María Lucía Villegas
3 min read.
One of the biggest changes we experienced in the past year was the way we consume. For many different reasons, including sociocultural changes and technology innovations, companies are now investing more in new sales channels and improved customer experiences.
E-commerce has taken the main role in these new practices and we’re here for it. A recent study reported that e-commerce sales are predicted to reach nearly $5 trillion by the end of 2021 and that there are approximately 24 million e-commerce stores around the globe.
While the market continues to grow, it is important to note that the majority of transactions completed are being made by younger generations and those familiarized with technology and the digital ecosystem. This implies a challenge that is yet unsolved by companies: getting older generations to trust digital channels as much as young consumers do.
E-commerces have many factors on their side when it comes to convenience and agility, which are two of the main reasons why consumers are choosing to make purchases online rather than in physical stores. Even when it comes to products that one would imagine request physical interaction before purchasing. One unique example is the housing market in Canada, where we can see an increase of Proptech innovations and startups and a report shows 20% of house buyers only need an online tour to buy a property.
But while it is clear that the real estate market has a long way to go in matters of e-commerce, other industries are taking the lead and leaving a mark in the way we consume online: fashion, food and groceries, and entertainment.
The fashion industry, which includes web stores selling fashion items like clothing, shoes, and accessories is the most popular e-commerce industry in the world. Research by Nielsen Group estimates that sales will reach $1003.5 billion by 2025. Although this is not a surprise, because this industry specifically has been a pioneer in e-commerce, there are a few things we can learn from them based on the actions taken in the past year.
For starters, they’re not afraid to try new things. During quarantine, we saw different innovative ways to increase sales, like online showrooms and the implementation of AR to develop a complete consumer experience. They know their consumers very well and are working by the hour to fulfill their needs and expectations having in mind every stage of a purchase, even revolutionizing with packaging strategies that are now a driver to consumers.
Opposed to fashion, the food and grocery industry was just starting to experiment with online channels when they were forced to close down all their physical stores and start using the digital ecosystem as their main source of income. Last year, e-commerce grocery sales registered a 22% growth rate in the US and it is expected that it doubles this year.
We started 2020 with online grocery shopping basics, now we can find platforms that meet every need, from stay-at-home restaurant experiences and grocery online shopping to specialized marketplaces. The market grows in variety and benefits like delivery time, discounts, and new business models that include subscriptions or unique functionalities.
The food and groceries industry did an amazing job reading their consumers, identifying what they needed and how they needed the service to be like delivering online platforms that provided even better experiences. By iterating and being open to any ideas, now it is the second-fastest-growing industry in e-commerce.
Last but not least, the entertainment industry. Starting this year the odds weren’t so much in favor of this industry, being the most affected by the pandemic and using their last resources to survive in a world where physical wasn’t an option most of the time. But there was a clear need for entertainment and given the circumstances, they had to restructure their business models with limited time and budget.
The entertainment industry did their research, estimated their resources, and started acting. There was a shift to streaming, gaming, and user-generated content that all led to e-commerces and new digital products that in some way replaced physical experiences.
From the entertainment industry, we can learn that every idea is valuable. They took the time to generate as many ideas as possible to survive and start implementing them. Now, they are stronger than ever and not only survived but thrived with innovations and complementary products and services that allowed them to be one of the biggest industries in the digital ecosystem.
What we know now, proves that when taking strategic and conscious decisions about what to do next really pays off. Being able to generate ideas, iterate, listen to the market, and be realistic with our resources is the key to success, always having in mind that every company is different and needs to take different actions.
What is your next big move?