Shopify, a leading global commerce platform, has published its 2021 Future of Commerce Report, providing insight into the most important trends that will shape retail over the next few years following the Covid-19 pandemic, spanning changing consumer behaviours, technology and the rise of social commerce.
Shopify analysed data from more than one million merchants worldwide and collected survey insights from more than 10,000 global consumers in 11 countries. The research has identified three key trends in the UK retail market which the company expects to shape the next decade in commerce:
Consumers are increasingly shifting to shopping local and shopping independent
In response to Covid-19, more and more people want to support local and independent shops. 51% of UK shoppers actively look to support independently owned businesses and 32% have purchased from an independent business either online or instore. Of these consumers, over a third (37%) are doing so more often now since before the pandemic.
We can also expect to see consumers change their relationship with online marketplaces and big-box retailers. 62% of consumers purchased from marketplaces since the pandemic was declared but only 55% say they will do so regularly in six months’ time. The trend is also true for big box retailers with 31% of consumers purchased from a big box retailer in the past 6 months, while only 28% say they will do so regularly in six months’ time.
Young consumers expect much more from brands
The pandemic accelerated a behavioural shift from millennials and Gen Z with 70% of 18 to 34-year olds spending more online as a result of the pandemic compared to earlier this year.
Social media has also become a key driver of brand discovery with more than half (54%) of younger shoppers using social media platforms to find brands and a third (33%) making purchases through social channels. Younger shoppers have also proven far more likely to make purchasing decisions based on factors other than price and convenience, with two in five (63%) preferring to shop for sustainable products compared to 54% of 35 to 54 year olds and 39% of over 55s.
Younger consumers are also increasingly shopping with brands which make a positive social impact, with 30% saying they choose brands that have a positive impact on society. An example of a brand focusing on ethical fashion is Birmingham-based streetwear brand and Shopify merchant Bene Culture used this year’s Black Friday as an opportunity to launch an exclusive product in collaboration with a young local artist, building on their brand ethos of giving emerging creative talent a bigger platform.
Physical retail as we know it will transform
The growing popularity of online shopping is undeniable and will continue to gain a total share of consumer spend in the next few years. Shopify’s research reveals that 51% of consumers who shopped in store during the pandemic say they’re doing this less often than before.
Using technology like contactless payments, in-store shopping appointments and alternative delivery/pick-up options, Shopify’s retail merchants replaced 94% of Point of Sale (POS) revenue lost in the first six weeks of the pandemic with online sales.
In areas such as payments, technology has enabled a transformation. 62% of consumers are now more comfortable making in-store purchases with digital or contactless payment methods. In store and online, reducing friction around obvious pain points like payment and delivery has become a must for brands looking to retain increasingly tech savvy customers.
Shimona Mehta, head of EMEA at Shopify, said: “2020 has been a year like no other. Commerce has been changed irreversibly by the pandemic with trends that were already in train accelerating by a decade, permanently altering the way entrepreneurs start, run, and grow businesses, as well as how consumers choose to shop and pay.
“The Future of Commerce report makes clear that the retail landscape in the UK will continue to evolve at pace. The younger generation of shoppers are more aware and connected than any that have come before them. They expect more from the brands they buy from and want to make choices that have a positive impact on their local communities, the environment and society as a whole.
“Commerce has become so much more than a transaction. It is an interaction between a business and its customers and that will become more and more apparent. Those who fail to adapt will undoubtedly be left behind.”