E-commerce is Stronger Than Ever
According to Forbes, e-commerce sales have grown 129% from last year, and are estimated to hit $709.78 billion by the end of 2020, making history for the largest e-commerce sales increase in a single year. Such growth marks a huge change that emphasises the importance of prioritizing e-commerce in today’s economic climate.
With the rise of Covid-19, even more brick and mortar stores are closing their doors, with some switching to a completely online presence. Companies such as J.C.Penny, Brooks Brothers, and Pier 1 have already filed bankruptcy. However, Covid-19 is not the sole instigator for retail store closures—physical retail stores have been on a downward slope at least since 2015. Nonetheless, Covid-19 has served as a catalyst for putting brands face-to-face with the reality that e-commerce is a do or die proposition.
Although Covid-19 may be responsible for this year’s massive surge in digital retail, we can expect these numbers to continue to grow as consumers adjust to the ease and simplicity of online shopping.
Everyone’s Hopping on the Trend
As consumers continue to discover the ease of shopping online, they will be more inclined to continue this habit in years to come. In fact, 58% of consumers said they expect to do more online shopping after the pandemic than they did before it.
For example, Madison Reed, a haircare company offering a plethora of hair treatments and accessories, was forced to close down physical retail stores due to Covid-19. However, the brand found a massive shift in online sales, as traffic grew 4x since February. LensDirect is another recent example of a company seeing an increase in online sales, with an online customer growth of 400% since the shutdowns. This trend of higher ecommerce sales is happening in almost every vertical as more and more consumers reap the benefits of e-commerce. That’s why it’s more important than ever for companies to have a strong online presence.
Adapting to the New Digital Marketplace
E-commerce is very attractive for sellers, with over 24 million e-commerce sites across the globe. By 2040, around 95% of all purchases are expected to take place online. This means, however, that the ever-growing digital marketplace is becoming saturated, meaning that online competition is only going to get tougher and tougher. Companies not only have to think about strengthening online brand awareness and positioning, but also provide a seamless transactional experience to consumers. Factors such as product selection and availability, shipping costs, and delivery times are all very important for retailers to attract and maintain customers.
Without fully optimizing the user experience—from landing page to checkout to delivery—consumers may be turned off by a bad online purchase experience and never again return to an e-commerce site. In fact, 13% of shoppers will never repurchase from a retailer if their products are delivered late.
Promising fast delivery and having items in stock is important, but it may be difficult for a retailer to offer when dealing with multiple suppliers and thousands of orders at once. Troubles may arise if the relationship and communication between the supplier and retailer is not strong. For example: What if a supplier fails to keep their inventory data up-to-date for the retailer? This hiccup in communication could result in consumers purchasing products that are not even available in the first place, creating unnecessary costs in resolving the issue and a potential loss of loyal customers.
In order to avoid such issues, retailers and brands need to use an e-commerce platform that can show real-time inventory data. The platform also needs a standardization system that can translate all communication from suppliers to retailers (and vice versa) in one seamless realtime stream. It’s all about providing the ultimate online experience for consumers by configuring a supply chain process that is simple and cost-efficient for retailers and suppliers alike.
Although Covid-19 has created huge deficits from a physical retail standpoint, there has been a massive surge in e-commerce sales that shouldn’t be ignored. How consumers shop for products is experiencing a monumental shift. That means retail companies need to make sure their supply chain and data systems are prepared to handle the ever increasing influx and complexity of online orders. There are massive opportunities opening up for those companies with the right data infrastructure and supply chain technology to take advantage of it.