In his excellent blog, Retail Prophet, retail futurist Doug Stephens paraphrased Winston Churchill by saying that we are at “the end of the beginning” of ecommerce. But what does this mean?
Forrester predicts a 11% compound annual growth rate for online sales over the next 5 years in Europe, and a 9% CAGR in America. These signs indicate that while the markets are not exactly plateauing, they are approaching a level of stability in contrast to the exponential growth of the previous ten to fifteen years.
But it is only “the end of the beginning” because this is merely round one of a battle that will likely go many rounds. Consider, for instance, that much of the world still doesn’t have suitable internet access – 69% of people in the developing world are not using the internet. (And even in the developed world, 23% of the population is still not using the internet.) On top of an increased volume of internet users over the coming years, mobile access to ecommerce will only continue to improve in terms of accessibility, security and ease of use. And the already fast delivery cycles of companies like Amazon are only going to get shorter.
How Can Retailers Prepare for Round 2?
There are plenty of areas where retailers can regroup and focus on their strengths in order to elevate themselves in the marketplace. Efficient, easily-accessible and personal customer service will win loyalty. Similarly, secure and safe ways to shop will ensure trust. Training your most capable, knowledgeable and personable in-store employees to directly engage customers can do a lot to increase conversions at the point of truth, rather than let customers walk out and buy the item online. Streamlining the whole in-store experience – quick checkouts and easy returns in clean, brightly lit stores; local delivery for customers within short distances – can also go a long way.
Retailers also need to make significant technology upgrades to level the playing field with online retailers. Some of the most important will likely be in the realm of data analytics and omni-channel integration. With the right frameworks, retailers will be able to collect data from multiple sources and integrate it to gain insights about customers at the individual level. These efforts can lead to targeted campaigns, coupons and offers – sometimes directly in the store at the point of sale, for instance to a customer’s phone while she is standing in the store aisle.
And this is why omni-channel integration is so important. As consumers have become accustomed to digital connectivity at all times throughout the day, it’s important for retailers to provide them with a seamless experience between their online, mobile and store interfaces. This can be hard with legacy systems so firmly entrenched, but there are plenty of examples of retailers who have made this possible.
To learn more about these and other ideas to make the store more powerful and profitable than ever, we invite you to register for a webinar moderated by Doug Stephens and Mindtree SVP Radha R: The Future of the Retail Store, March 20, 3:00 pm GMT.
1. Forrester Research, Online Retail Forecast, 2012-2017 (European and US), March 2013; Smart Insights, Forecast growth in percentage of online retail / Ecommerce sales, April 2013.
2. International Telecommunications Unions (ITU), Geneva, Key ICT indicators for developed and developing countries and the world (totals and penetration rates), 27 February 2013