E-commerce: a game changer for the retail market

The huge success of e-commerce is forcing many retailers to completely reevaluate their approach. How can sellers capitalise on the ever-growing market share of online shopping and what are their new priorities?

The e-commerce industry has boomed in recent years. Ordering a product online and having it delivered to your doorstep the very next day is progressively supplanting the classic shopping model. As a result, retail companies have had to set completely new priorities. To guarantee short delivery times, companies now mainly invest in such things as efficient stock management, optimum product availability and a hyper-personal customer focus.

Integrate or differentiate?

Quite a few major players are facing key choices right now. Should they establish a separate distribution centre for their e-commerce activities? Or is it better to integrate them into their offline division with a view to creating a vast omnichannel sales channel where the offline and online activities feed off each other? We have found that both strategies have their adherents. While some large Dutch retailers such as Hema and Albert Heijn have made the conscious decision to keep both branches strictly separate, others like Blokker and MediaMarkt are going the other way. By housing their online and offline distribution centres under a single roof they hope to make major strides in terms of efficiency and staff deployment.

The ideal e-commerce strategy

Regardless of how retailers structure their e-commerce activities, there’s no denying the importance of a good online sales strategy. The ideal strategy is a mix of factors aimed at making the purchase experience as simple as possible for the consumer. Below we’ve listed some of the key trends.

Ask people why they prefer to shop online and odds are they will cite fast delivery as one of the main reasons. Ordered before midnight and delivered to your doorstep or at work the very next day? It’s the ultimate user comfort for those working full-time. More even, next-day delivery has almost become self-evident.

The promise of swift delivery is a deciding factor in the purchase behaviour of the average consumer. Well over 70% of shoppers indicate that they purchase more in case of next day delivery or - even better - same day delivery. So it’s not surprising that retailers are making fast delivery one of their top priorities. It is estimated that in ten years’ time, when drone deliveries will have become standard, some 40% of all ordered packages will be delivered within 2 hours.

A mix of channels

Reaching consumers takes more than just one channel. A 2017 survey by the Harvard Business Review among 46,000 American shoppers showed that no fewer than 73% of respondents use a mix of offline and online channels to order their products. Omnichannel shoppers opt for the personal contact of physical shops but only after comparing prices online via an app or mobile site. Moreover, in-store they want the option of using digital tools such as an interactive catalogue or a tablet. The attraction lies in the combination of channels: people want to shop online and collect products from the store or order them in a shop and have them delivered at home.

More than half of online consumers are already looking for products via a mobile channel. It is expected that before long, mobile purchases will become the dominant form of purchase. This means that in the future a user-friendly mobile website or an app will become even more important in reaching consumers.

The next challenge: sustainable delivery

More e-commerce will inevitably boost the number of home deliveries and therefore the density of road freight traffic. The biggest challenge for the e-commerce sector is obvious: how can the ordered goods be delivered to the end consumer in a smooth and environmentally friendly manner? Part of the answer lies in an efficient urban distribution with robots providing sustainable last-mile deliveries. Developers of logistic real estate can play a major role in this evolution. Goodman is opting for an ambitious approach that focuses on modern logistics hubs on the outskirts of city centres. Together with our partners - from haulage firms to e-commerce companies - we strive for a greener and more sustainable logistics sector.

The e-commerce industry is evolving at breakneck speed but so are the demanding consumers: as the retail industry is taking things to the next level, consumer expectation patterns are simply growing in tandem. In other words, the retail industry has no choice but to keep evolving. After all, customer is king, even online.