One year later: How the Pandemic Has Changed Digital Commerce

These seven digital commerce lessons should be on your agenda for 2021 if you haven’t taken action by 2020.

Traditional consumer behavior was disrupted by online shopping and it became the preferred way to shop in 2020. U.S. retailers were swarmed by online consumers, and digital sales for 2020 were boosted by $183 billion, up 42% from 2019. Just a few years ago, it would have been hard to envision a merchant environment where over one-third (34.3%) of retailers sell the majority of their products and services online.

Businesses across all industries responded to this fundamental shift in the way people buy. They created new websites, used new technologies and tried new strategies. They learned a lot about digital selling as they tried new technologies and found out what their customers wanted from online shopping.

These trends, as well as the feedback received from Magento Commerce customers, led us to identify seven key lessons businesses should learn from 2020. If you don’t have them yet, it is imperative that your business acts on them.

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Lesson 1: Page loading times can be crucial in determining the success of your sales

Slow-loading websites are becoming less popular with shoppers who spend more time online. Potential shoppers may abandon your website before the page loads. However, performance issues can also cause them to leave. Slow page loading times can impact your Google search rankings, which can result in lower organic traffic and less sales. Speeding up your pages can help you increase your profits. If they take three seconds to load, it could be a sign that your website is slow loading. As a benchmark, Google itself aims for under half-a-second load time.

This lesson has a practical application. If you want to stay in the customer race, your organization must make performance monitoring a priority for your digital storefront. This means infrastructure upgrades are essential to ensure that your online business grows and can support increased web traffic.

If you’re a Magento Commerce customer, see the Four Ps of Peak Season Performance blog post for tips to quickly triage site performance.

Lesson 2: Curbside and instore pick-ups are here to stay

One of the most important eCommerce themes for 2020 is curbside pickup. The new system was quickly adopted by grocery stores, which proved to be popular with almost every type of brick-and-mortar retail business. A year later, curbside services are expanding to include merchandise returns as well.

Customers love curbside pickup and they don’t want it ending. The Digital Commerce 360 Top 500 ranked 245 retailers offer curbside pickup. This is a significant increase from the 6.9 percent that was offered at the end 2019. Our research (Adobe) shows that 23 percent of online shoppers prefer to order online and pick up in-store (BOPIS), rather than waiting for delivery at their home.

Your customers will expect curbside pickup, BOPIS or both. These options should be available to your business immediately if it doesn’t yet. Magento Commerce users who are ready to add these delivery options have a head start since Magento version 2.4 natively supports BOPIS.

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Lesson 3: Mobile shopping trends continue their acceleration

Many people imagined that they would shop at home, possibly from their laptop or desktop, and perhaps even while sitting on the couch with their feet up. The reality was that the opposite happened. As the mobile-revolution continued to grow, consumers spent more time on their smartphones. Mobile device sales increased due to an increase in phone usage. By September 2022, mobile spend is projected to account for more than 50 percent of online sales.

Online sellers have not kept pace with the increasing volume of mobile traffic. Although mobile devices account for 60 percent of visits to eCommerce websites, they only represent 40 percent of sales. Mobile web stores might not offer a great shopping experience. These are some of the common problems:

• Site speed
• Customers will need to zoom in or out on small text and images.
• Mobile users must switch to desktop mode due to limited functionality
• Insufficient product information

Mobile-first technologies such as Progressive Web Applications (PWAs) may be a good option if your mobile store isn’t converting customers as well as it should. PWAs not only provide an app-like experience in any web browser but also help to reduce page load times and improve search engine rankings.

For more detail about PWAs and how businesses of all kinds benefit from them, see the The ABCs of PWAs blog post.

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Lesson 4: B2Bs who don’t sell online are left behind

Businesses that are B2B-oriented were similarly disrupted by COVID-19, just like their B2C counterparts. They turned to digital models for success. The result was remarkable. Among those who made the move, 89% indicate they are likely to continue with new digital methods for B2B sales going forward.

This trend was accelerated by the 2020 shift in direct sales models, which saw sales reps calling customers and placing orders for them. Increased revenues are being realized by B2B companies that have added online selling. They can now:

• Offering new flexible selling models such as subscriptions and automatic order fulfillment, and digital products like documentation and warranties.
• Create marketplaces for distributors and resellers.
• Reach small businesses and buyers who don’t place enough orders to warrant a dedicated account representative.
• Increase sales rep productivity. Sales reps can, for example, place orders on behalf customers through their eCommerce site.

Launching an eCommerce website is a must-have for those who sell to businesses but are still oriented towards an offline model. For help getting started and learning more about how B2B companies in most industries are winning online, see The 6 biggest trends in B2B commerce for 2021 blog post.

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Lesson #5 – Drop-shipping and direct selling can help fill brick-and-mortar retail gaps

Online sales accounted for 101 percent of all gains in retail in 2020, which indicates that sales through all other channels–stores, catalogs and call centers–actually declined. This is creating problems for B2B sellers and manufacturers who rely on bricks-and-mortar stores to sell their products.

Two major strategies are being used by manufacturers to combat declining wholesale orders and increasing inventories. First, they can create a direct-to-consumer website. If your eCommerce platform supports both B2C and B2B web stores as well as multi-site selling, starting a new consumer-facing web store can be a fairly straightforward process.

Drop-shipping is the second strategy. This allows you to fulfill orders placed on retailers’ websites for your products. This strategy allows you to take advantage of the online success of retailers without needing to market directly to customers. Drop shipping is possible by using an eCommerce portal. This allows you to manage your relationships with drop-shipping partners. It also helps if your retail partners use Magento Commerce, because it lets organizations actively manage all sources of inventory, including drop-shippers.

Lesson #6: Augmented reality (AR), artificial intelligence (AI), and artificial intelligence (AI) will enable more personalized experiences

Today’s buyers will have more personal experiences as more businesses go online. 36% of consumers online say they expect more personalization from retailers.

Both AR and AI can help businesses create unique online experiences. AI allows companies to offer personalized product recommendations, promotions, content, and other services. AR also allows virtual objects to be placed in real-world settings. AR is becoming more popular as more people shop online and work from home. This allows retailers to offer a personalized and unique experience. AR in eCommerce includes:

• Virtual make-up counters and fitting rooms
• Pop-up shops powered by AR
• Virtual appliance installations–consumers see what appliances would look like in their own home
• View virtual home showrooms to see how your living room could look with new furniture
• Virtual office makeovers–businesses see what a new coffee machine would look like in the break room or how new chairs might complement a conference room

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Your commerce platform should be compatible with both AR and AI technologies. Magento Commerce already offers built-in AI in the form of Product Recommendations powered by Adobe Sensei. You can also find AR extensions that integrate well with Magento at the Magento Marketplace.

Lesson #7: Everybody wants flexible payments

Both consumers and businesses were reminded by the pandemic of how prudent they should be with their money. For example, consumer savings increased while business capital expenditures dropped by 11.4 percent. Businesses and consumers alike have welcomed payment options that allow for greater flexibility and choice, as well as those in certain economic sectors that are experiencing disruption and delay.

Customers can buy on their terms with low-interest credit lines, zero-interest financing and installments. Industry analysts predict the “buy now-pay later” market will reach $680 billion in 2025.

We recommend offering customers flexible payment options, as the global return-to normal is expected to continue for at least one year. If your site is built on Magento Commerce, check out the Magento Marketplace, which offers many different flexible payments solutions. Another tool available in Magento Commerce is to take advantage of PayPal Credit.