Challenges : Three Key Trends And Challenges Of The E- Commerce

Februari 23, 2018

Challenges : Three Key Trends And Challenges Of The E- Commerce

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Challenges:

Three key trends and challenges of the e-commerce

E-commerce goes moves to brick and mortar, focusing on the pop-up segment

The need for online merchants to move offline was always in the offing especially for unique products as opposed to mundane products such as books or pet food. Ironically, the digital sales channel has become one of the biggest barriers to the digital ecommerce economy becoming comparable to the offline segment. Consumers like to touch and try gadgets, fit new garments or shoes, and explore new devices’ functionalities.

As the Telegraph reported in 2016 people spend 51 pence of every £1 online. The gap between digital and traditional brick and mortar retail is huge. Online merchants struggle to get an offline presence where over 90% of total sales happen, and vice versa landlords struggle to bring in online merchants.

The trend has become mainstream with Amazon, which was initially disrupting traditional bookstores, opening 15+ bookstores in the last two years and planning to open up to 100 new pop-up stores in the US in – to be checked and updated.

Another example is Casper, a $1 bln - in revenue ecommerce website that built its reputation on the ease of buying a mattress online. The company opened 15 pop-up stores and, as the CEO said, “The pop-up retail environment allows us to seamlessly traverse online and offline, which we believe is paramount to an exceptional customer journey”.

E-commerce is booming, the number of small merchants is exploding

E-commerce has grown at an unprecedented rate and is projected to grow at an even higher rate over the upcoming years. According to “Statista”, retail ecommerce sales worldwide in 2014 were USD 1.3 trillion and are set to increase to USD 4 trillion by 2020.

The growth is illustrated by the number of shops created by online merchants on the Shopify platform. They had 84,000 shops in 2013, 144,000 in 2014, 243,000 in 2015 and ended 2016 with almost 378,000 merchants on the platform - a growth of 4,500% over 3 years. In addition, according to Statista, the number of people buying goods or services online will increase from 1.46 billion in 2015 to over 2 billion by 2020.

Digital analytics solutions are a must-have for a merchant

As Amazon showed that data is the new king, a whole generation of startups collecting data on retail customers has emerged. Retailers now want to know every-thing about their customers: their demographics, socio-economics, consumer habits and engagement metrics. Yet, the key challenge these startups are facing is integration. The retailers most interested in the data analysis are huge chains of tens of thousands of stores that have local managers who are resistant to the introduction of innovation and are willing to run the stores in the old-fashioned way.

The only feasible solution is to build a new retail chain that would have technology and data analysis in its DNA from day one.

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