Bringing the mall to your doorstep
Online shopping has revolutionized how we buy things and how businesses operate.
Point and click
Say you want to buy something. It could be a new laptop, a gaming mouse, or even something as mundane as hand soap. Is your rst instinct to head down to the store, or power up your PC?
To be sure, that’s a question that depends on your level of technological savvy, but we’re willing to bet that many of you would favor adding the item to a virtual cart instead of an actual shopping basket.
Consumers demand convenience, and the prospect of being able to shop from the comfort of your home, while still clad in pajamas and sporting awful hair, is tantalizing. Online shopping lets you u do that, and even compare prices across different platforms. Bought a large TV? All it took was the click of a mouse, and you can rest assured that you picked what was to your knowledge the best price.
From Amazon to Lazada, there are now huge online marketplaces where you can buy virtually anything, and have it delivered right to your door. This isn’t even limited to gadgets or household items, and services like Redmart and nd Honestbee have sprung up to do yourour grocery shopping for you.
Many brands also have their own online stores, so you’re not just limited to what online retailers bring in.
Furthermore, you don’t even need your PC to buy something. Most major online marketplaces have mobile-friendly layouts, and you can get your shopping done while lying in bed with your smartphone. On Prime Day 2017, an annual event where Amazon promotes its Prime subscription service with lucrative sales for members, the number of Prime members who purchased something increased by more than 50 per cent from 2016, with orders on the Amazon App more than doubling.
What’s more, many of these online retailers haven’t even bothered to set up physical stores. British online fashion store Asos, whose name aptly stands for As Seen On Screen, exists purely on the internet. However, it continues to go from strength to strength, with international sales growth estimated at 48.1 per cent in 2017.
In fact, according to gures from the UK’s O ce for National Statistics, nearly half of the total spending with online retailers in 2015 went to entities such as Asos with no physical presence.
Everyone can get a slice of the pie
But it’s not just businesses that are hawking their wares on the internet. Consumers have been getting in on the game as well, on platforms such as eBay, Craigslist, and Carousell. These platforms make it easy to sell pre-loved or brand new items to buyers eager for a cheap bargain, and add to the already large variety of goods you can get online. And then there are sites like Etsy, which allow enterprising artists to sell various vintage or handmade items. These are usually one-man operations, and with platforms like this, the barriers to entry aren’t that high at all. ] Tencent’s WeChat messaging app also allows anyone to sset up an online store that can be accessed in the app itself. WeChat stores first opened in 22014, but in 2016, a good third of the app’s nearly 800 million users were already making purchases from its stores. With so many avenues to choose from, it’s hardly surprising thathat brick-and-mortar stores nd themselves losing eyeballs, and bodies, to their online counterparts. Consumers only have so much money to spend, and the more dollars they direct online, the less they have to spend in retail stores.
Even more worrisome for regular brick-and-mortar outlets is the fact that some online businesses are not content with just existing in virtual space. For all the hype and continued growth that e-commerce enjoys, Alibaba announced in January a US$2.6 billion bid for department store chain Intime Retail, a clear signal of its intention to expand beyond online retail.
There are even rumors of plans for a ve-storey mall in Hangzhou, which would host brands from Taobao, Alibaba’s agship e-commerce platform.
Alibaba isn’t alone in this, and online retailers like Bonobos, Warby Parker, and local furniture retailer HipVan have also laid down bricks in the real world. This points toward a new model for doing business, or what Alibaba CEO Jack Ma has referred to as New Retail.
According to Ma, this is an integration of online, offine, logistics and data across a single value chain, with the customer at its core. By this reasoning, the divide between online and offine is false, and success in the next generation of retail will depend on how deftly companies utilize both channels.