What is the future of Ecommerce?
The global pandemic has closed down the modern world like never before, but in some ways the economy has been extremely fortunate. Had the virus developed in a prior decade without the digital platforms available there would have been little hope of a swift recovery.
As it happens, there have been small shoots here and there – one saving grace for the economy has been the success of ecommerce and small businesses online. The growth in these enterprises has been unprecedented in the last twelve months, but how reliable are the profits going forward and is it worth the investment?
Sales are up
Before the pandemic hit ecommerce was a growing industry, but no one could have predicted that acceleration occurred in 2020. Many established ecommerce businesses saw growth of between 30–50%. Furthermore, new ecommerce businesses initially thrived.
Does this mean that every retailer should abandon their brick and mortar store and set up an ecommerce business using eigenrun? Probably not although it would hurt either. The pandemic growth wouldn’t last forever, but consumer behaviour is changing.
Categories are key
As with general retail there are trends in commodity popularity based on social and environmental factors. When it comes to e commerce these trends are more significant. The success of ecommerce brands largely depends on the niche products.
This is one reason Amazon leads the way with ecommerce, it has cornered the market with almost every commodity, offering unbeatable prices and super fast delivery. Still, opportunities exist to outcompete Amazon in certain niches.
Small businesses work well
Since the pandemic hit it’s small businesses that have thrived instead of their lumbering counterparts. This is due to the speed of change and the ability of a small business to adapt to that change. Larger businesses were slower to react.
A changing business environment in line with accelerated digital changes means that small business could be more profitable in coming years. Uncertainty in the marketplace means that more flexibility is needed to survive and smaller business adapts more quickly.
Advertising is changing
The way advertising is changing to consumer mentalities is key to understanding the future of ecommerce enterprises. Through analytic tools companies can now see what items are relevant to individual consumers – targeted marketing indicates that ecommerce has a bright future.
Analytical advertisement is already manifestly valuable to e-commerce companies but as with all digital infrastructure it is continually growing and unfolding. As digital advertising becomes evermore sophisticated, the world of ecommerce can only benefit.
Consumption is changing
The growth in ecommerce sales over the past year has been unprecedented, but is there any sign this will continue after the Covid-19 vaccine has been rolled out? The answer is not clear cut. Most analysts expect the numbers to fall, but consumer behavior has changed.
It’s expected that people will return to in-store shopping when the pandemic lifts, however, the convenient habits of online commerce are likely to remain. Ecommerce is not going anywhere, anytime soon, meaning that retailers should attempt to split the difference where possible.