2021 E-Commerce Trends to Watch Consumer Shopping Behavior Changed Because of the Pandemic—And Many of Those Changes Are Here to Stay

2021 E-commerce Trends to Watch Consumer shopping behavior changed because of the pandemic—and many of those changes are here to stay. 2021 Trends to Watch • E-commerce grows on • Personalization game • Stay-at-home boom • Reimagining returns • Pickups are picking up • The need for speed • Shopping small is big • Sustainability matters Expect continued e-commerce growth

The widespread embrace of online shopping during the pandemic unexpectedly accelerated e-commerce growth by almost two years.

53% of North American buyers said that the pandemic has changed the way they will shop going forward. Take Action:

Be prepared for a quick increase in online business— revisit your operations from website to fulfillment and consider technology solutions that can help you handle accelerated growth. “5 Pandemic Buying Habits That Are Here to Stay—According to Shopify Research,” Shopify Blog, September 10, 2020. “US forecasting shocks 2020: Ecommerce and overall commerce,” eMarketer, December 27, 2020. The future of shopping will be personalized More online shopping means more opportunities to collect first-party data which can be used to make the entire customer journey more relevant—even after the purchase.

80% 63%

63% of consumers expect 80% of consumers are more likely to companies to understand their make a purchase from a brand that unique needs and expectations. provides personalized experiences.

Take Action:

Personalization is not just for drawing customers in to make a purchase, it should apply to their entire experience including fulfillment, tracking, unboxing, follow-up, and even returns.

“50 Stats Showing The Power Of Personalization,” Forbes, February 18, 2020. State of the Connected Customer, Salesforce, 2020 The stay-at-home boom will go on for some Expect continued growth in specific e-commerce categories as we keep on working, learning, and playing at home.

Online Spending 200 180 160 140 120 100 80 60 40 Take Action: 20 Evaluate your inventory and identify 0 products you could creatively position Electronics Furniture Health & Beauty Food & Beverage or promote to your customers as Expected Actual convenience or comfort purchases.

“US forecasting shocks 2020: Ecommerce and overall commerce,” eMarketer, December 27, 2020. Online retailers will stay focused $102 BILLION on getting returns right in goods were returned by shoppers in Making returns easier is key to creating a frictionless experience for customers. 2020—18% of total online retail sales.

More than 3 out of 4 shoppers who highly rated their Of consumers surveyed returns experience with a retailer that was new to them about returns: said they'd shop with them again.

Half of all shoppers said they would not buy from a retailer % 79 if they had to pay for return shipping.

said “the return process is a complicated, lengthy hassle.” Take Action:

Be sure your return policy builds shopper confidence. Make the process easy by including a return label in your original shipment or take 77% advantage of tools like FedEx Returns Technology to create a QR code label for customers who don’t have a printer. Remember, every return is an opportunity to create a repeat customer. said “paying to ship back returns is a pain point.”

Consumer Returns in the Retail Industry 2020, National Retail Federation, December 2020 FedEx Empathy Tools, December 10, 2020

“16 Ecommerce Experts’ Predictions on How Online Commerce Will Evolve in 2021,” eSeller Cafe, December 29, 2020. “Most shoppers plan on making a return after the holidays,” Retail Dive, December 21, 2020. Curbside pickup and ship-to-store won’t stop Shoppers have embraced these convenient services and plan to keep using them.

Percentage of buyers using curbside pickup: Because an estimated $25 million goods are lost every day from 40% at the onset of the pandemic for safety. package theft, consumers are opting for in-store pickup, requesting a 38% plan to continue using it for convenience. signature upon delivery, and sending packages to delivery centers.

Percentage of Top 500 North American e-commerce retailers offering curbside pickup: Take Action: 6.9% in December 2019 43.7% in August 2020 Give your customers more peace of mind—make sure they know about FedEx Delivery Manager®. It’s free and they’ll get more visibility Click-and-collect transactions made up and control over when and where their packages get delivered. $58.52 billion in sales—15.5% over estimates.

“5 Pandemic Buying Habits That Are Here to Stay—According to Shopify Research,” Shopify Blog, September 10, 2020. “US forecasting shocks 2020: Ecommerce and overall commerce,” eMarketer, December 27, 2020.

“Click and collect is gaining momentum amid pandemic,” eMarketer, January 10, 2020 Consumer Returns in the Retail Industry 2020, National Retail Federation, December 2020 Take Action: Shoppers will always want Evaluate whether your products are shipping at the expected speed or if a different to get it fast shipping option might be better. Consider services like FedEx Home Delivery® to get Expectations of fast delivery times are highest for your products to your customers every day of the week. Remember, being transparent groceries, household supplies, and home office items. about delivery timing works in your favor.

Most consumers who choose free shipping consider delivery in five days to be “fast” or “acceptable.” However, consumers’ definition of “fast” depends on the category:

Average of all categories: 2.3 Days

1.2 2.2 2.2 2.6 2.8 Days Days Days Days Days

Entertainment/ Groceries Alcohol Home office Home/garden fitness

“Reconsidering the need for speed,” Pitney Bowes BOXpoll, October 2020. Digital options will keep bringing customers closer

Businesses will continue to use them for customer loyalty and acquisition.

14% of all buyers and 27% of buyers aged 18–35 purchased a digital version of something that would normally be done in person.

63% of those who purchased digital experiences said they did so more during the pandemic than at the start of the year. Virtual experiences are here to stay

14% of buyers say they will purchase virtual experiences in the future—the same as in 2020.

The appetite for virtual experiences is likely to continue as many consumers may not feel comfortable returning to “business as usual,” even as areas slowly reopen. Take Action:

Think creatively about virtual experiences you could offer. Anything that resonates with your customers can help build your brand and every positive customer interaction boosts loyalty.

“5 Pandemic Buying Habits That Are Here to Stay—According to Shopify Research,” Shopify Blog, September 10, 2020. Shopping small is getting bigger Consumers will continue to shop locally and online with small independent businesses.

This trend is not only here to stay, it’s actually picking up steam.

Take Action:

61% 66% Take advantage of the shop small movement by showing your support for small, local businesses in your community. Consider collaborating on promotions and shopping events, too. 61% of buyers said they plan to buy 66% said that they learned You can reach new customers and from local and independent retailers six about local businesses share the marketing costs. months from now—significantly more through recommendations than those who reported doing so in from friends or family. the first three months of the pandemic.

“5 Pandemic Buying Habits That Are Here to Stay—According to Shopify Research,” Shopify Blog, September 10, 2020. E-commerce is going Earth-friendly fast. Sustainable online retailing practices will become a priority and major brands have already started.

Over half of U.S. consumers are very concerned about the environmental impact of packaging.

More online shopping means more cardboard and plastic packaging waste—and shoppers know it. Take Action:

65% of shoppers want to buy from brands that aim for sustainability. Ask customers to recycle packaging or suggest creative ways to reuse it. Consider Consumers are willing to buy more sustainably packaged products— sustainable or multi-use packaging, like the Legal Size Reusable FedEx® Envelope or and pay more for them. FedEx® Reusable Sturdy Pak. Remember, packing materials are in demand due to the increase in online shopping, so build cost and time considerations into your business plan. “Sustainability in packaging: Inside the minds of US consumers,” McKinsey & Company, October 21, 2020.

“The Future of eCommerce: eCommerce Trends to Watch for in 2021,” Core DNA, December 21, 2020. Thank You For more valuable business insights and tech tips, visit fedex.com/small-business.