It's clear the COVID pandemic is reshaping human behavior, and many of the coronavirus-related changes could be lasting. While eCommerce was established long ago as a game changer, new patterns are emerging in online retail during these challenging times. Rather than focus on how the internet is altering the landscape, it's time to ask this question: what's next for online shopping?
Fact is, online shopping is going through another moment. Mobile is growing. Business categories without prior focus on eCommerce are now relying on it. More consolidation and acquisition can be expected. And perhaps most notably, grocery is transformed.
It's no longer as straightforward as getting orders from an online store, or primarily selling products on dominant sites like Amazon and Wayfair.
Online shopping in grocery will only grow.
How dramatically have shopping habits changed in the grocery category? A year ago, online purchases accounted for just 3% of all grocery sales, or $1.2 billion per year. Consumer demand for it was low, and lagged behind other categories. There was a prevailing sentiment that online shopping would never expand significantly in grocery—people wanted to hold and examine that avocado or Porterhouse before they bought it.
Fast forward to this past June. Online sales reached $7.2 billion in that month alone. During the second quarter of 2020, Amazon online grocery numbers increased by 49%, as more customers turned to their Whole Foods subsidiary to stock their pantries.
When the pandemic first began, many consumers began online grocery shopping grudgingly. They had low expectations and most people have found themselves pleasantly surprised.
That level of satisfaction is why online grocery shopping is a new habit that won't disappear when the pandemic ends. The convenience has been duly noted by the consumers, and a significant portion of the marketplace will continue to buy groceries with a few clicks. After all, the alternative is driving to the supermarket, finding a parking spot, wandering the aisles trying to find a particular item, waiting in a checkout line, and lugging full bags into the car and the house. Even the cook who is most passionate about, say, choosing produce, will be unlikely to walk away from that level of ease.
Online shopping on smart phones.
As big as online shopping is becoming, it's also getting smaller. Because more and more consumers are willing to make purchases on their mobile phones. That means the mobile experience of your brand should assume more focus and attention than ever before.
If you have not done it already, take a fresh look at your mobile experience. Is the navigation straightforward? Can potential buyers expand images easily to take a closer look at your products? Is it easy to search for a specific item in the mobile application?
Don't beat yourself up if the mobile version of your site fails to impress. Many do. But invest the time and money to make it a channel that delivers sales just as effectively as your website that's viewed on a desktop.
Expect more eCommerce consolidation and acquisition.
Amazon bought Whole Foods. Walmart bought Jet before folding it and using the experience to build a better walmart.com. PetSmart bought Chewy. The list is lengthy.
Looking forward, expect to see more acquisition and consolidation, whether it's an online behemoth like Amazon buying a brick-and-mortar operation, or a traditional retailer snapping up an eCommerce specialist. For brands and suppliers, that means shifting buyer relationships and an ever-changing retail landscape, with The Economic Times noting, To keep the attention of consumers, it will be prudent to maintain a presence on multiple channels and continue to establish new buyer connections.
Inventory, manufacturing and shipping will have to keep up with online shopping.
As direct-to-consumer orders increase, fresh demands are being placed on suppliers to provide transparent inventory reporting and manufacture in a way that keeps pace with the rapid shifts in consumer demand. Nimble is valued more than ever, and major brands are constantly sourcing new ways to deliver their products in a way that works for the new retail landscape. Waste can't be tolerated if margins are pushed lower.
If you're a supplier shipping direct-to-consumer for a retailer, maintaining accurate inventory is paramount. A slip-up that leads to a frustrated shopper can damage a productive relationship. Make sure you're taking all the steps you can to automate your process and avoid mistakes.
Brands will be wise to constantly review their manufacturing operations and find new ways to produce products more efficiently and definitely more quickly. As shoppers turn to online outlets more frequently, their expectations increase and their patience decreases. These days, don't assume people are willing to wait—they want a seamless online shopping experience.
Finally, there's that crucial last step in the retail supply chain that is becoming even more important as online shopping grows—shipping. Brands need to be able to manage it without mistakes, and handle single-item D2C shipments as efficiently as possible.
If you don't automate the process, you'll find your team investing too much time generating labels and packing slips. Make sure you have a software solution in place now, as the future of online shopping will bring even more D2C orders.
B2B online sales are also increasing.
It's not just apples and shoes that people will buy differently in the years ahead. More and more businesses are turning to online retail when making the purchases their operation needs.
During the pandemic, work shifted from the office to the dining room table for many people. Social distancing and fewer face-to-face meetings translate into more B2B purchases completed with clicks instead of handshakes. In fact, many B2B buyers say they prefer to complete transactions online, even when the dollar amounts are high. A recent McKinsey study indicated.
Where does online shopping go next?
Anyone who claims they know exactly how things will unfold post-pandemic is being dishonest. None of us really know how many of the shifts in behavior will be permanent, and which ones will be shed once some degree of normalcy returns.
That's why flexibility is so important. Suppliers who capitalize on opportunities in online shopping will have systems in place that let them automate, adapt, and succeed. Make smart investments now that will pay off later, no matter how much the retail landscape is altered.
