The global pandemic with the added financial uncertainty has been a significant dampener for everyone. As the stock market continues to fluctuate and the asset pool depreciates in value business owners are bracing themselves to salvage and resist the impact of a hard economic fallout. Businesses are trying everything in the book to ensure that they at least stay afloat and not drown themselves in uncertainty.
Back in 2003 when the SARS outbreak was declared an epidemic, there was a huge disruption to travel, work, and the economy. Take the case of China which was the root destination of the outbreak, everyone was afraid to go outside. It was then when the founder of Jing Dong from JD.com one of the largest retailers in China moved his physical stores to online stores which is a natural development.
But like they say, from adversities emerge opportunities, and since stay-at-home is an option people are looking at, we see many are relying on eCommerce businesses and brands to get products delivered straight to their doorstep. The need for essentials and medicinal supplies has never died out even in the pandemic, only the model of business dealing has changed.
We at Chapter247 have seen a barrage of questions from our existing and new clients about how this migration takes place. It is more about the migration of the customer mindset and we have one answer to this: If your digital transformation is healthy, state-of-art, and strong, then the E-commerce business becomes user-friendly and a new way of doing business and strengthening impact on the global market.
How can a disadvantageous situation be converted into an advantage?
We are an organization that has always believed in staying positive and believing that every adversity is a growth opportunity after all. Our client interactions are also along the same lines and we collaborate to understand how best we can fit our goals in this situation. If not, then what modifications will ease the task to convert this into a new business. This section is dedicated to understanding how the least beneficial situation can be a new dawn for E-commerce and retail businesses.
Online presence has promulgated a new era
The growth in online sales has steered a new direction to the future of this industry. Charts from Statistica mentions that the overall percentage of e-commerce retail sales have grown in the pandemic period accounting for 16% of sales in the US in the second quarter of 2020.
Additionally, we have also seen that the overall percentage of eCommerce retail sales in the UK has risen to almost one-third of all retail in the region in May this year. The chart below from eMarketer’s recent global Ecommerce forecast shows that the Asia-Pacific forecast stands atop at $2,448.33 billion of e-commerce sales in 2020 as opposed to others.
In the last few months, there has been a major uprise in online services. Zoom which is a video communications company has seen a whopping 224% growth while Slack has gained 9000 new customers equating 80% in sales. These trends that we have mentioned only goes on to say that people have switched to online transactions despite the pandemic. Those businesses which did not realize the need to switch online, are suffering, while others who were quick to judge the situation reaped the benefits of digital transformation. The economic uncertainty and the pandemic has been a new opportunity for businesses to go online, create and build web and mobile applications to support their businesses. Not just that, they also have encouraged the use of disruptive technologies like chatbots, ML, and similar to ensure every customer query is taken care of and every single data collected can be analyzed.
Shopping habits of people have changed
Earlier shopping in malls was the to-go option. People crowded in malls because it was considered a favorable outing. But the pandemic has resulted in social distancing and people are now refraining from going to crowded areas for shopping. A part of the problem also relates to poor sales recorded in those stores which do not have an online presence. The past few months have made or broken companies, some have even shut shop and many have even shed their extra workforce. In such a situation when the liquidity in the economy was dependent on the welfare packages announced by the government, eCommerce businesses understood that needs are the same, but the medium has changed.
The fear within people has led to a situation where people are relying on eCommerce businesses to fulfill their needs. Not just that, even eCommerce businesses are now automating themselves so that the operational cost slippages are reduced to a minimum. This makes online Ecommerce a profitable venture in the recession. Added to this, the whole idea of shopping from the comforts of your home has become an easy and much secure option.
Economic uncertainty has been a catalyst for entrepreneurship
If we observe well, throughout human history, the crisis has been a major agent in building new formats in society including businesses. Technological innovation has been the guiding light this time because entrepreneurs have risen to the challenges. They play a key role in assisting society get through the economic crisis and this year has been no exception. When the 2008 financial crisis took over, Uber and Airbnb emerged like never before. The retail sector has also seen a storm of new entrepreneurs entering the market. Unbelievable home-grown retail businesses on digital platforms have risen which is a great sign. While some retail businesses have become cost-effective, fashion retail businesses such as Zara, H&M, Hedley & Bennett, and Trigema are producing protective gear, gowns, and other supplies for hospitals.
Whatever the actions are taken in this crisis, it will shape retail businesses in the long run. Retailers have already become innovative, stepping out of the comfort zones, and have rediscovered their entrepreneurial spirit.
New technologies are offering innumerable opportunities as the crisis now transforms the products and services they offer. Recent trends show that the traditional brick and mortar businesses have suffered setbacks because their rigid business model lacked the conviction to face the crisis.
The new stress on innovation has extended to the digital customer experience also. Most retailers with their feet in brick-and-mortar have called in changes and tried to replicate their in-store experience online. But mostly these efforts have only proven to be a fruitless experience. Beyond the basics, retailers have now switched to give a virtual experience by investing in VR/AR-related technologies. Other than that they also are investing well in real-time inventory management, predictive analytics, AI-powered search, personalization, and co-creation functions which can change shopping experiences forever.
Another big trend has been social commerce that has allowed retail companies to sell on different social media channels that gives them a chance to use personalization, multimedia content, gamification, and much more. The retailer is now using these new capabilities to create a social, communicative, and immersive experience wherever the customers are located, something which a physical store cannot provide.
It’s time to change!
Customers are now being accustomed to new forms of business on digitally active platforms. If you are a regular physically present business and have not switched to a flourishing online presence, then survival will become key. If you are planning to migrate your business online, it is a great move towards a new set up. If you are planning a transformation now, or are looking to add more to the already online presence, then drive this conversation straight to our strategic planners who will jet-set your retail journey to a new high.