Is 2021 the year e-commerce competition peaks? Having a winning product is now crucial
It’s no surprise that global e-commerce during the pandemic jumped to levels experts hadn’t expected to come to fruition until 2025.
A McKinsey report found that US e-commerce market penetration experienced a decade of growth in 2020’s first quarter alone. Australia’s numbers are even more significant, with a SalesForce study showing our e-commerce growth was the highest in the world in Q2/Q3 2020.
Online retail competition is now fiercer than ever. But as the COVID-19 vaccine rollout gets underway, what does the future look like for e-commerce? And what trends are having the greatest effect on business outcomes?
The future of global e-commerce
Global online sales took a seismic leap in 2020 by a huge 27.6% as brick-and-mortar sales dropped due to rolling lockdowns.
Experts expect that trend to start reversing in 2021, slowing to around 14.3% as people start heading back into bricks-and-mortar stores. The only sector to buck this trend may be B2B online retailers—as business decision-makers prefer dealing with salespeople remotely.
However, it’s clear that retail customers are now accustomed to the convenience and safety eCommerce offers them, and online sales revenue has increased significantly by 42% over the last 12 months. Recent research shows that 1/3 of Australians will continue to buy online.
Those retailers with an established online presence have fared best. As The Iconic CEO Erica Berchtold said: “If 2020 has taught us anything, it’s that those organisations that can be agile and pivot quickly will lead the future growth and direction of our industry.”
Online competition is growing
To remain competitive post-COVID-19, Australian online businesses will need to concentrate on UX (user experience) to stand out, attract new customers and maintain an advantage over increasingly digital-savvy competitors.
Pre-pandemic, having a website was enough. During COVID-19, online businesses had to up their game with e-commerce solutions, clever product development and product sourcing that made it easier for customers to find what they want and buy it online.
Bad UX and poor reviews are hurting your business
Why is UX important? Statistics show 64% of customers believe their experience of an online store’s brand is more important than how much they pay for a product or even the product itself.
When you consider unhappy customers tell an average of 15 people about a poor customer service experience (compared to 11 people sharing a good experience), failing to focus on what your customers want can hurt your bottom line:
- 57% will abandon your site if a page takes 3 seconds or more.
- 60% will leave your site if they can’t find what they were looking for.
- 77% of users are more likely to purchase if a site shows reviews, testimonials or more details about how a product works.
- 73% are more likely to purchase a product with an explainer video.
Abandoned shopping carts are on the rise
Did you know that one of the biggest leaks in e-commerce business sales and marketing funnel is shoppers who add products to their cart but abandon them at checkout?
Approximately 70% of shopping carts get abandoned—that’s roughly 7 out of every ten transactions totalling almost $18 billion in lost revenue globally each year. Over 60% of customers abandon their carts due to shipping costs, while 57% say they were just window shopping.
One way to change a customer’s mind is with a well-timed abandoned shopping cart email—in fact, these emails convert 18.64% of all abandoned carts.
Consolidate your 2020 online wins
2020’s massive e-commerce growth was never going to be sustainable. However, digital shopping is here to stay and having a winning product and paying attention to user experiences is more crucial than ever to staying ahead of your competitors.
In 2021, those businesses getting ahead will focus on product development that genuinely meets their customers’ needs, product sourcing from overseas manufacturing experts who can give them quality products at prices that are sustainable for their business, and minimising importing costs with smarter strategies and streamlined processes.