As the COVID-19 pandemic took hold, the Internet served as a critical lifeline as many of us turned to the safety of the online world. Even post lock down, the number of online businesses and commerce is steadily growing.
Shopping habits have been shifting away from physical retail and toward e-commerce for some time, but the COVID-19 pandemic has greatly accelerated this movement. It is estimated that the pandemic fast-forwarded e-commerce adoption by three years.
With 67% of consumers reporting that they shop differently now due to COVID-19, the digital economy boom will continue as consumers embrace the conveniences of at-home shopping.
Even in the current times of lifted social distancing and mask mandates reopened in-person retail shops, ecommerce sales aren’t slowing.
The popularity of online shopping extends to purchasing from online stores in other countries. The cross-border e-commerce market is growing at double the rate of domestic e-commerce, driven by consumers seeking brands or products unavailable in their home country.
Merchants continue to follow consumer demand online, flocking to ecommerce in record numbers. Online stores are popping up daily, with an estimated 12–24 million ecommerce sites across the globe. This means more brands competing for customers.
There have never been as many opportunities in the ecommerce space, nor has there been
as much competition. Because it’s so easy to start online now, there are definitely rising costs of customer acquisition. Supply chains, resources, and access to staff will remain constricted for businesses while consumer demand keeps going up.
As more businesses are online, it’s harder and harder to be found by new customers - the competition to customer acquisition during the ecommerce boom will not be determined on price, but on brand proposition. As customer acquisition costs have risen to enormous levels, it will be vital for brands to increase customer repeat rates and increase customer lifetime value.
According to Shopify's Consumer survey, Fifty-two percent of global shoppers reported to be more likely to purchase from a company with shared values. Consumers want to buy from brands that stand for something, brands that align with their personal beliefs - something that resonates with them because of geography, company values, or sustainability.
Given this, brands should focus on customer retention and lifetime value, especially as advertising costs and uncertainty continue to climb. Prepare to invest more in your customer communication, experience, and building a community that keeps customers coming back.