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The Year of Seamless Shopping: 10 Retail Trends for 2021
 — January 7, 2021

This month on Heyday’s C-Suite Conversation Series is our very own co-founder and Chief Marketing Officer—Étienne Mérineau. In 2018, he nabbed a spot on Forbes 30 Under 30 Marketing and Advertising, adding yet another feather to his cap as he has won more than 55 advertising awards in his career.

After keenly following the growth of the ecommerce industry and working with top retailers in the past decade, he shares his take on what lies in the offing for ecommerce in 2021.

The last decade saw the fall of a few retail titans—Sears, Payless, Walgreens and counting. However, more glorious days seem on the horizon as we enter an age of a tech-powered retail renaissance.

Success is there for the taking for retailers who put their customers first by acting like tech companies (i.e. Netflix and Amazon). Personalization has become the holy grail for brands looking to differentiate themselves from the crowd and foster a sustainable competitive edge.

The end goal: creating a more seamless shopping experience for all customers, at scale. As we embark on a pivotal new decade in retail, here are 10 retail trends to watch in 2021 to help decision-makers set their brands on a path to success.

Let’s dive in!

1. Social commerce will continue to rise in popularity

Social commerce has been on the rise in the last few years, but the ubiquity of Instagram will crystallize that trend even more in 2021.

In fact, customers are making purchases directly via social media, turning these channels into mini-search engines of their own. Studies reveal that 55% of online shoppers have bought a product directly through a brand’s social post.

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This trend will continue gaining momentum as we move into 2021. The newly released checkout on Instagram and the popularity of Instagram Shopping is a testament to this.

Top retailers like Walmart, Kroger, and Macy’s have already launched successful campaigns on the newest platform—TikTok—to increase customer engagement and acquisition. With well over 1.5 billion users, retailers can no longer ignore this platform or label it as a flash in the pan.

By November last year, TikTok had already generated $115.3 million from user spending, with the in-app user spending rising each month and peaking at $18.2 million in October.

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It is an excellent time for brands to jump on the social commerce bandwagon and leverage emerging social media channels that are popular with their target audience. Retailers can even partner with social media influencers and allocate resources to building shoppable social profiles, especially on Instagram and Pinterest.

We’ve already seen some success with this: MAKE UP FOR EVER leveraged its partnership with popular Instagram influencers to help its customers find its virtual assistant. As an extension of their influencer strategy, the chatbot became a new type of ad destination for customers, sparking conversations on Messenger, and creating a deeper engagement with the brand.

MAKE UP FOR EVER influencer adds a custom link in the bio

Another trend we’re spotting is virtual celebrities that are slowly but surely blurring the lines between reality and the virtual world. Case in point: Lil Miquela, a computer-generated celebrity.

A carefully crafted personality that is complete with a backstory, likes, and dislikes, Miquela Sousa goes by her Instagram handle @lilmiquela and has a following of 1.8 million. She partners with the likes of Prada and Nike and has even made it to Time’s list of 25 most influential people in 2018.

2. Google shopping will establish itself as a marketplace

The new platform—launched in early 2019—fused Google Shopping with Google Express (the existing retail marketplace). In principle, it remains an online marketplace where businesses can showcase product listings right on Google search itself by optimizing for Google shopping and leveraging this mighty sales channel—not to mention the ultimate SEO hack for online brands.

However, we predict this is going to be a game-changer for businesses and consumers.

On the customer side, the platform will allow customers to discover products and stores, compare specs, prices, and make a purchase online or in a nearby store or through Google directly. Not to mention that customers will be able to add items to a universal shopping cart across Google Search, Images, and YouTube.

Touted as the new shopping experience, cracking Google shopping should be on the to-do list for retailers.

Ecommerce brands can integrate their ecommerce platform with Google shopping and create a product listing ads that are place their products at the top search engine results page (SERPs) for shoppers who search for anything related to your product.

That’s a powerful marketing tool, and a recent study indicates that Google Shoppings helps boost customer conversion by more than 17%.

If you are an ecommerce merchant, especially one that is selling niche products, head straight to the Google Merchant Center to sign up. If your online store meets the ad requirements, you can begin advertising via Google Shopping and start reaping the rewards it has to offer.

3. More order fulfillment options will emerge for merchants

It is not a stretch to say that we now live in the experience economy where customers expect efficiency and distinct, fast shopping experiences. Haven’t we all noticed how expedited checkouts, one-click payments have quickly become the norm?

It shouldn’t be a surprise that shortened delivery time is also the new standard of customer expectations.

First came the 2-day via Amazon Prime, only to be fast-tracked to next-day deliveries. PwC reports that 88% of consumers are willing to pay extra for same-day or faster deliveries.

Unless you are a retailer that has an Amazon Prime Air drone at hand to deliver orders in 30 minutes or less, you have a problem.

As a retailer, here’s what you can do:

  • Got brick-and-mortar locations? Offer your customers the option to buy online and pick up in-store.
  • No physical location? Consider partnering with existing brick-and-mortar businesses to serve these customers—Amazon and Kohl’s partnership is a great example. Kohl’s accepts Amazon returns at their 1100 odd stores, and labels and ships parcels for free. In return, they get steady foot traffic to their stores.

We see that this trend is going to be on the uptake, and your business would do well to mitigate any and all issues your customers may have with your shipping, delivery or return policies. By doing so, you eliminate friction from the purchase experience and amplify the chances of return business.

4. Having an omnichannel customer journey will become table stakes

2021 will be the year when brand omnipresence and customer personalization will make all the difference.

With customer journeys becoming increasingly non-linear, the transition across platforms needs to be continuous. This is especially important if your ideal customer indulges in a purchase only after 2-3 interactions with your brand. For instance, a customer browses your product catalog on your Facebook page, chooses to visit your website for more information, and finally completes the purchase in the app.

You want to guide your consumers towards the purchase and not lose them as they move from one platform to another.

When such customer behavior is paired with the booming state of social commerce, retailers need to sit up and take note of the writing on the wall—adopting an omnichannel approach that will hold you in good stead. You’ll be able to identify your customer preferences and intents better, and in turn, personalize marketing campaigns that nurture and close.

Because of its ubiquity, messaging can be the glue between all these customer touch points. By the end of this year, Google Business Messaging, WhatsApp and Instagram would have rolled out their play, including Apple Business Chat, which is slowly getting out of beta.

In recent news, Google RCS is now on every Android phone, keeping true to the promise of rich messaging that is not limited to emojis but now will also support product carousels.

5. Shopper demand for real-time conversations with brands will rise

Conversational marketing, chatbots, and AI are no longer myths or industry buzzwords. They are here and changing the customer experience landscape. If you’re a retailer, you cannot afford to turn a blind eye to customer excellence.

According to Hubspot, 48% of consumers would prefer to connect with a company via live chat than any other means of contact. This data is not surprising, considering the customer of today expects 24-7-365 instant service.

On the other hand, more than 50% of consumers will choose chatbots over human agents to save time.

While chatbots remain the single most valuable tool for retailers as it offers a solid mix of convenience and experience, it would be more prudent to invest in a hybrid chat solution.

These solutions are second-generation conversational AI platforms that focus on collaboration with human teams. With a hybrid solution, you deliver on-demand service for your customers across every touchpoint, at scale, while keeping your human team in the loop for higher-value interactions.

Because, let’s face it: When treated as independent elements, both chatbots and human teams have their own set of challenges.

Chatbots might not be able to solve complex or sensitive queries, and human teams can only be scaled up to a point before they start eating into your profits.

However, when you put AI+humans together, you get a formidable force. A chatbot that is always on, across channels, passes on qualified leads to your sales team with context, and engages and serves your customer better.

Leading AI chatbots in the market today work in tandem with human teams to power personalized interactions and deliver quicker support resolutions.

If you haven’t yet invested in an AI-powered chatbot, now would be a good time to start thinking about building a chatbot strategy for your business.

6. Direct-to-consumer brands will continue to dominate

The D2C strategy is quickly becoming the preferred way for brands to eliminate the barrier (third-party retailers) and connect with their consumers directly.

According to J.D. Power, approximately ⅔ of all consumers in the United States expect direct connectivity with the companies from which they get their goods and services.

There are multiple reasons why D2C works—you have greater control over the brand, marketing tactics, and sales measures. It also helps to directly connect, engage with your customers while garnering a treasure trove of data to iterate your acquisition strategy.

A classic example is Procter & Gamble (P&G). Even though their high-profile brands are ubiquitous in retail stores, it launched a subscription service for its Tide brand, that allows consumers to get regular deliveries of Tide Pods laundry detergent.

Through this digital approach, P&G not only made the life of the consumer easier by anticipating their household needs but also found a way to collect more consumer data while reducing dependency on third-party retailers.

According to the IAB, Nike projects that their direct-to-consumer sales will have grown by almost 2.5 times between 2015 and 2021, going from $6.6 billion to $16 billion.

It pays to remember that the future of retail is a lot like its past—creating meaningful and personalized shopping experiences; only this time, it is online.

While the barriers to entry are low in D2C, retailers need to pick their battles and streamline their goals. After all, you’ll be battling the likes of Amazon and Walmart, who have already established a massive customer base.

That said, it’s easier than ever to kick-start your D2C strategy with platforms like Shopify and Shopify Plus. Big and small brands can now go D2C with ease and fuel their ecommerce strategy.

7. Top retailers will invest more into tech innovation

With the competitive landscape evolving rapidly and in-house innovation faltering and growing expensive day-by-day, retailers are buying technology companies to keep up with the changing times. The last two years have seen a slew of unexpected tech acquisitions by retailers.

McDonald’s acquired Dynamic Yield—a marketing technology and data processing company and is using the tech to now create a drive-thru menu that factors in the weather, restaurant traffic and trending menu items.

Here’s what McDonald’s president and CEO Steve Easterbrook had to say about the acquisition.

“Technology is a critical element of our Velocity Growth Plan, enhancing the experience for our customers by providing greater convenience on their terms. With this acquisition, we’re expanding both our ability to increase the role technology and data will play in our future and the speed with which we’ll be able to implement our vision of creating more personalized experiences for our customers.”

Close on McDonald’s heels are other retail giants; In February, Walmart purchased Aspectiva, an AI solution that collects product reviews to make personalized recommendations to customers. In 2018, Nordstrom acquired two digital startups, BevyUp and MessageYes, both customer service messaging platforms, to connect store employees with customers to respond to questions and give styling tips within the Nordstrom app.

The key point to note is that all these technology acquisitions focus on bringing more value to the end consumer and building a more profound connection via personalized experiences and product recommendations.

This trend is gaining ground, and we believe that in 2021 we’ll see many retail giants invest higher stakes in the technology industry. That said, smaller retailers can also get their skin in the personalization game with the help of AI chatbots.

8. Consumers will be more willing to exchange data for personalized experiences

A study by Accenture Pulse Check found that personalization is a priority with 83% of consumers, and these consumers are willing to share their data with trusted companies if it leads to personalized experiences.

The next wave of disruption to follow are Customer Data Platforms (CDPs). Widely lauded as a significant marketing advantage by Forbes Technology Council, CDPs are soon becoming the preferred way for retailers to future-proof their brand and manage disparate data streams garnered from customer interactions and behaviours.

The good news for retailers is that consumers are not as apprehensive or reluctant to share data as we thought, as long as it adds value to their experience with a brand, i.e. leads to personalization.

“Personalization is nothing but translating information into assistance. Over the next few years, $800 billion in sales will shift to e-retailers that use site personalization, and away from those that don’t.”

– Kiran Mani, Managing Director of Retail, Google

A report by Segment also suggests that 44% of consumers are likely to become repeat buyers after a personalized shopping experience with a particular company.

This equation pretty much sums it up:

A customer’s propensity to buy = your brand + level of personalization

We predict that more and more ecommerce business owners will realize the significance of personalization in retail and leverage consumer data to deliver superlative brand experiences.

 9. One-to-many commerce will officially be usurped by one-to-one commerce

The one-size-fits-all ecommerce will slowly but surely be whittled out and replaced with one-to-one commerce, in real-time.

Personalization is good, but to make it great, it has to be in real-time. When retailers account for dynamic and adaptive ways to connect with their customers, it brings more significant results because the impact generated is much higher.

To sum it up, real-time personalization enables you to deliver tailored content to different visitors to your online store.

Such personalization includes, but is not limited to, dynamic product displays, real-time conversations on the website, etc. Nosto is one such solution for retailers that enables them to deliver personalized shopping experiences for customers. What’s more, it’s not just limited to experiences on the website but pans across pop-ups and social media.

10. Consumers and brands will get acquainted with headless commerce

Back in the day, enterprise-grade ecommerce platforms were built with the underlying assumption that customers shop using either desktops or laptops via web browsers.

However, this is not the case anymore. The customer today can pretty much skip the web browsers. Think mobile, progressive web apps, social media, virtual and augmented reality, and voice assistants like Google and Alexa. These are all additional touchpoints and new “storefronts” for your business.

Your customers expect digital experiences to be smooth, immersive and personalized for them, and anything less than that is not good enough. And your outdated tech stack is not going to help matters.

Enter headless commerce platforms that are helping retailers deliver custom experiences that are independent of the back-end.

The touchpoints in the customer journey, on all environments and devices, are purely API-based, making business operations more flexible. Being API-first, these headless ecommerce solutions are gradually starting to dominate the retail space, and 2021 is going to be no different. Legacy enterprise ecommerce platforms are soon to go extinct.

Whether you are yet to invest in a tech stack or looking to upgrade, do right by your customer—invest in a headless tech stack and give your business the flexibility it needs to evolve and grow quickly.

Are you ready?

With all these trends and changes in the retail landscape, it’s easy to feel overwhelmed and underprepared. However, it’s just about taking that first step and begin testing the waters to see what works best for your brand. There are several established tech partners like Shopify, Nosto, and Heyday who offer cutting edge tech solutions for retail businesses of all sizes to start experimenting, learning and iterating, without betting the house on a single trend.

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