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Peoplevox Updates

What happens next? Part 1

Leo Connolly
  • 14 January 2021
  • 6 min read

Like everything else so far in the roaring 2020s, e-commerce has been a bit of a rollercoaster. Online has become both the predominant channel and the primary focus for brands all over the world. Currently, we reckon the industry is doing well to stay upright on the surfboard and riding the wave. Even by the spring last year, over a third of all retail sales in the UK were online, and that was while some shops were still open on the high street. The figures since then have been relentless in their uptick. Shopify reckon we've seen 10 years' growth in 3 months... Dusting off the famous crystal ball, I want to play the 'what happens next' game with a few feasible scenarios, and break down key upcoming trends and predications for direct to consumer in 2021 and beyond:


So just how much sales growth is e-comm going through?

Thanks to Tugba Sabanoglu and the team at Statista, we know that in 2019, retail e-commerce sales worldwide were 3.5 trillion USD and by the end of 2020 that number was 4.2 trillion USD. Based on their forecasts, the sales of any products or service using the internet via any device, regardless of the method of payment or fulfillment (that's just their way of defining 'e-commerce sales', if you're interested...), could be close to 5 trillion in 2021, 5.7 trillion in 2022 and 6.5 trillion in 2023. Looking at the charts and predications they've made, these figures are based on a pretty linear growth. Now whilst we aren't quants or top tier investment analysts here... there's definitely scope to say that the growth could be more exponential than linear over the next 5 years.

Average basket values are going up due to increasingly premium brands finding online to be their most popular channels with existing and new customers. On top of that, loyalty programmes, customer retention schemes and marketing efforts from brands are becoming a lot more professionalised, data-driven and successful at keeping those customers coming back for more and driving up both purchase size and LTV.

Moreover - some of the classic in person staples of retail have shifted this year, particularly every day essentials, healthcare and groceries. Things typically you'd be popping to the shops for on a weekly basis. The convenience factor has pivoted from it being easier to nip down the road to pick up essentials, to now it's easier to buy online and avoid queues, face-masks, limited stock options etc.

The coronavirus crisis has shown why we need a universal basic food service

These two pervasive changes are force multipliers and show signs only going one way in terms of mass adoption globally. Cindy Liu from Insider Intelligence puts it best:

"There will be some lasting impacts from the pandemic that will fundamentally change how people shop. For one, many stores, particularly department stores, may close permanently. Secondly, we believe consumer shopping behaviours will permanently change. Many consumers have either shopped online for the first time or shopped in new categories (i.e., groceries). Both the increase in new users and frequency of purchasing will have a lasting impact on retail.”


The price to pay for new customer acquisition

Competition for attention online is at the all time high. Miles scrolled per device per person must also be at the all time high. It makes sense that brands are all trying to capture this excess of attention and get on the screens of relevant potential customers. As a result, since GoogleAds works as an auction, the more people bidding, the higher the price rises. The digital marketing landscape has changed quite significantly over the last 12 months due to spiralling prices and brands are starting to look elsewhere for their revenue. As mentioned earlier, the big one we are seeing is brands focussing more on building a real, tight-knit and engaged community out of their existing customers.

HX - human experience - is the new luxury. It's in high demand, people have been bereft of it for a year, and it makes you feel special! By offering more of a human, personal experience (great customer service, speaking to someone real, 1 to 1 connections, feeling like you're 'a part of something') and developing their own content to share more value with the customer-base, brands are twigging on to the fact that a loyal customer who spends more and more each time they shop on the site is going to be worth a lot more to them long term than a hoard of new, paid-ad acquired customers who buy one item and never return.

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The ineluctable rise of TikTok

SAVAGE X FENTY - Rihanna's lingerie brand, put an app onto their e-commerce site at the end of 2020 that tracks customers who have come from TikTok. This means one of the fastest growing, most exciting brands of this generation are backing 18-25 year old influencers making 10 second videos as a genuine, revenue generating marketing strategy. And we say, bring it on! New technology and new trends are always going to drive attention, engagement and cash. If you can mobilise your brand and your products into various media types, such as emerging social platforms, you're on the right path. Brands need to become something their customers thing about and interact with on a daily basis, and not just the 4 times a year they might want to shop for new outfits. That's the only way they will be able to consistently deliver their value, their brand vision and maintain the engagement.

There's some really great apps out now that are making this a reality. Our clients Princess Polly use Vop - a platform that creates shoppable experiences from social content. They know that video is twice as engaging as still images, and 70% of e-commerce traffic comes from mobile. Tik Tok has found itself right in the eye of the perfect storm, and for Gen Z, this is going to be Instagram influencer status 10x over.

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How Vop turns viral videos into rich revenues for booming brands.


Optimisation, automation, virtualisation... This thread is to be continued.



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