With e-commerce, everyone stands to gain
As shopping online becomes increasingly popular, retailers begin to lose out
E-commerce is now a staple avenue for shoppers in most countries and for many categories.
The size of the global e-commerce industry is expected to top US$2 trillion (S$2.8 trillion) this year, according to eMarketer.com.
The pace of growth is 24 per cent year-on-year and Asia is at the forefront of these leaps, accounting for about 50 per cent of the e-commerce market.
So, does everyone stand to gain in this non-stop party? It seems so.
Shoppers are clearly celebrating the convenience, choices and promotions.
As payment systems and delivery mechanisms start to gain simplicity and maturity, buying anything online is a no-brainer now.
Everyone is picking up the habit. From simple product-list formats, the sites are enhancing the utility to include selection advice, user reports, self-sorting (bestsellers), choice guides, online chats and so on.
No-questions-asked product return policies are the new standard in most countries. Worries over delayed or damaged deliveries are minimised by smart deliverers who are sharpening the practices continuously.
Amidst all these, the original advantage of better prices remains intact for most categories.
Brand marketers are celebrating too. They have found the perfect channel to sell their products or services, without the hassle of physical space, distributor tie-ups, inventory management at multiple locations, expensive point-of-sale advertising or retail and logistics infrastructure.
There are now companies using online as their only channel of sales and distribution. Banks have new access routes to consumers.
Digitisation has saved them a lot of sales and distribution dollars.
A small brand owner or manufacturer is able to reach consumers with practically the same effort and costs as a large player. This has created new competition for some established companies and created new business opportunities and with it, entrepreneurial jobs.
The information technology companies are having a big bonanza writing new programmes and systems for e-commerce enablement.
Many plug- and-play platforms are now available for companies to start their business instantly.
Large brand owners spend millions of dollars to make their portals vibrant, convenient, unique and evolving.
As ease of buying is a critical factor in repeat buying, there is a technology race to secure competitive advantages in this. Artificial intelligence and intuitive algorithms are driving this mission.
Drones and droids (automated pedestrian-like wagons that use the footpath) are likely to become mainstream modes of delivery in the coming years.
Similarly, virtual and augmented reality gadgets will be used by every shopper to get a replica of the physical store feel.
Are there no losers in this game, who may have to sit out the carnival?
For the first time, stores are closing down in Manhattan's Fifth Avenue. Prestige brand Ralph Lauren announced the closure of its flagship Polo store recently.
With physical shoppers gradually decreasing, companies are questioning their Fifth Avenue strategy.
With this, the rentals are on the decline. Very soon, real estate prices there will head south.
Orchard Road in Singapore is showing signs of such a twist as foot traffic falls.
Skill sets are evolving too. Companies now seek young digital marketers who are device-savvy and Internet-savvy and reflect the ethos of a youthful business.
Old-fashioned marketers are still chugging along, but their number is bound to reduce. You do not need a large distribution organisation and expert if you are taking the digital track significantly.
Similarly, traditional advertising is giving way to online advertising and morphing further to social media advertising. The different principles of these media call for new skills.
The resultant changes in brand and marketing management will edge out flat-footed old managers.
With the advent of digital-only marketers, even the job market could shrink as organisational models undergo paradigm shifts.
It is now possible to outsource virtually everything and run e-commerce ventures with a lean crew.
The writer is a business consultant. This is an abridged version of an article that was published in The Business Times yesterday.