Young consumers will change the business landscape as e-commerce increases and physical retail transforms, giving local businesses new advantages, according to ‘Future of Commerce 2021’, Shopify’s first annual report that marries global merchant and consumer data. Modern financial solutions will disrupt business and consumer banking, financing and lending.
Consumers want to shop independent and businesses will adapt to make that easier, the report said. More consumers will vote with their wallets.
While the pandemic kick-started a behavioral shift to e-commerce, the highest shift was seen in young consumers. Brands will need to adjust the way they do business to meet new consumer expectations and have staying power. It said.
Eighty four per cent of consumers have shopped online since the pandemic; 65 per cent have shopped in-store; 79 per cent said they will shop online regularly in the next six months; 57 per cent said they will shop regularly in store, the study found.
Sixty seven per cent of younger consumers (18-34) shifted more of their spending to online shopping since the pandemic was declared, compared to the 54 per cent average.
Brands should pay attention to the habits of younger consumers as they lead the shift to e-commerce, it said.
Omni-channel features and experiences that retailers adopted in 2020 will give new life to physical stores and allow businesses to take advantage of proximity to local consumers.
By adapting to consumers’ changing shopping habits, Shopify retail merchants replaced 94 per cent of in-store point of sale (POS) sales lost in the first six weeks of the pandemic with online sales.
Consumers expressed the desire to shop with independent businesses but still purchase from marketplaces for convenience. Independent brands will continue to close the gap.
Half of consumers look for independently owned businesses to support for reasons, including supporting entrepreneurship, buying unique products and experiencing good customer service.
Consumers’ intentions to support independent businesses are not yet reflected in their purchasing habits. However, this may change as 62 per cent of them purchased from marketplaces since the pandemic was declared, while only 55 per cent say they will do so regularly in six months. Fifty seven per cent are willing to shop at new brands or stores for the first time.
Brands must demonstrate authenticity, transparency and accountability as consumers increasingly support local businesses and sustainable products, the report found.
Fifty three per cent of consumers prefer green or sustainable products, while 49 per cent respond positively to retailers making a donation to a cause with each purchase. Twenty three per cent of consumers shop at local or independent retailers to reduce their environmental impact.
Providing options that traditional banks don’t offer, financial solutions that prioritise speed and access to capital, faster ways to pay and more flexible payments like installments are growing in popularity among businesses and consumers.
The quality of the digital user experience is a key factor for merchants: 48 per cent say a ‘good online banking or mobile app experience’ is one of their top three most important features when considering a bank for their business.
More businesses are accessing capital outside of traditional banks: Across the United States, Canada and the United Kingdom, cumulative funding from Shopify Capital reached approximately $1.4 billion at the end of September.
The report is based on an online survey of over 10,000 consumers in 11 countries conducted in September, as well as extensive global Shopify sales data from January 2018 to September 2020
