With what is expected to be one of the weirdest Peaks ever now well and truly underway, it is time to take a look at some of the weird and not-so-weird ways in which retailers, brands and merchants across Europe are looking at driving growing in 2021 and beyond.
So, with 2021 looming and peak up and running, what are some of the key growth vectors to look out for in the months ahead?
Cross-border
The biggest opportunity for online growth now and into 2021 lies in trading cross border. Research by Forrester on behalf of payment company Stripe finds that some 57% of the 495 retailers surveyed across Europe plan to expand to other countries in 2021.
The trend is already happening, with a separate study by eShopWorld (ESW) finds that international online store sales have increased 88% in the first two weeks of November, compared to 2019.
While Brexit may make planning expansion into Europe something to be considered carefully, there is already a burgeoning market for UK brands in Asia, as proven by this year’s Single’s Day.
According to ESW, international brands are highly sought after by consumers across Asia-Pacific, with two thirds (66%) of consumers stating that they shop from international retailers. Almost three quarters (73%) said that they choose to do so for a wider selection and faster access to new products. Of those who shop internationally, over a third (38%) prefer to shop from Chinese retailers, followed by the United States (26%), Japan (20%) and South Korea (15%), with 12% saying they preferred UK brands.
When discovering new brands, 64% of APAC consumers do so through online search, followed by paid social, and recommendations from friends and family. Influencers and bloggers also play an important role in the discovery of new products.
How to expand cross-border needn’t be as hard as you think, either. As we explored earlier in our Growth Post-lockdown series, if you can look at where your traffic is coming from and identify new markets you are off to a flying start. Understanding the customs, practices, taxes and languages of that market is also vital, as is customer experience. Once you have that down you are good to go.
For many retailers it is somewhat organic, with traffic and sales already starting to come from overseas as the number of online shoppers blossoms.
Marketplaces
One way to expand overseas without much of the risk and investment, or to just test the water, comes from using marketplaces.
Localised marketplaces are the ideal on-ramp for growth. Even if you are competing against similar products or other merchants, the savings you can make by letting the marketplace handle logistics can make it worthwhile.
The ideal situation is to use marketplaces to build on sales that are starting to come in from other markets. Recent studies show that internationalisation of shopping is in fact one of the drivers of the lockdown boom on online retail. Capitalising on this has always been a key to growth, but now more so than ever.
You may be seeing organic search bringing orders from distant shores: if you think that there is steady enough flow of these then it is worth exploring – and doing that with a marketplace can be the most cost-effective way to do that.
All the competition and cost issues apply, but it way well still open up enough of a new market to build on. It opens the door.
And marketplaces are really driving sales in lockdown. OnBuy.com, for instance, has reported an all-time record-breaking week with nearly 1.5 million users browsing the site, resulting in nearly £2.75 million in sales between November 1 and November 8.
The UK-based eCommerce site has only just turned four years old – and is about to turn its attention to a global audience, rolling out into over 140 additional countries over the next three years.
As the UK entered the second nationwide lockdown, OnBuy saw a dramatic rise in users as shoppers scrambled to prepare for a month at home with no physical access to non-essential retail. Compared to the same period last year, users on the site increased by over 600% and sales revenue increased by an outstanding 837%.
Sustainability
Sustainable retail has also moved right up the agenda – driven almost exclusively by consumer demand.
The pandemic has caused a big shift in consumer behaviour, with more than a third (36%) of UK consumers saying that they’re buying products from companies with strong environmental credentials, according to E.ON’s Renewable Returns report.
A further four in five (80%) say they are planning to purchase goods and services from businesses they know have made a concerted effort to be environmentally friendly.
The research confirms that Covid-19 has radically changed consumer purchasing habits and that concerns about the environment are becoming more important in persuading people what to buy – and who to buy it from.
Of the consumers surveyed, 72% said they pay attention to whether a business acts in a climate-friendly way, and 65% feel it’s important the products or services they buy do not harm the environment.
Consumers are willing to pay a premium, too. The research shows more than a third (34%) of people have already knowingly paid more for ‘green’ products since the pandemic struck and more than half (51%) think the environmental credentials of a product or service are now just as important as the price they pay for it.
Many retailers are buying into it. Dixons Carphone, New Look, Marks & Spencer’s, Sainsbury’s and Morrisons to N Brown Group, Wickes and Wilko are backing a new British Retail Consortium-led plan to reach net zero carbon emissions by 2040. The BRC’s Climate Action Roadmap, supported by 63 retailers, aims to see stores and warehouses powered by net zero electricity by 2030.
However, according to GlobalWebIndex’s annual ‘Connecting the dots’ report, compiled from 700,000 interviews across 46 countries, while the first wave of lockdowns had the unexpected upside of starting this new chapter in the relationship with the environment, any gains look set to be wiped out as normality returns. Cynicism is also set to make a comeback.
Consumers have gone from seeing a bright future ahead to feeling pessimistic – and this backlash will ensure green values are a hot topic through 2021 and back on top of the agenda.
Invest in agility
One thing all retailers now agree on is that they need to be agile. The coronavirus pandemic has seen retail change dramatically in just a few short months – cramming some five years of change in less than a year.
To meet this demand and thrive, retailer growth strategy has to not only offer consumers what they want now, but also needs to see retailers invest in strategies that will carry forward into whatever comes next – and that may be unknown right up until the change occurs.
According to the Forrester/Stripe research, a majority of businesses (56%) have made it a critical or high priority to speed up their ability to respond to such changes. 51% of respondents say they are considering adopting a new business model, such as a subscription service, over the next eighteen months.
As we have seen, the pandemic has pushed online retail to grow massively. This has driven more use of mobile web and apps; it has also seen shoppers turn to new ways to shop online, including social media platforms, marketplaces of every stripe, cross-border and video. It has also pushed a drive to be more sustainable, with consumers wanting the brands that they deal with to be environmentally friendly, especially the delivery.
What comes next is anyone’s guess: voice devices combined with video and social? YouTube becoming a retail platform? All physical retail stores becoming omni-channel fulfilment and UX centres? Who knows? What is certain is that retailers need to be looking at how what they are shifting to today can leave them agile enough to embrace these new and rapid changes that are certain to play through 2021 and beyond.
