Online shopping is radically different from what it was a few years ago. Even those who shunned online shopping were catapulted into the digital world during the COVID-19 pandemic. This has resulted in a permanent shift in consumer behaviour. Many new converts to online shopping are less likely to return to brick-and-mortar stores.
With over 80% of the population shopping online, the United Kingdom is the world's third-largest online market behind China and the United States. But we even outperform these big economies with $4,201 per capita spending online, which is over twice that of China.
Source: https://www.websitebuilderexpert.com/blog/worlds-biggest-online-spenders/
Technology will remain the driving force behind these changes, and it will continue to evolve at a rapid pace. Shoppers have also become more sophisticated and discerning and will continue to expect more from retailers. Brands and retailers must stay ahead of the curve and implement changes fast if they want to remain relevant and keep up with the competition. Many are already exploring these trends and making plans to implement them over the next few years.
While the future of shopping is impossible to predict with 100% accuracy, we can make some educated guesses about what we believe will be the game-changing shopping trends that could shape the rest of this year and the future.
Contact Free Shopping
Contactless shopping isn't a particularly new trend. Contactless payments were introduced to the UK in 2007 with a card capped at £10, which was designed to pay for small items such as a coffee or newspaper.
While it was initially designed more as a solution for frictionless payments, the pandemic saw a significant increase in the use of contactless payments as people looked for ways to minimise physical contact.
This trend continues even after the pandemic as people have become accustomed to the convenience and will continue to use contactless payments for purchases. Spending limits have increased and, at the time of writing, stand at £100 per transaction.
Statistica estimates contactless payment is available on 83% of credit and debit cards in the UK; it won't be long until this is a standard feature on all cards.
As well as contactless payments, we are also seeing a trend for contact-free shopping experiences, where customers can shop with less interaction with shop staff.
Amazon's new cashier-less stores are a prime example of this. The first Amazon Go store opened in Seattle in 2018, and the company has since rolled out a number of these stores across the US. These stores use cutting-edge technology such as computer vision, sensor fusion, and deep learning to enable customers to shop without having to go through a traditional checkout process. You simply scan your phone on entry, pick up the items you want, and walk out; the charges are automatically added to your Amazon account.
Amazon recently opened their first "just walk out shopping" store in Ealing, West London, so we are sure to see more of them on our high street in the next few years.
While Amazon is the pioneer for cashier-less stores, you can be sure to expect other retailers to follow suit.
Social Media Shopping
We spend time on social media longer than ever. Statistica estimates that the average person spends an average of 147 minutes each day on social media. Obviously, any brand worth its salt will have a presence on these platforms and work on innovative ways to sell its products.
There's little doubt that the trend in social media shopping will continue to evolve and become even more user-friendly, with seamless checkout available from all platforms. User-generated content is likely to grow if we look at Go-Pro, one of the biggest brands on social media with 16.2 million Instagram followers; much of its content is provided by Go-Pro enthusiasts.
Another social media shopping functionality that is rising in popularity is social marketplaces. For instance, Facebook Marketplace allows the general public to list and sell items within their local communities. Facebook users shopping for bargains can discover items for sale, interact with sellers and make purchases within the Facebook app.
Just as with the early days of the Internet, when shopping online became the norm, we will become more comfortable with making purchases on social media and see even more brands making it their primary sales platform.
In addition, more people will be shopping on social media platforms without leaving the app, and we will likely see more social media shopping features emerge.
Omnichannel Retailing
Omnichannel retailing is the coordinated selling of products and services across multiple sales channels to provide a seamless and consistent customer experience. The key to successful omnichannel retailing is the integration of these various channels.
Each channel has its benefits and disadvantages. For example, physical stores have the advantage of allowing customers to touch and try products before they buy, but they are typically limited in terms of inventory. On the other hand, online stores have a more extensive selection of products but may lack the personal touch of a physical store.
By careful integration, retailers can create a unified customer experience that takes advantage of the strengths of each channel.
Though the Covid Pandemic resulted in more people shopping online than ever before, the importance of an omnichannel strategy has grown as we slowly return to some sense of normalcy. Consumers now want to visit stores and experience products in person again but still want the convenience of online shopping.
Pop-up shops are one method that businesses use omnichannel retailing to reach more customers. These temporary stores allow retailers to test new products and markets without making a long-term commitment. They can also be used to generate excitement and create a buzz around a new product launch.
Another way retailers use omnichannel retailing is by offering Click and Collect options. This allows customers to shop online and pick up their purchases at a convenient time at a local store.
Virtual Shopping
Some experts believe that the future of shopping lies in augmented reality (AR) and virtual reality (VR). These cutting-edge technologies have the potential to completely change the way we shop, giving us a more immersive experience.
AR can be used to place digital products into our real-world environment, allowing us to see how they would look before buying them. For example, you could use AR to trial different pieces of furniture in your home before buying them or see how a new outfit would look on you without even trying it on.
VR, on the other hand, can transport us into completely virtual environments. This could be used to give us an immersive product experience before buying it. For example, you could use VR to test drive a car before making a purchase or visit an exotic location without leaving your home.
Both AR and VR have the potential to change the way we shop forever. So far, they have mainly been used for gaming and entertainment purposes. However, as Its technology develops, we are likely to see more and more businesses using AR and VR to enhance the shopping experience.
The use of worldwide VR headset devices is expected to double between 2022 and 2026.
Source: https://www.emarketer.com/content/virtual-reality-headset-adoption
There are already brands such as IKEA, Amazon Salon, L’Oréal and Sephora that use AR and VR. Even social media has got in on the act with Snapchat's AR shopping. Snapchatters get a personalised AR experience when they hold their phone up to products in-store. They can see what products look like on them and click to purchase straight from their mobile phone. This makes it a fun, interactive and convenient way to shop. Just what the modern consumer is looking for!
Shopping with Cryptocurrency
There is some debate if the mysterious person or people known as Satoshi Nakamoto intended for Bitcoin to be used as a store of value or a transactional currency - at the moment the jury is still out.
In addition to Bitcoin, over 18,000 other cryptocurrencies are traded on exchanges. While some of these are used primarily as investments or for trading, some can be used to shop.
However, the adoption of cryptocurrency as a means of payment is still in its early stages, and not many places have yet accepted them. Nevertheless, the number of vendors accepting Bitcoin and other digital currencies is slowly increasing.
The main reason for the slow adoption is the volatility of cryptocurrencies, and businesses are unwilling to accept them as a form of payment because the currency's value could drop significantly by the time the transaction is completed. A 2022 Report from Checkout.com revealed that 40% of 18 to 35-year-olds surveyed globally intended to make payments with cryptocurrency. However, 50% still believed that crypto was risky.
One innovation that has recently seen the light of day is the Lightning Network. This payment rail operates on top of the Bitcoin network and allows for near-instant, low-fee transactions. This could be a potential win-win for both shopper and retailer as it would allow cryptocurrency to be used more efficiently as a form of payment. It would also save on the fees imposed by third-party payment processors.
At the Bitcoin 2022 conference, Jack Mallers, CEO of Strike, a global payment network that utilises the Lightning Network, announced that they have partnered with Shopify, Blackhawk and NCR to offer settled payments instantly and offer more privacy to the consumer. What's more, even though it uses Bitcoin technology, payments are not exposed to the bitcoin asset, negating the volatility risk. Payments are made and settled instantly in fiat currency while the payment rail works in the background to move the funds.
This is a significant development as Shopify is one of the largest e-commerce platforms in the world, with over one million businesses using its services. If even a fraction of these businesses adopt Lightning Network payments, it could significantly increase the use of cryptocurrency as a means of payment.
The figures above show that already crypto-consumers who use the Lightning Network shop more frequently than non-users.
NFTs
As more people become interested in cryptocurrency, they're also becoming interested in NFTs (Non Fungible Tokens) and vice versa. While NFT's primary usage has been as collectable art and in-game items, their potential goes well beyond that. One of their unique features is that they can't be duplicated or counterfeit, which opens up a whole range of new possibilities. This is why major retail brands like Nike, Adidas, and Louis Vuitton are experimenting with NFTs to boost loyalty and drive sales.
The possibilities for NFTs are practically endless, and we're just beginning to scratch the surface of what they can do. But what we do know is that they aren't just a craze or a fad. How they will change our shopping habits, online interactions, and much more in the years to come is anyone's guess. But one thing is for sure: NFTs are here to stay.
Driverless And Drone Delivery
In the not-so-distant future, it won't be surprising to look up in the sky and see a drone delivering your new shoes or handbag. Or for a driverless car to pull up outside your house with your grocery shopping.
We already take it for granted when an Amazon package arrives at our door within 24 hours, but delivery times will be even shorter when drones and driverless cars come into play.
Amazon is one of the leading companies exploring the use of drones for last-mile delivery. The company's Prime Air drones are designed to fly autonomously and deliver packages weighing up to five pounds. Amazon has been working on its drone delivery system for several years, and tests have already been carried out in Cambridge, with successful deliveries made to customers in minutes.
Once safety concerns and regulations have been ironed out, we expect massive growth in these delivery methods. The clear winners will be consumers, with online purchases being delivered even faster than before.
3D Printing
As well as being delivered by driverless cars and drones, your products could also come to you via a 3D printer. And this will be even faster. 3D printing is already being used to produce all sorts of items from toys and jewellery to kitchen utensils and even Dungeon & Dragon miniatures.
3D printing is ideal for small retail businesses that don't want to carry large amounts of stock or want to design and print their own products. They can print on demand as and when they need to. This will help them save on costs while still offering their customers a unique product.
For consumers looking for one-of-a-kind items that are impossible to find in stores, 3D printing is the perfect solution.
We've even seen 3D printed food become a reality, with companies such as Natural Machines, whose Foodini 3D printer can print world-class Tiramisu!
In the future, the cost of 3D printers will undoubtedly decrease, and the products that can be made with them will become more and more advanced. What can be printed will only be limited by our imagination.
Subscription Boxes
In recent years, subscription-based shopping has become increasingly popular, especially during the pandemic, with more people at home trying new products.
This trend has been driven by the millennial generation, who are used to getting their entertainment (such as music, TV, and movies) via subscription-based services such as Spotify and Netflix. This way of consuming content is now being applied to other areas of their lives, such as shopping.
Subscription boxes are curated boxes of products, usually delivered monthly, that are tailored to the customer's needs. There are subscription boxes available for almost anything you can think of, from food and drink to books and even sexy underwear!
Subscription boxes are one shopping trend that crossover into personalisation which we will discuss shortly. An example of this is subscription boxes that provide pet food that is personalised to your cat or dog's specific dietary needs.
If you are a fashion-savvy man you might have heard of ThreadBeast. This company offers a personal styling service, allowing users to fill out a questionnaire about their size, style, and budget preferences. The company then hand-picks a selection of items for each user, which is delivered to their door every month.
According to Barclaycards data, the demand hasn't slowed down post-COVID, with Brits spending on average £620 a year on subscription services.
Frictionless Shopping
We've already discussed many elements, such as contactless payments that come under the frictionless shopping umbrella. The goal of frictionless shopping is to make the entire shopping experience as easy as possible for the customer.
Think about all those times you've been in a store, queueing up to pay, or struggled to find what you're looking for. Frictionless shopping aims to remove all of these pain points and make shopping so easy that even the most unenthusiastic shopper will find the experience enjoyable.
Ecommerce giants like Amazon, with same-day delivery and in-app purchasing, have been leading the way in making frictionless shopping a reality. Voice assistants (which we will discuss shortly), such as Alexa, can also be used for frictionless shopping. Customers can add items to their online shopping cart by simply telling their AI assistant what they need.
The cliched term “the customer is king” has never been more true than it is today. Businesses that don't provide a frictionless shopping experience will quickly lose customers to those that do.
Personalised Shopping
Personalised shopping has been on the rise for a few years now. We've all seen the 'you might also like' and 'people who bought this also bought' suggestions on our favourite websites. Personalisation will only become more prevalent as artificial intelligence (AI) gets better at understanding our individual preferences.
Though it might seem a bit intrusive initially, shoppers have come to expect a personalised experience and will increasingly gravitate towards brands that can provide it.
In a future with unlimited shopping choices, an AI-powered personal shopper that really knows you could be your best friend. You won't have to trawl through pages of shopping results or feel frustrated that everything you're seeing is irrelevant to you. You'll save time and money and won't have to make do with online purchases that don't quite match your needs.
Ethical Shopping
If a product was ethically sourced or not was once an afterthought for many shoppers. If their coffee is fairtrade or their clothes were made in a sweatshop was something they rarely considered. But that's all changing.
Shoppers are now more aware than ever of the issues surrounding the products they buy and the companies they buy them from. They want to know that the products they purchase haven't been made at the expense of others or had a negative impact on the environment.
Statistics show in a 2021 UK Ethical Consumer Markets Report that from 2019 to 2020, ethical consumer expenditure increased by about 24%, bringing the total market size to £122 billion.
Price is no longer the primary concern for many shoppers – they would rather pay a little more and have peace of mind that the product they're buying is ethically sound.
This trend is being driven by millennials and Gen Z, who are increasingly socially and environmentally conscious.
Researching the supply chain of products is much easier now. New technologies such as blockchain are making it even easier to track the provenance of products and ensure they are ethically sound.
Many brands are already responding to this trend by providing more information about their products and supply chains and increasing transparency around their business practices.
Source: https://www.weforum.org/agenda/2022/03/generation-z-sustainability-lifestyle-buying-decisions/
As we can see from the chart above sustainable products are more important than the brand name of the product across all generations.
Just as we now have apps to provide nutrition and calorific information for food products, the future of shopping could also see apps that provide ethical information for products. So, if you're looking to buy a new shirt, you could simply scan the barcode and find out where it was made, what materials were used and whether the workers were treated fairly.
Rent to Buy
With house prices skyrocketing, fuel prices rising, and the cost of living increasing, many people can't afford to buy. They rent their homes and use disruptive technologies like Uber to get around.
Millennials and Gen Z are less attached to material possessions, value experiences more, and some prefer renting to buying. They can choose to rent furniture, clothes, games consoles, home appliances, and tools instead of buying them outright.
Renting can be more cost-effective than buying, especially for high-end items that often depreciate quickly or require frequent upgrades (such as gaming consoles).
Finally, many people appreciate the flexibility that renting offers. If you move to a new city or simply want to change up your style, it's easy to return rented items and get something new. In an increasingly changing world, the ability to try new things without making a long-term commitment is more important than ever.
Voice Shopping
We've talked about frictionless shopping already, but there can't be anything easier than voice-assisted shopping using technology such as Amazon Alexa, Google Assistant or Apple Siri.
The convenience factor is the main reason why consumers are drawn to voice shopping. With our hands full and our schedules packed, being able to shop hands-free is appealing to many. Voice assistants can reorder your grocery list or add an item you need to it without fumbling for your phone or opening up an app.
Voice shopping also has the potential to be much faster than traditional methods. Once you've added your payment information and shipping address to your account, all you have to do is tell your voice assistant what you want, and it will be on its way.
The AI powering these devices has improved exponentially in the past few years, to the point where they can now handle complex queries. And as the technology continues to develop, we can expect even more people to start using voice assistants for their shopping needs.
The Future of Shopping Centres
As the Pandemic dragged onwards, we witnessed a retail apocalypse for many of the stores that once densely populated our shopping centres. Empty storefronts were a common sight, and some even questioned if the shopping centre as we know it was dying.
However, even before the Covid-19 virus, online shopping had become the method of choice for many consumers, with the Pandemic only expediting this trend.
So what is the future for shopping centres?
People are now used to working, shopping and spending time at home, cooking or getting takeaways rather than eating out, and watching Netflix instead of going to the cinema. This social upheaval has had a knock-on effect on how people will want to shop in future.
Shopping centres must work hard to attract customers and capitalise on what makes them stand apart from online transactions, which comes down to providing an enjoyable, social and entertaining experience.
Experiential retail is one area that could see a resurgence, with stores offering more interactive and hands-on experiences to lure customers in.
We are also likely to see a move away from traditional high street stores to smaller local businesses that can offer a more personalised service or provide products that are not available online.
The Future of Couponing
Couponing had its big break when the advent of the internet allowed for easy sharing of coupons and other deals. From there, it grew into a vast industry, with coupon and deal sites becoming household names. According to Blipper, newspaper coupons are preferred by only 10% of shoppers, with mobile phones being the preferred choice to receive coupons for over 90%.
We see no reason to see a decline in the popularity of couponing and discount sites. Who can resist a great deal on their favourite fashion brand or restaurant?
We will probably see more innovative uses of coupons, such as geo-targeting, where deals are sent to shoppers based on location. Also, we may see an increase in the use of digital wallets which store coupons and can be used at the point of sale.
Couponing sites will become more sophisticated and use better technology to find the best deals for their users. They will also become more user-friendly and easy to navigate.
In Summary
So there you go, there's no getting away from it, the future of shopping is exciting! We will see continued focus on sustainability, more personalised experiences, and even greater use of technology to make shopping easier than ever before. What's not to love?
We've only likely scratched the surface of the possible shopping trends that will emerge over the next few years.
