Customers Want to Shop Independent Businesses, According to New Survey
The Future of Commerce 2021, Shopify’s first annual report, marries global merchant and consumer data to predict how the commerce landscape will shift in the coming year — and how small and independent businesses are creating a new retail reality.
By examining perspectives of both seller and buyer, it aimed to capture the full picture of the industry to make predictions that span commerce in its entirety —from shopping habits of consumers around the world to the evolution of running, marketing, and funding an omnichannel business today.
Analyzing data from its more than 1 million merchants around the world and insights from their customers, the report reveals five key predictions for businesses in 2021 and beyond. They include:
1. Young consumers will change the business landscape as e-commerce charges ahead.
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84% of consumers have shopped online since the pandemic; 65% have shopped in-store.
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79% of consumers say they will shop online regularly in the next six months; significantly fewer (57%) say they’ll shop regularly in store.
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67% of younger consumers (18-34) shifted more of their spending to online shopping since the pandemic was declared, compared to the 54% average.
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Brands should pay attention to the habits of younger consumers as they lead the shift to ecommerce, especially because they are more likely to:
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Discover and shop via social media
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Prefer to shop for sustainable and green products
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Shop to have an impact
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2. Physical retail as we know it will transform, giving local businesses new advantages.
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By adapting to consumers’ changing shopping habits, Shopify retail merchants replaced 94% of in-store Point of Sale (POS) sales lost in the first six weeks of the pandemic with online sales.
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Some of these new strategies and technologies resilient retailers adopted and will continue to offer include:
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Contactless payments: Compared to the same period in 2019, the number of shops offering contactless payments on Shopify increased by 122% during the pandemic.
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Alternative pickup and delivery options: Among those who used alternative fulfillment methods, over half did so more often in the past six months than before the pandemic was declared. These include:
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Local delivery: 57% of consumers are receiving items through local delivery more often than before the pandemic was declared.
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Buy online, pick up in store (BOPIS) or curbside: 64% of consumers are using BOPIS or curbside pick up options more often than before the pandemic was declared.
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Pick up point: 57% of consumers are using a pick up point option more often since the pandemic was declared.
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3. Consumers want to shop independent. Businesses will adapt to make that easier.
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Half of consumers (50%) look for independently owned businesses to support for reasons including: supporting entrepreneurship, buying unique products, and experiencing good customer service.
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Consumers’ intentions to support independent businesses are not yet reflected in their purchasing habits. However, this may change:
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62% purchased from marketplaces since the pandemic was declared, while only 55% say they’ll do so regularly in six months’ time.
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57% of consumers are willing to shop at new brands or stores for the first time.
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Independent retailers should highlight the benefits of their business models and adopt features offered by large retailers to meet consumer needs, including shoppable social media. At the start of the pandemic from March through April, marketing on Facebook and Instagram via Shopify’s channel integration saw 36% growth in monthly active users — a trend that continues to rise.
4. More consumers will vote with their wallets.
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53% of consumers prefer green or sustainable products.
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49% of consumers respond positively to retailers making a donation to a cause with each purchase.
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23% of consumers shop at local or independent retailers to reduce their environmental impact.
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Consumers’ main reasons for shopping at a locally owned business (online or in-store) include:
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Strengthening the local economy (57%)
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Helping support local job creation (41%)
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Investing in their community (35%)
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5. Modern financial solutions will disrupt business and consumer banking, financing, and lending.
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More businesses are accessing capital outside of traditional banks: Across the US, Canada and UK, cumulative funding from Shopify Capital reached approximately $1.4 billion at the end of September.
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Buy now, pay later has grown in popularity: The number of Shopify merchants who offer buy now, pay later has increased by 60% since the start of the pandemic.
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In the US, millennial fathers are the most frequent users of buy now, pay later, particularly when spending on high-priced items like electronics.
To download the full report and explore the Shopify findings and predictions, visit the Future of Commerce landing page.
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