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Present of Shopping - Online it
Consumers are rejoicing. Jobs are changing. A whole new world.
No more physical "shops" while E-shopping - Online buyers are booming!
Shopping trends are changing. With the advent of cheaper internet, smartphone penetration, increased focus on consumer experiences & convenience at large, online shopping has thrived. Only to be accelerated by Covid induced physical lockdowns. You can't "lock" internet down.
In the past, consumers had to walk/ride to nearby shops/malls/stores to see/feel/read what they potentially want to buy. With wider acceptance of mall, it became a source of outing, window shopping & increased competition. Collection of consumers collected all producers under the same roof.
However, world is changing at a fast paced. Technological enhancements have reshaped the shopping patterns for good. New jobs are created, some are lost. Consumers should be excited (if they have money left in their pockets) of the choices, experiences & accessibility of products/services. This prospect is exciting for businesses & small entrepreneurs as well.
Retailers are now focusing more of “Direct to Consumer”. Direct does mean understanding the consumer better, emotionally & physically. While streaming social media - without the need to physically tough the product - many buyers choose the products. Some even give money back guarantee if size doesn’t fit. This is a norm of the business.
China’s Digital Dragon dwarfs the US
China is leading in the race to digitize on all metrics. Retail as a % of sales is more than 50% in China vs 15% in the US. Similarly, online groceries are rampant in China at 27% vs 7% in the US. Chinese economy is all geared up for an e-commerce revolution with rising middle class and support for “demand” size reforms by President Xi.
Many tech giants have entered and mastered the race of e-commerce; Amazon, Walmart & Alibaba. However, Pinduoduo & Shopify are climbing up the ladder fast by enabling the business itself. Their role is more of a business consultant than merely a platform to connect buyers with sellers. In addition, reams of data available to these tech-giants transfer the feedback from “Customer to Manufacturer (CTM)” to innovate products smartly & efficiently as per changing consumer trends. This sort of customer analytics was unimaginable at that scale in physical shopping.
Will physical shopping die? Not really
Physical shopping is here to stay. Although pie is getting bigger overhaul, online sales would have much faster growth depending upon product and services. Innovative means of marketing such as Live streaming, Virtual showrooms, Visualizers, platform based selling & marketing on Social Media apps are taking the leap forward. And honestly, it’s a better consumer experience. Yes, it’s scary when Inditex (Zara owner) plans to shut 1,200 shops permanently but a significant portion of human beings would want the physical experience of “mall-ing” and “touch-ing” the product and not the screen.
What does the future hold?
Omnichannels. Online & offline are both here to stay. Low margin products, which are perishable & difficult logistic experience would continue to thrive physically. Nonetheless, businesses can not remain aloof to the online channels as well. Covid’s lockdown has given crash-course to people who were initially resisting embrace of technology. The phobia is over. Part of the sales would remain via ecommerce website in areas where shops are in Urban cities & travelling costs more than the pleasure of feeling the product.
Be wary of evolving jobs:
Retail is one of the largest employers globally. That said, new openings are going to be less. It’s time for re-skilling and gaining online skills such as, UI/UX, software engineers, app development, logistics, data analytics, web development, digital marketing & Virtual/Augment reality. Many blue-collar jobs in retail would vanish depriving part-time workers of ways to support the college/living fees. However, delivery boys/girls would be wanted and higher skills would fetch higher wages.
To conclude, consumers will spend to improve their lifestyle. Not-so-able consumers would want to earn more to be able to spend more. Ubiquitous use of smart phones & ultra-cheap internet is supporting the development of online channels. Business who do not adapt to changing consumer patters will miss the boat. Online channels enable bigger audience, cost-optimization, lower overheads, increased competition & better feedback loop.
On the other hand, tech-giants with billions of dollars in dry powder would continue to invest in their technological warfare. This core competency would be impossible to undo. Consumers are excited, producers should not lag behind either. In the past, transactions were just a click away. Now, its a touch away. Tomorrow, it will be a blink away. Be ready.