Online retail trends that are shaping the future

Trends can be a tricky metric to measure and predict the direction an industry is headed. A lot of the data can be disparate, outdated and hard to unify. Yet, there are apparent changes that can help you get an idea of the dramatic shifts that are happening in online retail.

Keeping track of where the industry is going can aid you in deciding what business model works best for you. In this article, we’ll break down some of the top online retail industry trends that are shaping brand decisions and customer experiences.

Industry trends that are shaping online retail

Customer-focused over product-centric

Online retail is hardly successful without customer-based marketing. We live in a digital age where the gap between customers who use a certain app compared to others is consistently growing. Not everyone who still uses Facebook is active on Instagram, and vice versa. 

If you cater to a wide and varied demographic composed of multiple segments then your online retail marketing strategy has to be versatile and accommodating. You cannot limit yourself to just one platform when your customers are spread out across several others.

On the other hand, if you’re catering to a niche market, you need to research the right online spaces to find them as well as the right time to target their feed. A tweet during office hours is hardly going to accomplish what an attractive email can do during the evening commute back home.

Customer data – access and availability

AI and ML tools that collect, store, evaluate, and consistently churn out insights on customer behavior are already on the rise. Algorithm-based learning and customer data platforms are already a big part of many brand marketing strategies. 

Innovations in analyzing customer behavior and predicting customer preferences, tailoring the customer journey, and appealing to them are what future marketing is all about.

This is also one of the advantages that online retail has over in-store shopping. Customer behavior such as products they look for, past purchases, and other data points are not as visible and readily available with an in-store purchase as it is when they shop online. 

Tailoring a personalized customer journey is also much easier online, where targeted messaging and individual interactions can take place uninterrupted. A busy and crowded store, on the other hand, is a place where it’s easier to overlook certain customers in favor of others, and many crucial details regarding the customer are unknowingly missed.

Personalization drives customer retention and revenue

AI-based platforms now enable brands to keep track of each customer, from their history to which stage they are at in their buying journey. This is incredibly useful when tailoring personalized marketing campaigns for each segment based on what they like and what appeals to them the most. Brands are also able to improve the suggestions they make and get to know more about customer’s preferences in a limited window of time.

Marketing for retail is no longer going to be chaotic, disorganized or ineffective. At least not when you’re selling online. Customers value their privacy, but they also need personalization. Shoppers are willing to voluntarily offer personal information in exchange for getting tailor-made and improved buying experiences.

Privacy and personalization: striking a balance

Not all customers are the same. Some are more inclined to have an open-minded attitude toward data privacy. Others are not so trusting. As brands begin to intrude upon personal spaces and leverage deeply personal information for marketing ploys, many customers would rather choose to opt out than join in. This means there could be a dichotomy of customers who enjoy the experience of ultra-personalized shopping while others do not. Online retailers might have to keep track of and stay updated on the latest legislation regarding data collection in their respective localities. 

Automated bot assistance to optimize staff time

Most of your customer queries can be repetitive. This means that an automated response may suffice and you wouldn’t have to waste the valuable time of your sales support team in helping customers with basic instructions. Chatbots are a great tool to give customers the quick and brief details they are looking for without losing them to competitors who offer better and more supportive service.

Mobile devices dominate

One of the biggest and often overlooked trends with online retail is that most of the shopping takes place on the phone. Customers love the convenience of browsing through a compact screen, taking calls on the go, and paying from anywhere.

Most of the B2C retail transactions are made on smartphones compared to any other device. Businesses often prioritize optimizing their websites and payment portals for desktop viewing, while paying minimal attention to mobile shopping. It should be the other way around. Most B2C conversions are channeled through everyday customers. A majority of them have access to and frequently use their smartphones to chat, call, and transact, more than any other device.

This is not to say personal desktop systems are becoming outdated, which is far from the truth. Rather, it is the simple fact that B2C sales and shopping are better suited to take place within the comforting confines of your phone’s screen than anywhere else.

Omni-channel payment modes

As more payment providers emerge, retailers face difficulty navigating which payment gateway to choose. Most businesses have found an easy and quick fix for this. It’s called omni-channel. You’d be allowing your customers to pay through any method or mode they prefer.

Customers aren’t willing to change their entire method of payment just for the sake of shopping at your online store. This leaves you and many other online sellers with only one choice: allow them to pay however they want. 

The added convenience of paying through your preferred provider and gateway helps you give customers a quick, seamless and highly convenient checkout experience. Customers would prefer to shop at a store that allows them to buy and pay within seconds instead of waiting and wasting time for the transaction to get processed.

Businesses that invest more in fast-processing payment portals will find that it does have a huge impact on customer experience, and thereby on overall sales as well. 

Brands are looking into ways to normalize easy payment methods even further, with digital wallet services, credit options, BNPL offers, and more.

The in-store experience made virtual

Customers normally prefer the in-store shopping experience. Nothing compares to seeing the product live, holding it between your fingertips, and figuring out how it works. But a lot of that can change with AR – the augmented reality software that offers a virtual, simulated experience of handling the product you’re shopping for from the immediate comfort of your home.

While the technology hasn’t caught up yet, we may well expect this to be an ingenious way to gain customers from every corner while sparing them the hassle of in-store visits, unless otherwise necessary.

The main consideration for AR tech is the slow-paced innovation that’s happening in the industry combined with the potential cost it would take to implement something this momentous. The bigger brands would have to try it first before small-to-mid-size businesses can get a chance since viable options for reliable AR might take a while to go mainstream.

Visual marketing is in vogue

Engaging customers visually is becoming the norm. From reels to shorts, the range of opportunities where brands can leverage short-form video marketing is huge and growing. Furthermore, their use isn’t limited to getting customers interested in a product or service. It goes beyond that.

Brands can leverages viewership metrics to track engagement and conversions so that they can have a clear picture of what works and what doesn’t.

Subscription-based model for retention

Subscription-based models, even for retail businesses, are an innovative way of allowing owners to plan their inventory. It is also convenient for customers who value the experience of choosing when to opt-in and opt-out. 

Speech-based shopping

Typing out the product you’re looking for can be exhausting when you’re on the run. So, voice assistants are already taking over. The inclusion of intuitively functioning voice search options is the ultimate endpoint for game-changing convenience. 

Customers are already familiar with Alexa, Siri, Google Home, and other big-brand personal assistants. Shoppers in a hurry and on the go could benefit tremendously from a well-adapted search option, which would also give brands the extra edge they’re looking for. 

Adopting eco-friendly initiatives for brand survival

Persistent activism and environmental awareness among the customer base has to lead to brands taking initiative that are pro-sustainable. Legislative measures combined with customer attitudes are forcing retailers to rethink how they package their products. 

Whereas non-bio-degradable options are often the most easily affordable both to produce and package, you might have to consider going with recyclable, reusable, and bio-degradable packaging alternatives. 

Same-day delivery to give local sellers a push

From small-scale grocery stores to high-stakes supermarket chains, many retail owners are integrating delivery into their business models to maximize customer retention. More than one-third of shoppers are online and highly appreciate the convenience that comes with on-time delivery. 

The possibilities of online selling are growing exponentially. From capturing new customers to opening up new outlets, retailers are witnessing sales like never before.

Same-day delivery is allowing local retailers to outpace and gain an advantage over some of the biggest retail giants. Customers would rather shop local and get their products instantly delivered from their nearest store instead of waiting days for them to arrive. The pandemic has accelerated this trend, bringing factors of scarcity and availability to the forefront. Local retailers with an online presence are now able to compete with eCommerce giants like never before. 

When you’re able to promise local shoppers same-day delivery, it naturally leads to higher sales as customers would prefer the convenience of getting all their products from one spot rather than spending time moving from one store to the next. 

At the same time, as we mentioned before, online retailers should also be willing to offer customers their preferred modes of fulfillment from in-store pick-up to same-day delivery. 

The rising potential of multi-channel marketing

Omnichannel marketing and sales are best not only for revenue but also for retention. The most persistent challenge that brands face in this day and age is not gaining customer attention, but retaining it. It isn’t converting customers, but rather turning them into regular shoppers. This is only possible when the brands invest the time and effort it takes into giving customers a memorable and satisfactory experience that goes beyond just the product. 

Several businesses have shifted their focus from researching better product features to finding customer preferences. It is not so much what can be added to the product, but what the customer loves about the product in the first place.

However, retailers are also being forced to consider that customers flexibly switch between different channels while shopping. Eg: a customer might shop and buy online while opting to pick the product up from the store directly. Customer convenience factors heavily into deciding how you configure your omni-channel retail experience. Either way, retailers must be willing to accommodate and allow for this type of customer transition from one channel to the other without disruption. 

Digitizing records in their entirety, automating updates upon pick-up and delivery, as well as live delivery tracking, are a few ways retail stores can run sales without running out on inventory or overstocking

As we mentioned in the previous blog, online retail may not be the easiest way to do business, but once you get the hang of it and are willing to change according to industry shifts, it can be extremely rewarding.

Automation to solve staffing challenges

Staffing for manual tasks used to be a headache for most retailers in the past. It was difficult to find willing employees to consistently stay in a job that involved basic tasks like entering data, filling and filing paperwork, printing receipts, and handling the cash register. Job openings in retail businesses were just as easily vacated as they were filled.

Automation software has been a huge game-changer in this industry. From billing and checkout to inventory, retail can digitize and automatically update their data without having to rely much on the error-prone capabilities of manual staff.

As the industry evolves in step with innovation, retailers may find that most of the jobs that they would generally resort to manual labor for can be automated by software that will cut costs down immensely. This is what makes the future of online retail look promising. 

Even existing software users need to consider upgrades and replacements for what might be dated tech. If you’re an online B2C business owner or start-up, it costs to be tech-ignorant and it pays to be tech-savvy, especially in this day and age.

Heavily engaged customer base

More than half of the retailer’s revenue is acquired online. Leads are funneled in through social media platforms on a much bigger scale than ever before. The sheer volume of marketing that happens on a day-to-day basis is unprecedented when compared to a decade ago. They also encourage a cycle of shop, rate and review so that customers are constantly engaged.

Interactive shopping – no longer a distant possibility

Live-stream shopping and VR-enabled stores aren’t technically “real” yet, but brands are more willing to experiment with these options as digital spaces evolve and dominate customer attention. We may well be entering a wholly new and exciting world of interactive shopping.

Industry hybrids normalized post-pandemic

Defining retail as an industry and relegating it to any specific type of business, like a convenience store, is no longer possible. We’ve now seen multiple industries slowly make their foray into retail markets, selling branded items and capitalizing on their existing customer base. 

On the other hand, many conventional retailers are adopting add-on digital services alongside their original venture, catering to clients who come to shop and get interested in what they have to offer.

Pro-community and locally conscious brands on the rise

Building trust is a team effort and a two-way street. Many retailers recognize that familiarity is often the key driver behind buying choices. Several brands are beginning to adopt initiatives that help them become entrenched in the communities they are based in, organizing events and donating to local causes. 

This ground-up and heavily localized effort eventually pays off as customers grow accustomed to the brands that are easily accessible as well as the ones they know, trust and recognize, preferring them over the ones they don’t.

How do you evaluate whether a trend is relevant to your business?

We’ll guide you in deciding which trend is worth investing in, especially when your business might not be operating on the level of a large-scale enterprise, yet.

  • Keep track of leading publications related to your industry, and find conventions where like-minded business owners like yourself can gather to discuss growth opportunities.
  • Learn from your competitors first, so that you can do better later. There is no monopoly on growth. Sometimes your rival business may catch wind of a trend well ahead of you and act accordingly. The smart thing to do is to learn how their strategies are helping their growth.
  • Customer data, however limited and small in scale, is still highly useful. It gives you insight into who your customer is and also who else could be. Implement forms and instruct employees to request voluntary customer data, where you can cater to them online and offer a better experience shopping from your store.
  • Not everything the customer says is right, and not all feedback is valid. However, there’s something wrong if you’re running your business based on a complete lack of feedback. Be open and attentive to how your customers are responding to your products as well as the experience of buying from you.

The Bottomline

The scale at which retail as an industry continues to evolve is exciting. At the same time, it offers a whole new set of challenges for businesses, both new and existing. As the landscape changes to fully integrate more digital, virtual, and ultimately less expensive selling methods, we must not forget that the initial costs of setup may be high. Nevertheless, this shouldn’t detract new entrants to this space when they consider the opportunities that abound, especially for those who are starting anew.


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