Ecommerce turns 20: How has it driven retail evolution?

20th Aug 2014

Recently the retail industry celebrated a major milestone – the 20th birthday of ecommerce. This occasion marked the turn of an era and a time for retailers, online and offline, to review the constantly evolving market – from where we began, where retail has developed and what the opportunities are for the future.

Major changes over the last 20 years include the eruption of mobile and the omnichannel experience, as well as increasing consumer demands, expectations and the advent of brand loyalty. So where did it all begin and how has the retail landscape changed?

Is the High Street dead?

Initially, ecommerce seemed exclusive to unknown, pure-play retailers (which do not have a physical presence) and for this reason, for many years people were questioning, is the high street dead? Of course pure-play retailers were in prime position at this time, as they had the advantage of low over-heads, which meant under cutting the ‘bricks and mortar’ traders was easy.

In more recent years however, High Street retailers have caught up, and in some cases have even over taken the pure-play retailers, by offering an omnichannel experience, combining online, in store and mobile to offer a seamless customer journey. This has benefited retailers and has helped them to build up a following – cultivating a wave of brand evangelists that remain loyal to that retailer.

Despite this, the omnichannel experience is restricted within country borders, so the pure-play retailer has found a new advantage in being able to launch quickly and successfully, selling locally (online) to overseas consumers. Now once again, the High Street retailer is playing catch up – a pattern that is likely to continue for years to come. We only have to look at developments in cross border commerce – especially considering Amazon’s latest investment in India, and how it has opened the playing field for retailers ready to test out new markets and expand.

Customer service is king

As a result of these interchanges between pure-play and the High Street taking the main stage, the customer - retailer relationship has also evolved. Customer service has now succeeded cut prices in the list of consumer priorities, making customer service, king. Shoppers are more savvy, so the lowest price isn’t always best, it’s the customer experience and quality of service that now plays a big part in the buying process.

Customers are now willing to pay that bit more if they know the service they are going to receive is good. As a result, customer service levels have been pushed up amongst pure-play retailers, to an all-time high. With the use of customer review systems where customers can publicly rate a shops service, a shop with bad service no longer has anywhere to hide. Retailers really must embrace feedback and act upon it in order to maintain consumer trust.

Variety is the spice of life

One of the biggest trends we’re seeing at the moment in ecommerce is that customers demand a variety of convenient ways to shop. For example, different payment methods, multiple delivery options and collect from store - or even collect from a railway station. It’s all about getting the product into the hands of customers quicker than ever before.

That said, consumers are always looking not just for a variety of services, but variety of products to choose from. The internet has opened up a number of doors for consumers to search for products across the globe, not just on their local High Street. Retailers must recognise that providing a variety of products and services for customers reduces the reasons for customers not to shop with them.

Going global

The future is global. Cross border trade online is growing at a remarkable rate and many UK retailers have already established themselves online in new European countries. In doing so, getting the essential experience they will need to help them eventually trade even further afield.

The real restriction these retailers see in cross border trade is not services such as payment or delivery; the restriction is the customer’s basic instinct of trust. When shopping online overseas we come across brands we do not recognise and we feel the need to analyse whether this brand is trustworthy - which adds another hurdle ahead of the buying process.

If a retailer can show they are trustworthy immediately then the buying process can continue, uninterrupted by human nature! If online stores want to succeed, they need to not only be trustworthy, but show potential customers that they are. This spans from ensuring the tone of the website accommodates cultural preferences to including trust boosting measures such as review systems and trustmarks on their websites.

Back to the future

Although online selling seems to be in a new phase of moving internationally, we are yet to see what the next phase will be. Is it 3D printing? Is it delivering via a driverless car? Who knows? What we do know, is that as long as technology continues to evolve and create new services for the online seller, the race for the consumer pound is still very much on.

Phillip Smith is UK country manager at Trusted Shops.


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