E-Commerce Competition: Where Is E-Commerce Today And Where Is It Going?
2020 had the biggest increase in e-commerce year-on-year sales ever recorded and many analysts believe that the growth will continue. Digital sales at Target grew by 141% in Q1 2020 and 50% in Q1 2021, with sales growth led by apparel, home, and hardlines (data from Target Q1 results).
Many believe that consumers with a positive experience of e-commerce during the pandemic will now prefer the online option, even as traditional retail returns. And if Target is any indication, they are onto something. The UN asked almost 4,000 consumers in 9 countries for their views and there was a general agreement that now that they have experienced e-commerce, they will continue to use it more often than in the past.
This hypothesis is also supported by the following global trends:
1. Smartphone penetration: Gartner data suggests that there are now over 6 billion smartphones, tablets, and PCs in the world. Over 62% of the entire global population owns a smart or feature phone and analysts believe that the number of phones will surpass the global population by 2025.
2. Mobile lifestyle: consumers have embraced mobile services to the extent that this is changing consumption patterns and the use of cash. In response, companies like Tesla, Microsoft, PayPal and Amazon are increasingly accepting Bitcoin as payment for products and services.
3. Social Media: brands are finding that they can build an ongoing emotional connection with customers, rather than focusing only on transactions. This is an important trend because it reinforces the focus on customer experience and the entire lifetime value of a customer, rather than engagement as just customer service.
For years, companies such as Best Buy and Home Depot have been preparing for the increase in online shopping. Back in 2015, Home Depot began working toward transforming their retail experience to focus on a digital, single, interconnected experience across their e-commerce platforms and in-store. By listening to the voice of the customer, Home Depot was able to identify a “Do It For Me” segment, interested in full-service installation, quality products and less hands-on home improvement experiences. This segment opened the door to a digital-first shopping journey which inspired Home Depot to invest in an intuitive website and mobile app experience. Home Depot’s go to market strategy included emphasizing the quality of their CX to build greater customer loyalty and consumer engagement.
Leaders across industries who began their commitment to digital long before the pandemic were able to capitalize on their investments and will continue to see steady growth moving forward. A few of the boundless CX practices they have adopted include:
- Listening to varied sources to understand the voice of the customer and creating feedback loops to ensure key insights are being communicated regularly to product teams, sales and marketing, and leadership
- Leveraging artificial intelligence to better understand consumer needs and create personalized experiences, sometimes through conversational interfaces
- Using digital tools and solutions including automation to offer immediate customer support, offer self-care options and leverage the expertise of highly skilled support agents strategically
By: Isabella Mongalo, Director of CX Strategy at Transcom