With advancements to digital technology, the industry has soared in both its capabilities and popularity among shoppers. The U.S. Department of Commerce shows that e-commerce sales represent 13 percent of total retail sales and 49 percent of retail growth.
The expansion of e-commerce in the retail market has made quite the impact on traditional brick-and-mortar retailers, forcing brands to re-think their business strategies and knowledge of the digital backend.
Whether a big-box retailer or specialty seller, e-commerce has changed the name of the game for everyone. Even with all the transformation, there are still opportunities available for retailers big and small.
Looking Back And Moving Forward
It’s not a simple task to predict where commerce will go next — from shifting buying habits to the next innovations, like voice commerce and monetizing the Internet of Things (IoT). As shoppers increasingly prefer the convenience of shopping whenever/wherever, some big-box retailers have been left in the dust as a result of their deficient web tactics.
For example, Sears wasn’t able to merge its physical presence with the digital retail revolution, floundering over a critical element of growth for its business. Though the company tried offering web and mobile services, competitors like Best Buy and Target were able to capitalize efforts in ways Sears couldn’t grasp. Unfortunately its inability to keep up with the shifting times led the former retail pioneer to file for bankruptcy. Additionally, a number of other big-box retailers have already been forced to close their doors due to similar reasons.
However, there are a couple hoping to rise from the ashes as seen with Circuit City's re-emergence as an e-retailer and the potential return of Toys “R” Us. To be successful, these sellers must ask themselves, “What do we need to do differently?”
Given the marketplace consolidation of the Big Three tech retailers — Amazon, Walmart and Best Buy — legacy relaunches like Circuit City should think and execute differently from these giants to remain competitive. A major component of success for big-box retailers depends upon their relationships with partnering vendors. Unlike the Big Three, which have a wealth of products available for purchase but don’t necessarily “romance” a particular product in any way, there’s an opening for other sellers to be the conduit for brands. They should act as allies by preserving margins, reinventing market development fund (MDF) programs, and even becoming a launchpad for new products. Oftentimes big retailers lose sight of the actual brands because they’re consumed with their own growth — something all brands should keep in mind as they plan their channel strategy.
Modern Retailers And Today’s Reality
It’s undeniable that Amazon cemented its place in retail at the dawn of the 21st century. The company’s reach has grown astronomically by delivering a great customer experience and product value. It’s transformed into a ubiquitous force within the marketplace. Selling everything from electronics, clothes and now food, brands feel the pressure to partner with the behemoth and their third-party retailers in hopes of extending their reach.
But contrary to what many believe, brands must not solely rely on retailers. Though players like Amazon and Walmart provide important channels, they can’t offer a shopping experience like the brand would itself. With that said, a multi-pronged approach that includes a direct-to-consumer (D2C) e-commerce channel serves brands best.
There’s much strategy involved in e-commerce and it’s not enough to simply create a website or implement mobile technology. While delivering these tools, a value proposition must be paired with a superb customer experience, as today’s shoppers are looking for personalized, connected and convenient journeys.
Direct e-commerce channels are the most strategic play for brands when it comes to controlling their business. The channel gives them the opportunity to build unique relationships with consumers that transcends a simple transaction. It’s all about the customer experience. It’s vital for brands to foster long-term connections with shoppers, leading to increased profits and longevity.
Related: Why Consumer Tech Won’t Get Amazoned
It hasn’t been an easy journey for many companies to digitally transform to support e-commerce operations in many instances, but lessons from the past can only inform the future. Customers feel more empowered today because of the influx of choice and the emphasis on personalization. Looking ahead, there’s a great deal both large and small businesses must do to capture shoppers’ attention, but the doors for creativity and innovation are wide open.