The global e-commerce market has grown significantly since 2014 and is expected to be worth a staggering $6.5 trillion by 2023 according to Statista. This is before the changes wrought by Covid which will, no doubt, continue to increase online dominance for years to come with technology and consumer behaviour driving the evolution. Below I have highlighted several trends that will significantly shape retail.
Leveraging the power of technology
- Retailers and brands continue to leverage data to personalise customer experiences and streaming individual journeys to convert sales
- Automated checkouts and increased variety of payment plans has expediated checkout processes as consumers seek convenience
- Companies offering instalment payment plans online have increased conversion by 20% and average order values by 60% (“Pricing – Quadpay.” Quadpay. Retrieved February 5, 2019)
- Roughly 73% of shoppers prefer retail self-service technologies such as self-checkout over engaging with store associates, representing an 11% increase from last year (Retail Dive. January 15, 2019)
Artificial Intelligence and technology, the backbone to retail digitalisation
- Adoption of advance analytics and artificial intelligence drives competitive advantage throughout the supply chain
- Improved data quality and increased data volumes provide holistic views of customers allowing businesses to keep abreast of changing consumer demand
Omni-channel, personalised marketing solutions to drive sales at scale
- Nearly 50% of the world's population uses social media. That's over 3 billion users worldwide. (Statista)
- 54% of social browsers use social media to research products. (GlobalWebIndex)
- Digital commerce could increase from 35% to 55% of total sales in key markets (BCG)
Logistics and distribution
- Increasing use of technology as businesses seek integrated real-time solutions; customers demand shorter delivery times
Consumers growing increasingly conscious of environmental sourced and sustainable products
- The apparel industry is one of the world’s biggest polluters, with 73% of all disposed clothing ending up as 53 million tons of landfill waste annually (“When will the fashion industry take sustainability seriously?” Edited. May 30, 2018)
- In the past two years, the number of sustainable apparel products skyrocketed "139%. Vegan products are also up 116%"
Customer loyalty more and more important
- Consumers are constantly bombarded with new brands and retail options. Standing out amongst the crowd through loyalty programmes can prove a excellent differentiator
- Existing customers spend 67% more than new customers, and new customers referred by loyal customers have a 25% higher lifetime value than any other shoppers (Yotpo. October 10, 2018)
- 39% of loyal customers will spend more on their preferred product, even if there are cheaper options elsewhere (Yotpo. October 10, 2018)
What does this mean for you?
Quite simply, it means that offline businesses have to evolve rapidly and grasp the online opportunity. One client of ours which sells products to the building trade is planning to move the majority of it business to delivery direct to site or click and collect, negating the need for large yards/trade counters etc. Another client, an online retailer, is investing in AI to understand customer buying and browsing habits to build engagement and improve loyalty.
There is much to do stay relevant whatever industry, even corporate finance.
Global e-commerce market worth a staggering 6,542 Billion US dollars by 2023