E-commerce is booming, with 2.14 billion digital buyers projected by 2021
The retail business is now at the mercy of e-commerce, with 2.14 billion digital buyers projected by 2021, and Spain representing one of the top EU markets for the sector.
E-COMMERCE HAS REVOLUTIONIZED the way consumers shop by transforming physical into digitalized retail in response to the driving force of tech innovation. The major market shift has influenced the retail sector both positively and negatively. Today, for most people, buying online is their first choice because it is not limited by space or time. The fundamental convenience that online retail represents can allow a company to expand its reach and access a wider audience on a global scale.
Having a digital presence not only serves as an instrument for online marketing, but it is also useful in overseeing sales activities to measure growth. From a logistical stance, e-commerce will shorten product lifecycles and reduce operational costs, in turn achieving higher profit margins to facilitate further growth. Given these technological advantages, the global impact of e-commerce, especially in China, has been major. Forbes reported in 2016 that 57% of people surveyed in 24 countries across six continents had purchased something online in the last 6 months. A study by eMarketer expects this rise to continue, reaching 2.14 billion digital buyers globally by 2021, the majority of these represented by millennials who belong to the generation of e-commerce.
Nonetheless, e-commerce also has its limitations. Due to its online nature, companies have minimal interaction with their customers. While physical retail involves a customer’s interaction with a product and a salesman’s skills to promote it, these factors are irrelevant in online retail. The contrast demonstrates how dramatically customer preferences have shifted with time to prioritize convenience. Although a growth trend in e-commerce has created employment in the sector, it has also reduced jobs in department stores and other aspects of traditional retail.
Spain is one of the largest e-commerce markets in the EU, with 63% of the population engaging in online shopping. Even in light of a financial crisis, the ongoing advancement in e-commerce skyrocketed, reaching an impressive 26.2 million people at the end of 2018. Though most people buy on foreign sites like Amazon, many Spanish companies like El Corte Ingles are either expanding into e-commerce territory or establishing purely e-commerce businesses. Either way, they are meeting with significant success. However, the pressure for digitalization has also reinforced competition in the retail industry. At this stage in the evolution of retail, the key to surviving as a business is to remain flexible and adaptable to change and ensure that retail continues in parallel with technology. Physical retail is under pressure to provide a better shopping experience so as to secure its existence in the face of growth in e-commerce sales.
The latest technological adoption in retail has been mobile e-commerce. Companies have integrated the use of 4G and social media to design mobile apps for their brands, thus making buying even easier. Though it is still in its embryonic stages, the impact is already widespread and would continue to be in the advent of 5G technology.
Though online retail sites may not completely eradicate physical shops, having an e-commerce presence has become increasingly necessary in promoting and complementing conventional shopping. In the future, we can expect AI and the implementation of cryptocurrency to further scale up innovation and optimization of e-commerce. In this coming decade, rather than focusing on the design of new products, businesses should instead prioritize making online processes more seamless. Achieving this requires targeting supply chains and ethical controversies to ensure e-commerce is responding to the global call for a sustainable economy. ✖