The last few years have been interesting to say the least. When we focus on ecommerce, it’s been a tale of explosive growth, leveling out, and rocky supply chains. And now, after its epic rise, we’re starting to see a comedown to pre-pandemic normality.
You only need to take a quick look at what’s happening in the world of ecommerce, tech, and investment, to understand what’s going on.
Shopify recently announced major cutbacks in staff, admitting they took a bet in ecommerce leaping ahead in growth by 5 or 10 years where it was initially predicted pre-pandemic. That bet didn’t pan out, and it would seem many brands, tech companies, and more were in the same boat. Ecommerce adoption started to downturn, not skyrocket.
So what happened? And what can ecommerce merchants do to push growth?
The answer lies in physical retail, and omnichannel commerce.
What happened to ecommerce growth?
To understand what’s happening now, we need to look back at the last 2 or 3 years in the ecommerce industry. The Covid19 pandemic had an immediate and profound impact on the daily lives of people around the world. With global lockdowns and a lack of information on how best to deal with the virus, uncertainty became the norm. Ecommerce too became the norm.
People quickly turned to online shopping to fulfill many of their daily needs. From everyday essentials to groceries to entertainment, clothes, tech, books, and more. With different restrictions in place in every country, ecommerce quickly boomed and became the new normal for many. That led to huge growth in ecommerce adoption globally.
Throughout 2021 restrictions gradually started to lift and people could return to some version of normal life. However, the expectation was that consumers had now experienced the value of ecommerce in a highly concentrated way. You can have anything you want shipped to your doorstep, why bother going back to brick-and-mortar?
As it turns out, people still like physical retail. Looking at quarterly retail sales over 2020 and 2021, we can see that in the US ecommerce exploded in Q1 of 2020, but took a sharp nosedive in Q1 2021. We can also see the opposite for brick-and-mortar commerce. By Q4 2021, brick-and-mortar retail sales were above that of ecommerce.
In real terms, this means that all those brands who invested heavily in ecommerce perhaps didn’t expect such a quick turnaround. In the present day, growth is pretty much back to where it was predicted to be by now as per pre-pandemic estimates.
People want both ecommerce and physical retail. And that isn’t changing anytime soon.
Now, between layoffs, pulling back in investment, and a downturn in adoption, you may think the outlook for ecommerce is pretty bleak, right?
Wrong - it’s still a really positive, bright future. It just isn’t quite as fast or as furious as many thought it would be.
Ecommece is still growing. In Q1 2022, US ecommerce sales grew by 6.7% despite the downturn in adoption. Statista estimates that US online sales revenue will top $1.3 Trillion by 2025 - that’s well over 50% growth from 2022. There is still opportunity, and there is still growth.
That’s why it’s time to go back to a trend everyone was talking about pre-pandemic - omnichannel commerce.|
Why omnichannel is the way forward
The predominant idea behind omnichannel commerce is simple - meet your customers where they are. Prior to the pandemic, omnichannel commerce was trending. At that time, the idea was to build a fluid experience that spanned across all channels including brick-and-mortar, social media, ecommerce, etc. With brick-and-mortar out of the game, brands focussed more on omnichannel as it relates to ecommerce and social media. Now, those same brands are looking at adding physical retail back into the omnichannel equation.
And it’s not just a return to brick-and-mortar that’s pushing omnichannel, it’s also growth in social commerce.
Another trend throughout the last couple of years is the rise of platforms like TikTok and Instagram Reels. Younger consumers are increasingly discovering products on these platforms, and the brands which can facilitate getting them from discovery to purchase in as few steps as possible are growing the fastest. That reduction in steps to purchase is at the heart of omnichannel commerce.
So, customers are relying less on ecommerce as a channel but it’s still growing. They’re looking on social media for new products to buy, but they’re also shopping in person. They may discover a product on TikTok, but they want to collect it in person. Or they may shop in-store and want to return online. Developing a true omnichannel strategy will allow you to meet your customers wherever they are at the exact moment they’re ready to purchase. It will provide the fluidity and flexibility they want, while improving your chances of acquisition.
Now let’s look at some of the ways you can better deliver an omnichannel experience.
What ecommerce merchants can do to provide a better omnichannel experience
Offer in-store options on product pages - local pickup and delivery, buy online return in-store
Not every customer who browses online wants to also buy online. Equally not every customer who purchases in store will have the means to return a purchase in the same manner. It’s vital that you offer flexibility across sales channels, making it easy for customers to purchase, make returns, and more wherever is most convenient for them.
The first and easiest way to achieve this is by offering in-store options on your product pages:
- - Buy online, pick up in-store (BOPIS).
- - Order online, return in-store.
- - Local delivery options - e.g. 1 hour local delivery.
- - In-store availability and location checker
Displaying these will help customers who are looking for all different types of experience. It also helps to blur the line between ecommerce and brick-and-mortar, making them part of the one experience rather than two separate channels.
Make gift cards work both online and offline
It’s quite common to see the option to purchase an online or in-store gift card. One is a physical gift card shipped to the customer or recipient’s home address to redeem in-store, and the other is sent via email to be redeemed online. This draws a very clear line between the two channels, and takes away flexibility in experience for the recipient.
The best strategy here is to have one gift card which is compatible with both online and in-person purchases. Physical gift cards can be lost, which can spoil the experience for the recipient and the customer even if the fault lies in their hands. People might also forget to bring a physical gift card to a store, or become frustrated when it isn’t redeemable online.
Digital gift cards are much more convenient, as they can be stored on a mobile device. However, many aren’t compatible with in-store POS. Govalo’s gift cards can be QR code enabled, making them compatible with Shopify POS. This means a gift card can be sent directly to the recipient, and they can redeem it wherever they prefer. They can even part redeem in-store, then redeem the rest on an online order.
By removing the steps involved in two separate cards and the need for physical gift cards, you’re making the experience easier for both the customer and recipient.
Allow customers to order in-store for delivery when an item is out of stock
There’s nothing worse than finding a product you want online, going to the physical store, and finding it’s out of stock. And to put salt in the wound, the product is in-stock online. That’s a reality for many customers, and it really detracts from their experience. Not only that, but there’s a strong chance that the retailer loses out on the sale. It’s a dead end.
But it doesn’t have to be. Instead, make it possible for customers to order the product in-store through one of your sales associates for home delivery or delivery to the store. The customer may not initially think of this as an option, so rather than leaving your store to find an alternative in a different outlet nearby, you can offer convenience and avoid losing that sale.
Do more with social commerce
Have you ever heard of the “TikTok Effect” or “TikTok made me buy it”? Social media has developed to such an extent that consumers see a viral product on platforms like TikTok and immediately go to buy it. This has led to huge success for brands both big and small, and demonstrates the power of social commerce.
Especially if you’re targeting a younger audience, your brand needs to do more with social commerce particularly on visually engaging platforms like TikTok and Instagram Reels. It’s a channel with huge potential for viral marketing, and with developments like Shopify for TikTok or Shopify for YouTube, it just makes sense to develop this channel further.
Make better use of mobile and crypto payments in-store
It isn’t just where we’re making purchases that’s important, but how we’re paying for those purchases. In the last few years, crypto and mobile payments have increased - crypto payment gateway adoption is expected to grow by 22.8%. Moreover, adoption of mobile payment gateways globally continue to grow such as Apple Pay, Google Pay, WeChat, and more.
Now, with ecommerce it’s easy to facilitate all different payment methods and gateways. However this is definitely one area where brick-and-mortar is falling behind. Payment is part of the customer experience, and if they can’t pay the way they prefer it sours that experience.
Think of if you’ve ever been to a coffee shop and their card machine is down but you have no cash on you - it’s that exact feeling you’re giving brick-and-mortar customers when they can’t pay the same way they would on your online store.
If you want to grow your brick-and-mortar experience, you need to start exploring different payment methods and gateways that will offer the ultimate in flexibility. Bring the options available in line with your online experience. This also involves looking at what you currently offer online, and assessing which payment options you should start offering to better accommodate your customers.
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When brands saw ecommerce growing, many put all their chips on the ecommerce table. Now that consumers are moving back to brick-and-mortar, those same brands may make the mistake of moving their chips to the physical retail table. Those who will come out on top will be the brands who instead see the value in both channels working together with greater flexibility and fluidity. This will not only allow both channels to grow, but if the tides shift in favor of either they can adapt quickly and easily.
In short - ecommerce isn’t dead. Brick-and-mortar was never dead. Omnichannel commerce is back, and it’s here to stay.