How to prepare for current and upcoming changes in the retail industry?

According to the latest IBM data, the pending COVID-19 pandemic has accelerated the development of online sales in the United States by 5 years in just 6 months this year. The growth of e-commerce sales in the US market increased from 13% in Q1 to 26% in Q2 of 2020. The coronavirus has definitely changed consumers’ shopping habits, causing a significant increase in interest in e-commerce. This trend can also be seen in other markets, for example in the UK, online retail sales increased to 28.1%, an increase of 10 p.p. in 12 months despite the reopening of stores after the lockdown. In Germany, the search for the keyword “online shopping” in Google grew by 80% and the phrase “in-stock” by more than 700% year-on-year.

Presence in the digital world as the key to further revenue growth

However, the dynamic development of e-commerce in the Retail market does not mean that shopping in a physical store will be completely forgotten. According to the latest Euromonitor data, the vast majority of purchases in 2024 will continue in the traditional form. Online sales will increase by 8 p.p. compared to 2019, which means that in  2024 e-commerce will constitute 22% of consumer spending.

The above data concerning the division of offline vs. online transactions show that e-commerce and consistent consumer experiences in both sales channels will become even more important. For companies in the retail market, a presence in the digital world will be the key to further revenue growth as well as further profits. By 2024, as much as 54% of revenues in the retail market will go to companies that will offer their products in the online world. For markets such as the UK, US, more than 2/3 of the revenues will go to companies that have e-commerce solutions.

How to prepare for current and upcoming changes in the retail sector?

1. Remember omnichannel −the focus on delivering consistent content across all channels will become even more important in the years to come.

2. Use the potential of e-commerce − e-commerce is not just sales that are part of your revenue share. Consumers today and even more often in the future will be looking online for information about products and services available in stationary stores. Just look at the popularity of the BOPIS – Buy Online Pick Up in Store model. In the United States, it grew by 259% year-on-year.

3. Content is not just about quantity, it’s about matching and valuable substance − Amazon is the first place in many markets where consumers begin the adventure of searching for their product. High quality and valuable content, created with sales platforms and online stores in mind, will allow even better results to be achieved in the coming years.

IBM US Retail Index
UK Office for National Statistics
Google, Adobe