As we begin a new year, it's a good time to take a look at what lies ahead for retailers and online merchants. While COVID-19 brought many retailers to the breaking point in 2020, it also accelerated retail technology trends that had already been infiltrating the industry over the years.
Here are some of the key trends the industry should expect to see accelerate in 2021.
Modified Brick-and-Mortar Retail
The brick-and-mortar retail experience will be permanently altered due to the impacts of the coronavirus. Buy online, pick up in-store (BOPIS) will become standard practice across virtually every retailer, with square footage in the store dedicated to servicing customers that have elected to use this option to shop. Another practice that's now becoming standard during COVID-19 is curbside and contactless pickup. This will remain a standard practice, altering not only store layouts, but also parking lot layouts to account for this purchase option.
Less obvious at first will also be how retail locations will shift their focus and purpose to better support the e-commerce channel. In time, consumers will see how stores may be converted to focus on customer experience as opposed to transactions or may be shut down to customers altogether and serve as mini warehouses and fulfillment centers to accommodate online sales demand.
Greater Emphasis on AI-Based Personalization
Artificial intelligence (AI) and machine learning were very big buzzwords in 2020, and made some inroads in the e-commerce space primarily via chatbots and some personalization tools. This trend is going to increase substantially in 2021. The recommendation platforms that provide this capability will significantly increase and, more importantly, will be accessible to small to midsize businesses (SMBs) in addition to the largest enterprises.
There will also be new areas within e-commerce where AI becomes relevant this year, primarily as it relates to shipping and pricing. From a shipping standpoint, AI will be used to provide more accurate delivery dates and times for customers based on their specific address. Meanwhile, on the backend, AI will help optimize shipping costs that e-commerce sites have to pay.
From a pricing standpoint, AI-based dynamic pricing will also start to become more prevalent and will take factors like current demand, competitor pricing and shopper preferences into account. This type of pricing within e-commerce will have parallels to how airlines typically charge for plane tickets online.
Shopify will continue to be a driving force in e-commerce for SMBs, and will be regularly compared to Amazon.com and Walmart. The Shopify Fulfillment Network will continue to improve and provide Shopify merchants with fast shipping options and an alternative to Amazon.
Moreover, it's partnerships with TikTok and Facebook will enable significant growth for its merchants and will position Shopify to take advantage of the rise in social commerce.
Increased Focus on Privacy
Privacy will be on everyone’s minds as we enter 2021, especially coming off of the election. While there has been a lot of focus on social media-related privacy and data breaches, there are also very real e-commerce implications to these conversations as well.
Browsers are also getting more actively involved in the privacy conversation. For example, Safari’s Intelligent Tracking Protection (ITP) and Firefox’s Enhanced Tracking Protection have already been implemented to limit third-party cookie tracking, and there are more privacy-related features on the road map for both browsers.
Harry Thakkar is partner at Avatria, a digital commerce firm that builds innovative commerce solutions to help customers reach their full potential.