03/03/2021 | Press release | Distributed by Public on 03/03/2021 10:01
2020 was the year digital transformation became more than a distant ambition, and everything we thought we knew about online shopping statistics flew out the window. We at Salesforce define digital transformation as a reimagining of business in the digital first age. It transcends the traditional and upends the possible with a focus on a digital-first experience.
For the retail and consumer goods industries, this transformation accelerated tremendously once the pandemic was declared in March of 2020. Driving this transformation was the massive shift we saw in consumer behavior.
Experts share how to get ready for the future of retail in the next twelve months.
The number of unique online visitors (shoppers visiting a commerce site for the very first time) grew by an incredible 43% across the globe in 2020. The digital storefront became the consumer's lifeline to the outside world. From entertainment, to socialization, to shopping, survival, and working, consumers shifted their attention to digital. And businesses needed to embrace digital transformation or risk getting left behind.
Consumers doubled down on digital as the year went on, culminating in a 56% growth in Q4, according to data from the Salesforce Shopping Index. The online shopping statistics tell us it was the largest ecommerce holiday season we've ever seen.
Retailers and brands must be relentless in the pace of innovation for years to come.
Why is this newsworthy? Much of this new behavior will stick - setting a whole new baseline for digital commerce. At the same time, retailers and brands must be relentless in the pace of innovation for years to come.
Let's take one final retrospective look at 2020, and explore the three big questions on the minds of retailers and consumer brands regarding this new digital baseline.
Short answer: No. Long answer: It's complicated. We're all looking forward to getting out of the house, and shopping is one of the social activities that people miss. Once stores open back up, consumers will undoubtedly return. But don't let that stop you from investing strategically in your digital roadmap.
Why? We know from analyzing the shopping habits of consumers for nearly a decade that habits adopted during peak periods tend to stick around. Peak season (November-December) always sets a new baseline for digital penetration. And while the peak does come back down, it never returns to pre-peak levels.
Once stores open back up, consumers will undoubtedly return. But don't let that stop you from investing strategically in your digital roadmap.
Consumers that embrace change realize the ease and convenience of digital shopping. And as more sites break down the friction between the digital and physical landscape, a return to the old way is less compelling. Just look at this data showing the upward slope of digital penetration over the last five years.
How should you future-proof your website and store experience? Focus on strategies that meet shoppers where they are and reimagine the role of store associates. Buy online pickup in-store (BOPIS), order management, inventory visibility, and embedding your brand across multiple touchpoints are table stakes.
Answer: Benchmarking your business performance is critical to your strategy and tactics. But 2021 is going to be especially difficult. In 2020 we experienced massive growth in ecommerce and significant declines in brick and mortar foot traffic (particularly for non-essential categories). It's possible that the further we go into 2021 - as the pandemic comes under control and pent-up demand for shopping in physical stores increases - we are likely to see cooling of digital growth. While the surge in online sales throughout 2020 has created a new baseline, when comparing year-over-year (YOY) performance, it's almost certain that digital sales in 2021 will shift back to typical rates seen by the industry in prior years.
We know from analyzing the shopping habits of consumers for nearly a decade that habits adopted during peak periods tend to stick around.
Does this affect your strategy? In 2021 it's going to be important to compare your performance to both 2020 and 2019. Because 2020 was such an outlier for digital performance, it will skew performance data when compared YOY. But this doesn't mean that consumers are abandoning all these new digital behaviors (see the previous question). There will be a rebalancing, but digital transformation is here to stay. Make sure you also compare your 2021 to 2019 to get a more accurate picture of digital adoption across your customer base.
Answer: After a year of rapid digital transformation, one thing is clear: the need for a unified digital and physical commerce experience is critical. Consumers gravitated toward brands and retailers offering tactics like BOPIS, curbside pickup, and delivery at significant rates. In fact, BOPIS became an acquisition channel as consumers faced inventory shortages and shipping delays. If a brand has both online and brick and mortar stores, it doesn't matter if there is one store or 5,000 stores, consumers expect a unified experience across all touchpoints. Here are the top digital imperatives for 2021:
In an uncertain 2021, the secret to preparing your business may be to strategize and communicate with purpose and get ahead of the consumer. If you wish to revitalize your physical stores, let your customers know - they will show up. Also inform your customers if you wish to double down on digital; they'll find you online. Whatever path you pursue, be deliberate and open with your customers. If 2020 taught us anything, it's that we can be agile and pivot quickly. Continue to be agile, but with the perspective to do so in a scalable and efficient way.
Orders coming from a social-referred channel grew by 50% in Q4 2020. Understand your customer, find where they like to spend their time, and embed your brand into those platforms.
We are living through one of the most rapid periods of digital transformation in modern history. Take this opportunity to reevaluate your brand strategy and make digital the key component of 2021 planning.
Powered by Commerce Cloud, the Q4 Shopping Index uncovers the true shopping story by analyzing the activity and online shopping statistics of more than one billion shoppers across more than 51 countries, with a focus on 11 key markets: U.S., Canada, U.K., Germany, France, Italy, Spain, Japan, Netherlands, Australia/New Zealand, and the Nordics. This battery of benchmarks provides a deep look into the last nine quarters and the current state of digital commerce. Several factors are applied to extrapolate actuals for the broader retail industry, and these results are not indicative of Salesforce performance.
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