The last few years saw an enormous spike in e-commerce. Total European online sales soared to €633bn in 2020 – and that growth is forecast to continue its upward trajectory even further this year, with an expected growth rate of 11%. But with experts predicting something of an economic slowdown due to a mix of supply chain issues, low consumer sentiment and rising inflation, is it feasible to maintain that growth as we head into next year? And what will be the ecommerce strategies that will see the most success moving forwards?
People are spending more time than ever online, but with people still yearning for more social experiences, it’s worth noting the huge rise of the global social commerce market, worth around $492 billion in 2021. Social commerce growth is projected to increase at an annual rate of 26% and the market is expected to reach a staggering $1.2 trillion by 2025. Shopify research shows that 49% of brands plan to invest more in social commerce this year, so what strategy is best for your brand?
Brands are also looking at how to drive greater efficiency, resiliency, and agility into the retail supply chain. We all know that disruption is contributing to rising costs. According to Procurement Tactics, the number 1 cause of global supply chain disruption is mergers and acquisitions at 66%, with extreme weather coming in second at 41%. This is expected to increase with climate change. Retailers need to get ahead of these issues. One solution could be omnichannel fulfilment, with 59% of retail supply chain executives say they are looking to invest in this technology.
In fact, it’s now a sprint to get product from manufacturer to customer, but a nationwide shortage of haulage drivers, a lack of available warehouse space, and rising consumer demand means leaders must be innovative in their approach. Just a few months ago, research by SAP revealed that almost every (98%) UK organization admits their supply chain needs improving, and over half (58%) think their supply chain needs significant improvement. And with Deloitte reporting that 73% of CEOs see the skills shortage as the most likely source of disruption over the next 12 months. Retail executives must act now.
Looking ahead, we learned that nearly all retailers (96%) are planning to invest to make their supply chains more agile and almost as many (90%) want to be resilient by the end of 2022. But further to the challenges already mentioned, research suggests there will be 4 times as many cyberattacks on supply chain software in 2022 than there were in 2021. So how secure is your strategy?
Behaviours and preferences are changing at a rapid rate. Last year, 44% of customers chose to buy from brands that had a clear commitment to sustainability, 41% chose to buy from brands that demonstrated commitment to social causes, and 60% of consumers expect same, next or two-day delivery as standard; and 58% of those shoppers expect it to be free. So, what does it take to develop truly customer-centric technology strategies that work from the outside-in? And how do you use data to meet customers where they are?
The demands from the consumer today are for a frictionless and contactless retail experience, checkout-free stores, and ultra-fast and autonomous delivery. Looking more closely at checkout-free stores, research by RBR says the technology is now live in 20 countries and set to grow significantly year on year. The number of stores across the world using checkout-free technology was just over 250 in 2021, but RBR predict use of this technology will grow by more than 90% a year for the foreseeable future, with the number of stores deploying checkout-free technology globally predicted to reach 12,000 by the end of 2027.
With a lot of discussion around the metaverse to web3, retailers are questioning how they can benefit the customer. Gartner named the metaverse one of the top five emerging trends and technologies for 2022, and we can only see this growing in popularity. In fact, global spending on VR/AR, the metaverse’s foundation technologies, is expected to rise from $12 billion in 2020 to $72.8 billion in 2024, and the profit potential for fashion brands in the metaverse is astronomical. By 2030, the value of the metaverse could reach $5 trillion. Fashion brands will need to weigh profits or ethical practices in their decision-making to build an experience that works with their goals. That is where strategic design thinking will factor into the conversation.
So why not join us in that conversation? To learn more about the future of retail, and why we should take pride in it, listen to our recent podcast with Ron Thurston here.
Or join us at a GDS summit. They’re tailored, 3-day virtual event conferences that bring together business leaders and solution providers to accelerate sales cycles, industry conversations and outcomes. Regarding the NG retail digital summits 83% of solution providers said the overall experience of the digital summit they attended was above average or excellent and 83% of solution providers said they would be interested in sponsoring future events.
For more, click here to hear from attendees on how GDS has helped them to achieve their business outcomes.
Continue the debate at GDS’ retail digital summits where we bring together senior retail executives who are actively seeking to share, learn, engage, and find the best solutions. Apply to attend.