Ever since ecommerce began, there have been predictions that it will ultimately replace in-person shopping. During the peak of COVID19, these predictions seemed likelier than ever. Perhaps they will come true one day. For now, however, it appears far more likely that ecommerce and in-person shopping will coexist in parallel but separate niches.
Understanding the growth of ecommerce
It’s probably fair to say that many of the predictions about the future of ecommerce are based on its rapid growth so far. This is understandable but it also overlooks the fact that ecommerce developed in conditions that were close to perfect. It is now having to face the challenge of maturing into a stable business ecosystem.
What’s more, it’s facing much stronger competition from real-world retailers of all sizes. Those of them that have survived ecommerce, COVID19 and Brexit are now very much raising their game. This means they are no longer the sitting targets some of them were before. In fact, some of them may even start to challenge the etailers in their own space.
All in all, therefore, the next few years, are likely to see a major battle between etailers and real-world businesses. The likely outcome is that most businesses will become hybrids, to some extent. This will allow them to leverage the strengths and minimise the weaknesses of each approach. Here is a quick guide to what this might mean in practice.
Real-world retailers will learn to leverage customer data
Until the etailers arrived on the scene, the big supermarkets were regarded as the experts at acquiring, analysing and using customer data. The digital-first etailers, however, took this process to literally unimaginable levels.
Supermarkets have been relatively slow to catch up and other retailers have been even slower. For example, department stores are notorious for having weak online offerings. This is particularly bad for them because many of them also have issues with their real-world stores.
Even smaller retailers will begin to use business analytics a lot more than they do at present. In their case, however, it may be more as a compliment to the information they get through customer interaction.
Ecommerce stores may still have the edge when it comes to reacting to information gained. Technology, however, is narrowing the gap for real-world retailers. For example, barcodes and QR codes both allow pricing to be updated centrally and quickly. Likewise, digital displays can market directly to customers while they are in the shop.
Etailers will aim to emulate real-world service
Even in sectors which compete mainly on price (e.g., supermarkets), customer-service staff can make a real difference to the customer experience. The further away from this sector, you move, the more important customer service becomes. For example, sales assistants in luxury boutiques will deliver the very highest levels of personal service.
When it comes to delivering the personal touch, there is literally nothing better than real-world interaction. There is, however, a lot of etailers could potentially do to make their customer service more personal. For example, they can have easier access to live chat with humans and make greater use of phones and even video calls.
Taking this to the next level, etailers are likely to seek to establish some kind of presence on the real-world high street. They may open up their own stores and become hybrids. It is, however, more likely that they’ll aim to take up concessions in established stores. They may also run pop-up shops.
Etailers will address delivery issues
It’s worth remembering that Amazon started out life as an online bookstore. It then moved into CDs and DVDs before finally expanding its product range to what it is now. The obvious common factor uniting books, CDs and DVDs is that they are uniform products that are generally easy to post. They are also products people are unlikely to need in a hurry.
Online retailers, particularly Amazon, have invested heavily in their delivery systems. In some cases, these systems are almost certainly as good as they can possibly be given the technology currently available. They’ll undoubtedly be improved as technology progresses. Even so, etailers still have to deliver goods and that creates issues.
Both internet and real-world retailers are in essentially the same situation with regards to bringing in stock from suppliers. Internet retailers, however, need to get items to the customer’s delivery address. This has become a notorious source of problems.
Some of these problems may only be temporary (e.g., fuel costs). Others could potentially be fixed through technology (e.g., smart doorbells). Some, however, seem to be just a fact of life (e.g., people not being in when drivers arrive). This can leave people reluctant to rely on etailers for items they need quickly.
Etailers may be able to deal with some of these issues by offering a click-and-collect service. To do this, however, they either need their own real-world premises or a partner which does. This raises the question of why people should click and collect instead of just buying from a real-world retailer in the first place.
Etailers will deal with the issue of returns
In the real world, retailers are only obliged to accept returns if goods are unfit. In the ecommerce world, retailers must generally accept returns made within 14 days of delivery. There are only a few exceptions to this, for example, custom-made items and items the customer damaged.
The reason for this rule is that customers can only make a final purchase decision once they actually have possession of the item. This rule makes a lot of sense for a lot of reasons. It is arguably essential for consumer protection. Unfortunately, it also creates huge issues for etailers. In fact, it leaves some of them very exposed to malicious actors.
Etailers will need to address the issue of returns urgently if they are to remain competitive. Addressing the issue of returns is likely to involve a combination of better information for legitimate customers and better enforcement against malicious actors.
In particular, etailers are likely to start paying as much attention to customers’ returning patterns as they do to their buying patterns. They may then start enforcement action against customers who regularly send back a high percentage of their purchases. For example, they may start by charging them for returns and potentially move on to blocking them completely.
Tracy Hill is the Marketing Manager for CarMats UK, a leading car accessories manufacturer based in Mansfield, Nottinghamshire. All of their products are made in Britain by their amazing team of skilled workers.
