(R)etail (R)evolution (Trendwatching)
It has long been predicted that the future of retailing lives in the online world. Going back to the mid-1990s, when consumers started experimenting with online purchasing, forecasts offered by research firms, trade groups, academics and others suggested online retailing would quickly represent a major portion of all retail sales. However, the dotcom meltdown of the late 1990s and early 2000s, along with the recent economic slowdown kept a lid on online sales. Consequently, most predictions have not been met.
But now things are back on track, and just maybe the prognosticators will be right. As discussed in this story, e-commerce is surging around the world. And those who are in the business of making predictions are forecasting even greater growth to come. For instance, one statistic quoted in this story forecasts that by 2016 U.S. e-commerce sales will grow by over 60% while sales in Europe will increase by over 70%.
Of course, research firms have been wrong before so we will have to see if this actually pans out. But this story does offer some very good reasons why these predictions may actually come to pass. For instance, with consumers’ use of smartphones, tablet computers and kiosks, access to online purchasing can occur from virtually anywhere and at any time. This enables purchasing activity to take place throughout the day rather than just at selected times (e.g., consumer does not have to wait until after work to make a purchase). The story also notes that online retailers have made purchasing a more personalized experience with such innovations as product recommendation systems that suggest products based on users’ past purchases or search behavior. Additionally, the expansion of online purchasing has grown in large part because retailers have made it easier to shop for goods that previously were considered hard to buy online, such as clothing and food.
While e-commerce still represents a very small percentage of all retail sales (less than 5% in the U.S.), this story does offer some compelling reasons why online retailing may finally be on the verge of becoming the star that many have predicted.
Now, consumers’ current ‘online’ experiences are of course fundamentally different to those during the early dotcom boom: e-commerce is no longer just about choice, price, convenience, reviews and ratings, but also about everything that consumers look for in any purchase: status, the right product and a compelling experience.
Twenty years from now, what percentage of overall retail sales will be attributed to online purchasing?
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