Shopify exec: Omnichannel commerce is the new norm for the retail sector
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- Retailers have had to sharply pivot their strategies in order to meet consumers' changing behaviors as a result of Covid-19.
- Ian Black, managing director of Shopify, shares why he believes omnichannel commerce is the new norm for the retail sector.
- Because of his work, Business Insider named Black to our annual list of the 10 leaders transforming retail in North America.
- Visit Business Insider's Transforming Business homepage for more stories.
The COVID-19 pandemic is the biggest threat to modern commerce that retailers have seen, and likely will see, in their lifetime. It's meant that the future of commerce has been pulled forward, and we've seen 10 years of innovation happen in the last 10 months alone. Retailers have had to sharply pivot their strategies in order to meet consumers' changing behaviors, and it's become clear there's no value in an "offline versus online" mentality: omnichannel commerce is the new norm. But what does that mean for historically brick and mortar retailers, and what will retail look like beyond COVID-19? The inaugural Future of Commerce report from Shopify highlights data-driven predictions that showcase the opportunity ahead for physical retailers.
Proximity will be a powerful and profitable selling feature for retailers
As consumer desire grows for alternative pickup and delivery options, proximity has the potential to become a retailer's most powerful selling feature. By the end of April, 26% of Shopify's brick-and-mortar merchants in English-speaking geographies were using some form of local pick-up or delivery solution, compared to 2% at the end of February. And there's a clear business impact: On average, from May to August 2020, online shoppers spent 23% more when choosing local pickup or delivery, and had a 25% bigger cart size. With a 13% and 19% higher conversion rate for shoppers who choose local pick-up or delivery, respectively, as opposed to traditional shipping, merchants should continue to tap into their local communities online.
Conversational commerce will drive sales and genuine connection with customers
In a time when in-person conversations are no longer the norm, chat has increasingly become a retailer's most successful method of replicating the offline experience online. Traditionally used for customer support, the pandemic has heightened the importance of chat as a marketing and sales channel, and we believe this will continue in 2021 as new consumer behavior solidifies. That outlook is confirmed by Shopify's own data: from March 16 to July 1, at the height of the COVID-19 lockdown, there was an 72% increase in conversations happening on Shopify Ping, our business conversation hub, between merchants and customers. And those one-to-one conversations were proving effective in increasing sales: shoppers who chatted with a merchant online were 70% more likely to convert and sales attributed to chat interactions increasing by 185%.
The in-store experience will continue to evolve
Consumer behavior has, and will continue to, change as we head into 2021 and new norms around shopping in-store are developed. Resilient retailers are looking to technology to meet customer needs. We know that 62% of consumers are more comfortable making in-store purchases with digital or contactless payments, and compared to the same period in 2019, the number of shops offering contactless payments on Shopify increased by 122% during the pandemic. Given that 50% of consumers would prefer to schedule appointments for in-store shopping, retailers will need to continue considering the creative ways to tailor the in-store experience.
Social commerce will become a more expected and necessary tool for retailers to thrive
Building a brand requires a presence in multiple channels. Social commerce-marketing and selling products on social platforms using content that feels authentic to the user experience-has become a must for retailers. It allows brands to engage with their customers while enabling authentic connection. Based on Shopify's recent research, we know that three quarters of our merchants plan to sell through some type of social media for the 2020 holiday season, and that younger shoppers are significantly more likely to say that they're going to shop via mobile phone (54% among 18 to 34-year-olds, 39% among 35 to 54-year-olds, and just 9% among 55+). TikTok, Facebook, Instagram and Pinterest are just some of the channels that enable merchants to reach new audiences.
It's clear that it's no longer feasible to consider commerce as operating in one arena or the other. For retailers to endure and meet shifting consumer behavior, they must engage with their customers wherever they are. Consumers want to shop independent, and businesses must adapt to make that easier. It's undeniable that retailers have shown great resilience during a difficult time for the industry-adopting an omnichannel strategy will allow them to continue to future-proof their businesses, and their livelihoods.
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