Post-pandemic e-commerce sets a new direction for omnichannel
Is e-commerce on the decline or suitable for the post-pandemic world? The answer may well depend on how the boundaries of e-commerce are drawn in the “new normal” business world.
E-commerce has exploded throughout the pandemic, giving a sharp pivot to a largely virtual world. This change resulted in a 55% increase in online spending worth $1.7 trillion.
Now, after a few years of relying heavily on online-only transactions, the e-commerce industry is at a crossroads, navigating consumer expectations for fast delivery as well as a return to in-person transactions. , Ian Televik, vice president of marketing and CX at retail technology company Fabric, predicted in a chat with the E-Commerce Times.
As the world “returns to normal”, we are beginning to see another change, notes Televik, the decline of e-commerce. According to JP Morgan, U.S. e-commerce sales accounted for 13.2% of U.S. retail sales in 2021, down from 13.6% in 2020.
Shopify is also seeing revenue growth slow as it lays off 10% of its workforce, noting that the e-commerce pandemic outbreak is a thing of the past. Even Amazon is holding a second Prime Day event to make up for the drop in online sales.
Mobile commerce platform company Metropolis Technologies connects transportation, payments and convenience commerce, helping individuals and businesses transact in the physical world. Its CEO and co-founder Alex Israel says that’s not a reflection of disillusionment with e-commerce. Rather, it is a re-emergence that people generally desire to connect and shop in the communities where they live and work.
Different views of what lies ahead
Metropolis sees healthy signs that e-commerce is integrating into daily routines that are not directly associated with online shopping.
“As people return to city centers, they [bring] e-commerce habits have picked up during the pandemic. They expect their transactions to be fast, seamless and contactless,” Corey Owens, director of communications at Metropolis, told the E-Commerce Times.
However, he joked, buying a pair of socks online is easier than paying for parking or a car wash. This has led to renewed interest in e-commerce type systems for the built environment.
For example, Metropolis offers commercial building owners and operators a one-stop, contactless registration payment system for their parking garages. It eliminates tickets, coins or portals. Once you’ve registered, all you have to do is walk in and out, and our computer vision system will recognize you and charge your credit card on file, he explained.
“Think of it as single sign-on for city centers, like Shop Pay or Amazon Pay. Consumer interest in e-commerce transparency exploded post-pandemic, with more than 2.3 million consumers using Metropolis to make e-commerce-like payments across the country,” Owens said to provide insight into how e-commerce is finding new outlets rather than dwindling in online shopping.
Fabric’s Televik doesn’t disagree, at least entirely. He agrees that there is still a strong demand for e-commerce. “But this demand has diminished since the first dizzying surges observed at the start of the pandemic,” he replied.
Balance needed in the future
According to Televik, companies will need to balance their focus on e-commerce with the fact that customers likely tend to prefer an in-person shopping experience. Shopping in person is a social experience people missed during the height of Covid-19.
“Because of the crossroads where retailers find themselves, businesses must be prepared to manage their in-store operations in such a way that they can effectively handle situations such as hybrid orders placed online and picked up in-store,” he said. .
Shoppers tend to return to in-person transactions at the expense of online purchases. Consumers have returned to a more traditional in-store shopping experience, perhaps even more than the industry expected, Televik added.
Many companies – including e-commerce giants like Amazon – overreacted to the pandemic and acquired vast amounts of expensive warehouse space as they expected online ordering to dominate the market. . This put their operations in a bind.
“Arguably the most important factor for businesses now will be maximizing the space they already have to ensure it is efficient and generating revenue rather than sitting idle,” he said. .
How e-commerce fits in a post-pandemic world
E-commerce is certainly not dead, Televik asserted, and will continue to be an essential part of the consumer experience and retailer operations.
“But as we slowly emerge from the Covid-19 pandemic, e-commerce will work in tandem with traditional operations for an omnichannel experience rather than replacing them. Ultimately, people enjoy the experience of shopping where they want, when they want,” he predicted.
E-commerce provides convenience for the post-pandemic world. But Televik observed that the fulfillment technology, perhaps initially intended for e-commerce operations, will really benefit in-store operations to meet growing consumer demand.
Ultimately, consumers want their products faster than ever. It doesn’t matter if it’s in-store or online. Consumers want to know that the product they are looking for is available for purchase and available quickly.
Changing times lead to a redefinition of roles
Televik sees the impact of changes in the economy as a moving target. It is unclear whether companies are now more inclined to use e-commerce as a complement to physical stores or as an alternative.
He noted that difficult financial circumstances could contribute to problems in the e-commerce industry and that inflation contributes to rising costs in a plethora of industries.
With prices rising for everything from groceries to clothing, brands are also facing higher shipping costs, making e-commerce less attractive if buying items in-store or elsewhere is more affordable. .
The pandemic has caused empty retail storefronts, but now traditional brick-and-mortar stores are reappearing.
More than 4,000 stores opened in the United States this year. Experts have indicated that the majority of retail business in the United States still takes place in physical stores, according to Televik.
“This tells us that people are happy to return to in-person experiences, but labor shortages, rising prices and other extenuating circumstances have meant that these brick-and-mortar stores need to get smarter to maximize efficiency,” he suggested.
Fluid and coexisting channels
E-commerce is not a guaranteed option for all merchants, and no specific type of e-commerce stands out above the rest.
It comes down to the flexibility of a brand to offer the sales channel that its consumers want. The goal is to meet them where their consumers spend their time, Televik observed. This can mean buying directly from the Instagram mobile app or looking up product information in a brand’s user app before buying in-store.
“However, all of this hinges on the need to have inventory visibility to know exactly what is available and what is not, and to locate inventory near the consumer so they can receive it quickly” , did he declare.
The future of retail in general – both in the world of e-commerce and in-store operations – relies on efficient and intelligent operations. This should be a top priority for brands looking to succeed in the future of e-commerce, according to Televik.
Need of speed
The most important trend Televik sees is the changing consumer expectations for fast and free delivery. Since the dominance of Amazon Prime, fast two-day shipping has become an industry-wide expectation.
An 80% majority of top retailers offer this service, according to a Fabric report. Some expectations are even faster than that, with 61% of consumers expecting free next day delivery.
“This will change the landscape of the industry, as 40% of the top 10 retailers already offer free next day delivery, compared to only 5% of retailers outside the top 10. To stay competitive, customers will need to bring their goods closer to their final destination to help make shipping faster and more cost effective,” he concluded.