Due to an unexpected increase and 2020’s effect on the high street, the ecommerce industry is flourishing.
Social Distancing measures and business closures have significantly disrupted consumer spending habits and has fundamentally changed shopping behaviours. While this has created a wave of uncertainty for many in the long run, those who do want to make a purchase are increasingly opting for online retailers. As a result, ecommerce has been trending in a positive direction.
Consumer buying habits are unpredictable and are unlikely to suddenly shift back to what they once were, even after we get back into normality. Users enjoy the convenience of online shopping, and many will still be reluctant to return to old ways even after restrictions are lifted.
By 2022, e-retail revenues will grow to $6.54 trillion, up from $3.53 trillion in 2019.
Because of this, now is the time to bet on ecommerce.
Retail is at the forefront of a technology revolution. Read here to discover how this is shaping the retail industry for the foreseeable future.
Adapting to the Next Normal
For the past couple of decades, technology has been re-setting the bar faster than most businesses can keep up. In our current climate, this is truer today than it has ever been. The UK has the highest adoption of online shopping and by 2030 technology will affect a third of tasks in UK retail.
As for the recent surge in digital and omnichannel adoption, a lot more retailers in every industry have been relying on technology to keep their businesses afloat. Retailers need to implement more technology and data-centric solutions to stay ahead of the game. Those with an established and robust digital strategy have been better prepared to react to unpredictive behaviours while others have scrambled to upgrade their online experience.
‘Keeping Pace’ is no longer sufficient for success or survival, as this is evident in the public struggles of many high-profile retailers and famous brands.
Last week, Boohoo announced it had paid £55m for the Debenhams name and website and plans to build an online, multi brand platform.
Similarly in the news, ASOS have now exclusively bought the Topshop, Topman, Miss Selfridge and HIIT in a deal worth £295 million.
While the reluctance to take on stores is understandable particularly in our current volatile environment, Debenhams for example were a huge presence on high streets across the country and served to drive traffic to its online business – even if the stores weren’t greatly desirable. This is turn, proves the speed of the significant changes that the retail sector is undergoing.
Fulfilment of online orders has been one of the quiet revolutions of the last year, and it will be interesting to see just how much of an impact both brands can have without the presence of physical stores.
Both ASOS and Boohoo have seen this as an acquisition opportunity to reach out to new customers and reposition the incumbent brand. Since both ecommerce brands have grown greatly in size and fashion credibility, events of today are described as a landmark shift in the power base in fashion retail from the old guard to the new.
Retailers who relied on in-store showcases to sell now must find alternative ways to let their customers sense, explore and size up their products. Those that do not have an ecommerce system in place, are likely to suffer and lose significant revenue in the years to come as buyer habits will continue to become increasingly digitally oriented.
Major Drivers of The Explosion of Ecommerce
Here lies the main factors that are already responsible for leading the growth of ecommerce over the past few years.
The Rise of Mobile: The rise in the use of mobile devices has contributed to the growth of global ecommerce as people are able to buy and sell over the internet more flexibly and passively. From being a novelty to an everyday essential with highly versatile functions and presents shoppers with a valuable research and payment tool.
E-commerce businesses rely on these payment systems and are integrating them into their mobile applications.
Data-Driven Nature: Statistical observations gathered by ecommerce businesses have also contributed to the growth of ecommerce. Ecommerce businesses can track consumer preferences and make observations, which are then integrated into retail models for seamless future purposes.
Improved Consumer Experiences: Consumers are usually in search of product offers at very affordable or discounted prices. Personalisation holds a higher command on consumer engagement. They can frequently encounter new product offers that match their interests with simple taps of buttons.
Low Cost: Unlike brick-and-mortar stores, it is relatively cheap to establish an online store. E-commerce eliminates the need to build physical stores in which products are catalogued.
Businesses Will Focus on What Matters: The Consumer
The future of retail will see the implementation of a holistic and omnichannel approach. By offering an integrated experience with relevant content based on specific user behaviour will greatly increase satisfaction.
Retailers will make better and faster decisions and teams will have access to hundreds of data points to allow them to focus on what matters.
Omnichannel approaches and technology enables organisations to optimise channels to the full potential and puts the customer at the centre of the strategy to drive growth, as well as understanding their customers’ journey, behaviour and buying patterns to provide them with a truly personalised experience.
At Data Clarity, we have developed ClarityOmnivue to specifically solve the challenges businesses face trying to mine multiple disparate data sources to deliver one 360-degree view of customers and business key performance indicators. ClarityOmnivue transforms disparate data into a unified data solution that enables more informed business decisions.
We have worked with retailers like Paul Smith to develop ClarityOmnivue that has given them the ability to easily identify and reconcile their data and providing all the information they need to know about a single customer.
For more information on how ClarityOmnivue can be of benefit to your business, click here.
Businesses and companies that not only want to survive but thrive in our next normal, need to update their digital transformation strategy if not already done so. Ecommerce businesses that progressively connect digitally with consumers through authenticity and convenience will successfully build trust and retain customer loyalty.
The Influence of Social Commerce
Social commerce will become a key revenue channel as it has been slowly gathering momentum in the last few years. Social media channels are no longer just advertising channels, it’s a great way for brands to acquire more customers at a small cost besides simplifying the purchase journey. In the coming years, it is expected to be one of the major sales channels, alongside ecommerce.
The major factors that will fuel its rise includes visual content, cheaper data, improvement in user experience in terms of native checkouts and payment security and the continually increasing amount of time spent by millennials and the younger generations on social media apps.
AI and ML Will See a Greater Play in Ecommerce
It’s reported that by 2025, 95% of all customer interactions will be managed by AI technologies.
Ecommerce giants like Amazon gain a competitive edge above likeminded businesses as they can leverage AI and other cutting-edge technologies to enhance and improve all aspects of their business. From using Natural Language Processing to power Alexa, to leveraging Collaborative Filtering to personalise recommendations and enhancing its logistic to using predictive rerouting, Amazon has managed to expand the cases for AI and ML.
AI relies and activates the potential of your data. Here are the top expected applications of AI in ecommerce:
- Personalised Consumer Journeys
- Predictive Product Recommendations
- In-store Insights and Customer Engagement
- Dynamic Pricing
- Predictive Behaviour Modelling
- Visual Search
Customers are constantly creating rich data sets as they interact with ecommerce brands.
Preparing for a digital-first future
In a world of economic uncertainty, the long-term outlook for buying and selling online is bright.
It has become increasingly clear that a restructuring of our global business and economic structure has most likely been altered permanently and rapidly accelerated a shift to online practises.
So, if you’re selling something, and plan to continue doing so for the foreseeable future, you’ll want to pay attention to ecommerce and become an active participant as soon as it’s feasible for your business.
At Data Clarity, we are on top of the challenges and opportunities this presents for retailers. We conduct data audits for organisations to highlight the current capabilities, strengths, weaknesses, and opportunities.
For more information, contact our experts today.