SERIESSoDA Series Perspectives on leadership, design, culture and emerging trends from the Society of Digital Agencies; a global community of pioneering and renowned agency founders, creative visionaries and technology disruptors. Learn more.→ XD Ideas / Perspectives / SoDA Series / Ecommerce Trends 2021: Innovation Amid Rapidly Changing Customer BehaviorEcommerce Trends 2021: Innovation Amid Rapidly Changing Customer Behavior Illustration by Jessica Ongko Oliver Lindberg Oct 1, 2021Ecommerce is a fast-growing, fast-evolving industry anyway, but the COVID-19 pandemic significantly accelerated this transformation – some say by as much as 10 years. According to Adobe’s Digital Economy Index, global online sales are expected to reach $4.2 trillion this year. The U.S. accounts for close to one-quarter of that spending, and in March alone – in the wake of the American Rescue Plan – consumers spent an extra $8 billion online. Two years ago, just 13.6 percent of worldwide sales were made from online purchases. In 2021, it’s thought to go up to 19.5 percent, even while brick-and-mortar businesses are reopening – a 45.8 percent increase in ecommerce market share over two years (source: Shopify). What’s especially striking is that a big part of the growth, which is set to continue, comes from new shoppers. Adobe found that 47 percent of U.S. consumers had never bought certain types of items online before, while 9 percent said they had never purchased anything online at all before March 2020. These new ecommerce customers are likely here to stay. “As ecommerce sales continue to explode, there’s a growing need to make the virtual product experience as real as possible.”To find out how the industry is innovating during this record expansion, we spoke with five design leaders from the Society of Digital Agencies (SoDA) in the U.S, Europe, and Australia. Here we highlight what they believe to be the most important, and exciting, shifts in ecommerce shaping how we experience online shopping now and in the future. “As ecommerce sales continue to explode, there’s a growing need to make the virtual product experience as real as possible,” said Tom Beck, executive director of SoDA. Here are a few examples of how emerging technologies are going mainstream:Switch to photorealistic 3D designThe benefits of photorealistic representations are vast – replacing product photography with 3D visualization removes the need for expensive live photoshoots and replaces environmentally wasteful physical samples. Pull in a little AR allowing customers to virtually try on, or view in place, these 3D rendered items, and you have a fully virtual commerce experience. INDG’s photorealistic 3D renderings for New Era Caps, created in Adobe Substance, replace existing 2D illustrations when the physical products do not yet exist (for more, read Creative Disruption: Fashioning the future with 3D Design).Enhance customer interaction with augmented realityPreviously mostly used for high-end or niche experiences, augmented reality is now also transforming online shopping – and not just for high-end purchases, for more low-cost purchases too. Customers can now find AR tools in home decor, fashion, cosmetics and even on food sites. AR offers consumers the opportunity to visualize their purchase – in room or on person – ahead of hitting that buy button; ultimately helping customers feel more confident in their purchasing decision and minimize returns (as well as positively impacting carbon footprints). Build in Amsterdam has partnered with international lifestyle and design company Moooi to deliver added business and customer value using AR. Build employs both AR and voice search on Moooi’s fully accessible multi-sensory shop to help customers assess products (some of which have extravagant dimensions) without having to travel to a physical showroom. A product configurator for a part of Moooi’s catalogue enables customers to view furniture in 3D and create custom-made products tailored to their needs and preferences. And, as industry fairs and physical exhibitions were cancelled during COVID-19, Build in Amsterdam created an imaginary showroom for Moooi: A Life Extraordinary, helping overcome the cancellation of Salone del Mobile, one of the company’s major sale events. AR is also being used to drive fun brand experiences as you’ll see in this partnership with Pizza Hut. Tool of North America teamed up with Pizza Hut for an AR experience that transforms a pizza box into classic arcade game Pac-Man.Go contactless with NFC-technologyAlready widely used for contactless pay options at brick-and-mortar checkout stands, during COVID-19 Near Field Communication (NFC) as well as QR codes rose in popularity as customers became more conscious of what they touched. NFC is increasingly being explored for contactless ways for customers to interact with products, for example to get product information, read reviews, and connect to social media. Build in Amsterdam went one step further: The agency recently enabled Moooi customers to ensure they are buying an authentic product. As counterfeits are multiplying, the team created an NFC-chip called The Button to place on Moooi products, which acts as proof of authenticity. Set brands apart with immersive storytellingTo make ecommerce sites stand out and showcase products at their best, agencies increasingly turn to storytelling techniques. Storytelling helps create interest around a brand or a product, attracts customers and moves them through the purchasing cycle. Ensuring the ecommerce experience is consistent with the story the brand or the product is telling is essential to building a long-term customer connection. If customers feel an emotional attachment to something they are more likely to care about it, as well as share about it. “It’s one thing to simply get visitors and potential customers to your site, but it’s quite another to persuade them to buy,” points out Eric Fowles, founder and CEO of full-service design agency Voltage in Louisville, Colorado. “To achieve that, you need branding and immersive storytelling as part of your ecommerce design, alongside optimizing the purchase funnel and checkout experience.”Voltage creates online fundraisers to enhance a brand’s ecommerce presence. For Chipotle, for example, the agency drew attention to local good causes that customers can donate to when ordering online or in the app. Build in Amsterdam’s Mammut Expedition Baikal, Awwwards’ Ecommerce Site of the Year, combines an immersive experience with online shopping to get the customer closer to the brand. Following athlete Dani Arnold on an extreme expedition to Siberia, visitors get an in-depth back story that wouldn’t be possible to tell if they shopped for the mountain sports collection in a brick-and-mortar store.Implement smarter and more targeted personalizationTo differentiate themselves from the competition, brands increasingly aggregate consumer data, which enables them to better understand shopper behavior and then target and personalize the ecommerce experience accordingly. This is made easier by driving down the cost of and increasing access to data collection and analysis. “Understanding how customers spend their money, when and in what quantities they buy, and what competitors they visit helps form more effective personas and marketing campaigns,” said Peter Kang. “Brands that leverage data in smart ways can really shape their products and services to be superior and targeted at the appropriate customers. For example, a Netflix or Amazon home screen that did not personalize according to your behavior at all would most likely feel like a poorer user experience.” Personalization has been especially useful during the pandemic when customers couldn’t visit brick-and-mortar stores. “Presenting dynamic product recommendations and personalization powered by AI and predictive technologies informed by deeper customer understanding replicates the experience of helpful store staff,” said Karson Stimson, founder and CEO of WeAreDigital in Melbourne. Build in Amsterdam developed a tool for tailor-made fashion brand Suitsupply that enables users to get style advice, on- and offline, from a personal style advisor. Consider easier and more user-friendly online paymentsA lot of innovation in ecommerce is also happening around online payments. Mobile payment services such as PayPal’s Venmo and Square’s Cash App, for example, enable customers to transfer money directly from their bank account. Both also support cryptocurrencies.Shopify’s Shop Pay, meanwhile, lets customers save their shipping and payment information to help them check out faster the next time. Buy now, pay later providers like Affirm, meanwhile, allow customers to make purchases today and pay in installments over time without being charged interest or fees. And that’s just the start. “We’re in the early stages of more seamless and user-friendly applications of online payment technology,” said Peter Kang, co-founder and CEO of New York-based independent creative and digital marketing agency Barrel. “There are opportunities to make payments easier, faster, and more valuable to customers.”An example are different ways to reduce the transaction fees of two to three percent that are typically levied on all credit card payments. Kang believes these could be connected to ACH payments or different forms of digital currency. “Getting payment transaction costs closer to zero will have large ramifications on how brands can reinvest into better loyalty and retention strategies as well as product development and pricing,” he said. Continue to respond to changing customer behavior During the global pandemic, online shopping became an essential way of purchasing products and staying in touch with the products and brands we love. As a result, we now expect more from an ecommerce store. WeAreDigital’s Karson Stimson believes that replicating what’s great about in-store shopping, while minimizing the traditional drawbacks of buying online, is the next big UI and UX challenge.“We can bring that ‘being there’ feeling online by investing in rich content that highlights fit, feel and quality through the use of images, video, AR, intelligent size guides and social proof,” he says. “Equally important is designing a post-purchase experience that focuses on speed by providing same-day delivery and a seamless returns process, encouraging repeat buys and unlocking opportunities to deliver lifetime value through loyalty programs.”Smaller retailers are thrivingWhile the pandemic may have had a devastating effect on many physical retailers, the growth of ecommerce, advances in technology, and decreasing costs also mean that smaller brands can thrive alongside the big players, as long as they find their niche audience. “Especially in fashion and accessories, there’s a move to offer more unique, limited edition products as a reaction to big box retailers and mass-produced fast fashion,” Stimson explains. Some brands sell primarily through social channels like Instagram, while others use platforms like Shopify to build a robust catalog with a traditional checkout experience. Brands targeting Gen Z and younger millennials specifically also often use scrolling text and flashy animated GIFs reminiscent of the Y2K free-form internet aesthetic but in a more UX-friendly format. Lunch is a season-less concept store for fashion, jewelry, and accessories focused on promoting a slow and sustainable style.Direct-to-consumer is boomingDuring the pandemic customers have also become more comfortable with the idea of buying directly from brands. A lot of businesses are now cutting out the middleman or any third parties. “We’ve seen a real acceleration in the willingness of brands to grow their direct-to-consumer relationships, whereas in the past they might have let most ecommerce transactions happen on Amazon or a third-party merchant service,” says Barrel’s Peter Kang. “Now brands are launching their own ecommerce websites with marketing spend on search and social channels to drive customers towards subscriptions and bulk purchases, so the shipping economics make sense.”The power of embracing creative constraintsThe pandemic accelerated ecommerce transformation by about 10 years. All kinds of businesses, old and new, now pay closer attention to the way they operate, who they partner with, and the technology they use to sell their products online. To stand out from the competition and meet rising customer expectations, companies now invest more in experimenting, which has led to a lot of innovation in ecommerce. AR and AI are breaking into the mainstream, creating more immersive and personalized customer experiences, while the payment process is getting easier and faster.A lot of the innovation we’re currently seeing in ecommerce is borne out of necessity, as COVID-19 restrictions made online shopping the only way to stay in touch with customers, but it’s proof that creativity indeed thrives under constraints. With thanks to the following design leaders that contributed to this article:Peter Kang (LinkedIn), Co-Founder and CEO of Barrel, New York, USATim Weers (LinkedIn), Founder and Managing Director of Build in Amsterdam, Amsterdam, The NetherlandsKarson Stimson (LinkedIn), Founder and CEO of WeAreDigital, Melbourne, AustraliaTom Beck (LinkedIn), Executive Director of SoDA, Ann Arbor, USAEric Fowles (LinkedIn), Founder and CEO of Voltage, Boulder, USA SoDA Series Words by Oliver Lindberg Oliver is an independent editor, and the founder of the Pixel Pioneers events series. Formerly the editor of net magazine, he has been involved with the web design and development industry for more than 15 years. He also co-founded the international web conference Generate, and is particularly passionate about user experience, inclusive design, and advocating for social good. →Get XD Ideas delivered weekly to your inbox. Free. Sign UpRelated Content → SoDA Series3 Content Design Trends to Adopt Right Now By Nate ButlerStrong content design is about much more than applying your brand identity or basic design principles. SoDA SeriesWorking Hard, Staying Sane, and Honing Your Scrappiness By Kim GimScrappiness is about understanding, using, and maximizing what you have. What resources are available? Leadership InsightsHow Life, Work and Leadership Is Changing for Designers in a Post-COVID World: A Conversation with Denise Francis By Lauren CurrieDenise Francis, senior UX product designer at Salesforce tells us how life is changing for designers post-COVID. 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