Google, Social Media Sites to Play Bigger E-Commerce Roles, Says NRF

Google will continue to be one of the most important channels for reaching consumers online, as actions this year move consumers from "I found it on Google," to "I bought it on Google," said a National Retail Federation white paper Wednesday. The report referenced Google's Shopping Actions feature, which was rebranded Buy on Google in December.

The Google shopping program, which gives retailers a way to surface products across the company's search, shopping and digital assistant capabilities, is "remarkably good at showing consumers who has the best product at the best price, and where it is in stock," said NRF. As consumers become more comfortable buying products through one seamless “add to cart” Google experience -- and Google continues to surface more purchasable products on search result pages -- there will be less screen space for brands that don’t use Buy on Google or Smart Shopping, it said.

Amazon, meanwhile, has become the third largest advertiser in the U.S., said the report. Mid-2020, 45% of consumers were spending more time on Amazon, up from 39% when COVID-19 was in early stages in the U.S. Now, half of online shoppers rely on Amazon more than they did before the pandemic. Amazon continues to act to ensure its order and fulfillment processes rival the convenience of in-store shopping by expanding its air fleet and delivery vans.

Facebook’s role in consumer shopping rose during the pandemic, with 34% of surveyed consumers saying they use Facebook to research products. With a global base of 2.7 billion active users, Facebook will be a major force and important component of advertising for online sellers, said NRF. It has been giving sellers options for “getting the right products in front of the right people," said NRF. More than half of consumers surveyed said they bought more online due to seeing Facebook ads; 18% are using the platform to make purchases.

Roughly 70% of shoppers go to Facebook’s Instagram platform for product discovery, said the report, and in 2021, Checkout on Instagram is likely to push those numbers higher. With over 130 million people tapping to reveal a shoppable tag monthly, Instagram is expected to be a “game-changer” for the industry, it said.

Consumers have more than 100 online sales channels to choose from, said NRF, and 35% have increased their time on non-Amazon marketplaces such as eBay, Target+ and Walmart. Brands and retailers need to focus on identifying the best match between marketplaces and product catalogs amid the large volume of options, it said. They’ll need to fine-tune expansion strategies for reaching the right consumers based on where, when and how they want to shop.

Some 150 million consumers worldwide became online shoppers for the first time last year, more than a third bought items they hadn’t bought online before and 24% bought from retailers they hadn’t shopped before, said the report, citing eMarketer figures. A growing number of consumers are willing to pay more or switch retailers for those offering fast delivery, free returns and multiple payment options, it said.

Among trends spurred by the pandemic, click-and-collect will likely have lasting effects, said NRF. More than 40% of consumers surveyed tried the fulfillment option last year; 87% want brands to continue offering it. E-commerce companies offering curbside pickup jumped to 44% last year from 7% in 2019, and nearly 70% of shoppers plan to use it “well into the future.”

Direct-to-consumer selling will remain a “highly influential” trend, after D2C grew 24% last year to $17.75 billion in the U.S, said NRF. Nike, a pioneer in the space, has a third of sales coming from its D2C business, while other brands are heading in that direction. NRF expects more advances on the D2C front as consumers shift buying back to brand apps and websites.

One-handed commerce will accelerate via universal shopping apps with “tap to buy” buttons that enable shoppers to make fast buying decisions while navigating shopping apps, said NRF. Google Shopping, Facebook Marketplace and Checkout on Instagram are accelerating the trend, it said.