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COVID-19 continues to reshape the world as we know it. In the long run, eCommerce will inevitably turn out to be a winner of the current situation. However, it is not so easy to join the race, as the industry is going through significant changes.
According to IBM's U.S. Retail Index , the trend of people moving from traditional shopping to eCommerce has been accelerated by approximately five years in 2020 and eCommerce is forecasted to grow by nearly 20% in a single year.
The report authors have no doubts that retailers need to speed up the pivot to omnichannel sales and point out that it is an absolute must in order to stay relevant in the new, "contactless" environment. He who hesitates is lost.
Examples of some giant retailers prove that statement. Walmart and Target defended themselves against declines thanks to their earlier investments in eCommerce. In Walmart's case, the pandemic drove eCommerce sales up 97%, and Target set a sales record as its same-day fulfillment services grew 273% in the quarter. Not to mention Amazon , which noted record quarterly profits and 40% sales growth.
Given the dominant position of marketplaces in the eCommerce landscape, it is clear that the bar has been set high for the newcomers. On the one hand, the customers are used to UX on a certain level of advancement and will not settle for less; on the other, web owners have no time to research expectations, conduct tests, and undertake the time-consuming implementation of the best solutions. Time-to-market is everything.
"Be pragmatic" not perfect
eCommerce managers must act fast. Previously, the time pressure was not so overwhelming. eCommerce was (and still is) just a fraction of worldwide retail, and many brands treated it as just an addition to the primary, traditional sales channels.
Now, some companies have paid dearly for neglecting online channels and are looking for a way to catch up quickly. Fortunately, there have got some options to choose from.
We had the opportunity to watch this thesis play out in the real world recently. One European retail chain has around 1,000 brick-and-mortar stores across the world. The chain, owned by a private-equity fund, had no eCommerce presence. Although it had previously considered eCommerce, there were serious concerns about whether it could ever work, given the assortment, concept, and even brand constraints. Despite these issues, a variety of pressures—from consumer demand to competitive constraints—forced the company to take action. Thirteen weeks later, it had a functioning eCommerce business in one key region. Not only that, its launch was successful from the first month, generating almost 3 percent revenue growth within the chosen region, tripling average basket size compared with retail stores, and maintaining a high customer-satisfaction score. When COVID-19 started disrupting daily routines in Europe, the eCommerce revenues jumped threefold almost overnight.
In the next few months, the eCommerce platforms will try hard to decrease Time to Market, probably by eliminating intermediaries or/and selling cloud versions. We will definitely see more "flexibility" on the market, and composable commerce will lead this approach as eCommerce projects must be easy to start and run by remote teams.
It looks like eCommerce is on the verge of significant change, and the reign of monoliths, powerful but also demanding, is coming to an end.