The road ahead for online retail and e-commerce
Author: Anant Arora
The digital economy has boomed due to the ongoing global pandemic. Covid-19 acted as a catalyst for driving change across industries. Enterprises realized what is essential and what caters to the ever-changing needs of the customers.
As social distancing became a norm, online e-commerce became inevitable for business continuity. Like other industries, retail businesses too are riding the digital wave fuelled by the pandemic. Owing to the global consumer behavioral shift, in 2020 alone, the total number of businesses that invested in omnichannel experiences spiked from 20% to more than 80%. Order scheduling, contactless delivery, convenient return policies and pick-up service at doorstep have become’ new normal’. Retailers are now heavily focusing on localization, personalization and on-demand availability.
Investing in Digital Retail
Emerging from the global crisis, retailers now want to derive more from their investments by integrating brick and mortar and online strategies. The primary aim is to provide customers with benefit in the offline stores swiftly, at scale and without adding extra costs. Investing in the right technology means focusing on contactless, flexible, and efficient solutions which can improve their in-store experience.
In India, brick-and-mortar stores, and digital stores both follow their own unique approaches. While the former persuades customers to visit the store using personalization and physical experience, the latter provide convenience of shopping from home, greater accessibility and discounted prices. In this scenario, e-commerce giants are leveraging SMEs for delivery and assortment purposes. In turn, the latter get a platform to sell their own products. Also, virtual stores are using advanced technologies to create unique consumer experiences.
Addressing Consumer Privacy Concerns
The true value of data is intrinsically tied to how it is used and applied. With the tech infrastructure being commoditized, data mining is opening new business avenues. That said, it is imperative for retailers to proceed with caution and handle customer data with care. In an age where the consumer has begun selling their data and privacy for loyalty programs and rewards, businesses need to prioritise customer data management. This is more important today as the consumer is more aware.
While the whole world has awakened to the importance of data privacy, India has been a bit slow to catch up. We are culturally an intrusive economy where the idea of personal space is vague. In the west, governments have initiated laws to safeguard people’s personal information, such as the California Consumer Privacy Act (CCPA). As a result, consumer data offers a competitive edge to companies using it internally or extracting monetary gains by selling it to other companies.
A good practice is to inform customers about the data being collected from them and taking their approval. However, companies must also remember that in some countries privacy laws like GDPR entitle consumers to the ‘right to be forgotten’. Therefore, striking the right balance with personalization is key to maintaining consumer trust.
In addition, offering incentives in exchange for sharing data like one’s location and email address will help earn customer loyalty. Free delivery or a coupon for first purchase will make consumers feel that they are being rewarded for sharing their information.
Role of AI & data science in retail merchandising
AI and data science have transformed retail in multiple ways. Knowing customers is now more important than ever. And data can help eliminate customer friction at every touchpoint. Leveraging these technologies for customer’s benefit has helped companies derive a compelling value proposition. AI in retail has empowered businesses with rich data and information that has helped improve operations by a huge margin. This has also led to creation of new business opportunities. In fact, over a 3-year span, AI has brought in significant amount of added revenue in retail merchandising.
Now, more customers have begun their shopping journey online, preferring touchless and convenient purchase options. The pandemic has brought structural changes in consumer shopping behaviour as they are increasingly relying on e-commerce. Changes in category preferences, rise of new ‘essentials’, and emergence of new forms of payments are consumer trends dominating the retail scene currently. E-commerce players enhanced the consumer journey by introducing voice assistants and vernacular interfaces.
Similarly, offline stores now function as an extension to online, and offer experiential buying to consumers. AI robots assist in-store customers in searching for products just like the online recommendation engines do. Thus, as consumer needs shift from mainstream to niche, retailers need to rethink their supply chains and adopt technologies to be more adaptive and responsive to evolving consumer behaviour. From a technology standpoint, rising penetration of smartphones has brought more consumers into the digital economy. Moreover, we now have assortment content available in regional languages, thus overcoming linguistic barriers. Technologies such as AR/VR, voice assistants, computer vision, localization and personalization are gaining a strong foothold as they help simplify shopping for consumers.
In near future, retail is likely to undergo a massive overhaul. Businesses will have an opportunity to redefine the future of online shopping as it becomes all about accessibility, personalised and data driven.
Instead of consumers flocking to the website or app, companies themselves will be available on platforms where they spend the maximum time. This will not be so much about getting the highest downloads, rather leveraging platforms that offer a share of the customer’s mind. Overall, connected commerce will hold sway. Borderless shopping, chatbots, interactive media, and curb side pickup as cornerstones of buyer’s journey will become ubiquitous.
About the author:
Anant Arora is the Senior Director – Technology at Lowe’s India. Anant is a product management leader with global experience in the retail & eCommerce domain. He is an expert in building enterprise products and product teams that touches millions of customers. Besides, he brings strong knowhow in data-driven decision making with a solid understanding of both business and technology. In his previous assignments, he led the pricing product for Target and has worked as a management consultant with IBM and other boutique consulting firms advising clients on – business strategy, sales strategy, automation of supply chain processes, enhancing sales workforce productivity/operational efficiency, among others. Anant often participates and speaks at product management forums, continually learning new techniques and ideas to apply in different business settings.