The coronavirus pandemic has caused retailers to retool their operational, merchandising, and marketing strategies to align with consumers’ changing habits and accelerating online shopping trends. When things return to normal, the realignment of retail will have lasting effects.

With the worst of the pandemic in the rearview mirror, we expect the US consumer economy to show signs of progress in 2021. Total US retail sales will grow 2.3% to $5.630 trillion, up from a 0.8% projected 2020 growth rate.

Online shopping will be a pivotal part of retail’s recovery - Insider Intelligence
Online shopping will be a pivotal part of retail’s recovery Insider Intelligence

Insider Intelligence has rounded up five online shopping trends that will drive this growth in 2021 and beyond.

D2C brands riding the online shopping trend will face stiffer competition from legacy brands

D2C brands have been the darlings of ecommerce over the past few years, but their quest to achieve the escape velocity needed for mainstream adoption is encountering increasing resistance. Established brands aren’t taking this disruption lying down, and they recognize developing their own D2C strategies as a new imperative. Nike is a prime example, leaning heavily into its Consumer Direct strategy. By the end of 2020, D2C sales will account for 33.1% of Nike’s revenues. With incentives pushing established brands to advance their D2C strategies, next year’s landscape will be more competitive.

Click-and-collect momentum will drive market share gains for big-box retailers

In early 2020, as logistics networks furiously expanded their capacity to support the ecommerce demand shock, online delivery windows were scarce and delays were inevitable. Click and collect—and particularly curbside pickup—helped plug the gap for millions of consumers. Though the pandemic created the impetus for the behavior, it will carry forward into the future. A 2020 Deloitte study asked respondents, in both April and September 2020, their reasons for adopting click and collect. In April, the top reason cited was “safer” (48%), followed by “faster than shopping in-store” (34%) and “less stressful” (33%). By September, the top reasons were “safer” (35%), “cheaper than delivery” (33%), and “faster” and “less stressful” (both 32%). As safety concerns subside, it’s easy to see how the cost and convenience dimensions will persist.

Grocery ecommerce gains will evolve from trial to habit formation

Grocery has undoubtedly been the ecommerce category winner of the pandemic and one of the most explosive online shopping trends. As widespread shelter-in-place mandates kept people at home and out of physical stores, tens of millions of US consumers became online grocery buyers for the first time. Food/beverage—the least penetrated ecommerce category—saw the biggest growth in 2020, with sales surging 74.0% to $45.47 billion. More importantly, the pandemic has pulled grocery ecommerce at least a year into the future. We now expect grocery ecommerce to reach $47.96 billion in 2021, ahead of the level we originally anticipated for 2022.

Media and commerce will converge as checkout attaches to shoppable content

D2C brands understand that social media’s prowess in rapid audience aggregation and brand discovery made it an unusually efficient vehicle for this. Now these platforms are trying to help brands close the loop on purchase. Facebook, Instagram, Pinterest, and Snapchat have all recently introduced features allowing retailers to upload their product catalogs to make discovery even easier. 

Several platforms—most notably Instagram—also integrated checkout experiences (supported by Shopify for payment and logistics) to streamline conversion. This has driven a clear shift in social commerce purchases. According to CivicScience, the percentage of US adults who have purchased products directly on social media has nearly doubled over the past two years—from 13% in Q4 2018 to 25% in Q3 2020. Much of this activity resides on social media platforms currently, but where it goes next may be even more interesting. 

Premium subscriptions will drive cross-channel loyalty for leading retail brands

Every retailer wants its own version of Amazon Prime—a high-margin, recurring-revenue loyalty engine. In 2021, several retail power brands will succeed with premium subscriptions that will result in market share gains and profit expansion. The most obvious Prime “competitor” is Walmart+, the $98 per year subscription featuring benefits like free two-day delivery for ecommerce orders, gas price discounts, and scan-and-go capabilities to skip in-store checkout. According to August 2020 research from Tinuiti conducted by Survata, 50% of US Amazon Prime members said they would sign up for a Walmart loyalty program while keeping their Prime subscription. Just 6% said they would sign up and cancel their Prime subscription.

The spotlight might be on the Amazon Prime vs. Walmart+ battle at the moment, but there are more memberships taking shape. Brands like Nike, Lululemon, and Disney are experimenting with the right value exchange for their own subscription offerings. But it’s clear that they’ll be able to parlay strong brand affinity, in-demand products, subscription media, digital assets, and physical experiences into attractive bundles.