (AR), we will see interaction with the visual world become another popular and exciting eCommerce engagement channel.
Need to order a product? Just put it in front of a phone camera, and it will be delivered tomorrow. Need to find a part for a broken home appliance? Take a picture of the appliance and see an overlaid part list ready to order. And virtual try-ons already started to gain popularity in 2020. Visual machine learning is advancing so quickly, and the applications are endless. Simply feed a machine learning tool enough image examples, and it will decipher almost any visual image or product—making the implementation many times easier than only a short while ago.
Metrics
It is estimated that 100M consumers will have used AR to shop in 2020. And the global visual machine learning market is expected to reach $17.9 billion by 2026, increasing at a 10.1% annual growth rate. There is no doubt that the visual commerce engagement channel will start to accelerate in 2021.
Risks
More advanced delivery and perfection of visual commerce continues to be difficult to implement. While the back-end tools to create the data and mechanisms for visual commerce have seen major advancements, the front-end tools are only very recently becoming available to ease the difficulty in the deployment of the corresponding customer engagement layer.
eCommerce Trend #8: The Rise of Amazon Brands and Competitors
Amazon currently owns over 100 private label brands they fully control, market, price, and sell on amazon.com. Over the last couple years, their number of private label brands has been increasing exponentially. It is extremely difficult to compete in product categories in which these brands exist. Also, if you have a product selling on Amazon—despite what Amazon implies publicly—you ARE giving all of your product and customer analytics to Amazon to help them create their next brand to overtake yours.
However, 2021 will see the rise of the first true Amazon competitors. A few companies are getting close to the complex logistics, customer service, and navigation that Amazon excels at. In 2021, we will start to see Shopify, Walmart, Target, Google, and cross-border international competitors decrease Amazon’s eCommerce market share in the U.S. As eCommerce marketplace competition has risen, utilizing these new channels has almost become a requirement for eCommerce success.
Metrics
In a survey in late 2020, 73% of merchants said they are concerned with Amazon’s private label products competing with their own. The chance of helping a new competitor should be weighed when listing any products on Amazon or on any of the eCommerce marketplaces.
Already, half of all global eCommerce sales occur on marketplaces, and the sheer volume compels brands to participate. But with the newer marketplaces gaining some market share, it will allow for diversification and better choice of terms to help control your product and customer data.
Risks
The risks to the trend are two-fold: antitrust regulation could put a stop to marketplaces using merchant data; and failure and acquisitions could occur that would slow down the Amazon competitors.
eCommerce Trends That Are OVERHYPED for 2021
After our dive into the big trends for 2021, it is also important to point out the following trends that will be heavily discussed this year but will not have the significant impact or acceleration on eCommerce that many are promoting:
Expansion of Mobile 5G
Bandwidth and latency are improved to varying degrees over 4G and coverage is quickly expanding. However, many of the benefits will not be realized in 2021, and users will not see a different experience on 5G vs 4G mobile commerce. Studies have shown that users are currently not realizing much of a difference when on 5G vs. 4G.
Virtual Reality (VR) eCommerce Becomes a Primary Channel
Although VR continued to gain in popularity in 2020, we still have not seen much success in eCommerce transactions or applications within VR. Although some new experiences are planned for these environments, we will not see significant transaction volume in 2021. Note that VR should not be confused with augmented reality (AR), which is one of the hot trends for 2021 noted above.
Antitrust Against Big eCommerce Players
Despite a push for antitrust actions against large tech companies in late 2020, the large eCommerce players have not been a focus. Though there was some talk of an Amazon breakup in 2020, it largely fell off the radar as other antitrust cases against big tech companies took the spotlight.
Impact of Privacy and Data Regulation
2021 will see a lot more talk about consumer personal privacy and data regulation, but there is no indication anything significant will occur that will have an impact from a legal or behavioral standpoint.
Want to Learn More?
This article was based on a “eCommerce Trends for 2021” presentation given to several companies, vendors, and organizations in early 2021. If you are interested in having this presented to your organization or need more information on these 2021 eCommerce trends, please do not hesitate to contact me on LinkedIn.
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