The Future of E-Commerce: Online Dominance and the Evolving Role of Retail Operations
June 23 2023
Retail operations will act as touchpoints to initiate customer interest, leading to subsequent online purchases. It is important for brands to recognize that building an online presence requires effort and strategic marketing.
The future of e-commerce in the next 3 to 5 years will be shaped by the ongoing shift from traditional retail to online platforms. We have witnessed a significant transition where many stores are now more present online rather than on the streets. This trend is likely to continue, resulting in a higher proportion of online purchases compared to in-person transactions.
Retail operations are increasingly serving as marketing tools and often operate at a loss. Drawing a parallel with the banking industry, where physical branches are ubiquitous but frequented by fewer customers, retail stores are becoming symbols of brand presence rather than transactional hubs. Seeing a retail store can create a sense of trust and familiarity, leading customers to engage with the brand online from the comfort of their homes after a long day at work.
However, simply opening an online store does not guarantee traffic or success. With the ease of setting up online businesses, the competition for attention and customers has intensified. In contrast, physical stores in malls benefit from a captive audience that visits for various brands, allowing for greater brand awareness.
The role of retail operations, both physical and online, is evolving into that of a loss leader—a marketing expense aimed at capturing customer interest and prompting further exploration. Once a potential customer encounters a brand in-store, they are more likely to conduct online research, such as visiting the brand's website or searching for reviews. Ultimately, the majority of buying activity will occur online, making it crucial for retailers to focus on creating a seamless online experience that complements their offline presence.
Therefore, the future of e-commerce will see continued growth in online retail, with a greater emphasis on effective online marketing, user-friendly websites, and post-purchase engagement strategies. Retail operations will act as touchpoints to initiate customer interest, leading to subsequent online purchases. It is important for brands to recognize that building an online presence requires effort and strategic marketing, as opening an online store alone does not guarantee success in the crowded e-commerce landscape.