Advances in e-commerce drive evolution in retail

Progress in e-commerce drives evolution in retail

E-commerce has brought the shopping experience within reach via laptop and mobile devices. This has completely changed the way consumers store. Research shows that 88% of consumers worldwide believe that the experience a company provides is as important as the products or services offered.

This article previously appeared at www.retailtrends.nl. By: Lena Olivier and Nino Bergfeld, Salesforce. Image: stock photo.

Where the online store used to be one of the channels you had to have as a business to meet consumer expectations, today it is so much more than that. It's the core of your entire spectrum of customer contact offerings. That overall environment is so complex and comprehensive that companies can hardly rely on their own knowledge regarding what is possible. There is simply too much innovation. At every contact point within the offering, something different is possible: immersive content, virtual stores, social commerce, live engagement, sustainable returns, chatbots - you name it. On top of that, retailers are also dealing with a whole new generation of consumers who store completely differently than previous generations.

Gen Z as the new normal

An important insight businesses are grappling with is that younger generations don't necessarily need to own things to get value out of them. Instead, they value experiences more and are more likely to want to rent or share stuff. Looking at the next generation, Gen Z, we see a socially centered generation. They gather their information in a very diverse way; social media, communities and friends are their main sources, rather than traditional news sources or publications. This is evidenced by the fact that YouTube and TikTok are more popular than TV.

This means quite a bit for companies. They must comply with these trends, evolve and move forward and future-proof their data. With companies no longer allowed to use third-party cookies, understanding the new data age is more important than ever. And just find other ways to get and use information from the new generation to continue to reach them effectively. That requires strategic moves as well as a commerce environment in which to make those strategic moves.

The eve of a new e-commerce era

By better understanding the opportunities within e-commerce and, in doing so, also understanding the new generations, companies can face this new era. Consequently, there are several trends to capitalize on as a company, and within those trends, numerous opportunities for making strategic choices:

1. Long live the store: Stores are focusing less on product assortment and more on providing an outstanding customer experience, such as expert service, customization and a good fit between the online and offline experience. In the store itself, the experience aspect is taking on an increasing role. The secret door in the Camp toy store in New York, for example. Or a sports store chain where you can measure the waterproofness of your jacket under a shower.

That physical experience is exactly why online brands also open physical stores. And we haven't even mentioned all the technological applications in-store. Think robot arms, holograms, interactive experiences and exclusive digital products in-store, which provide brands with an entirely unique experience. But at the very least, it starts with digital screens in the store, or providing store associates with state-of-the-art tools, technology and data. These types of applications will be critical to deliver on this future retail value proposition and provide a personalized and seamless customer experience.

2. New realities and immersive content: The rise of the metaverse, where users can immerse themselves in digital environments and experiences, highlights the importance of creating immersive and engaging experiences that can transcend the physical world and resonate with younger generations. Platforms such as Roblox and Fortnite have amassed millions of daily active users, with more than 50 percent of Gen Z visiting these virtual worlds at least once a day.

These types of gaming experiences are already applicable in e-commerce environments as well. In fact, you can already use branded avatars to customize the look-and-feel and character style of shopper avatars in virtual stores. This is to make consumer shopping more appealing, social and more in line with consumer expectations for gamified environments. Branded avatars take virtual stores to a new dimension by adding more personalization and connectivity. It enables brands to bring the metaverse directly to their websites, ensuring that the virtual shopping experience mirrors physical shopping more than ever.

3. Trust relationships and communities: Younger generations, such as Gen Z, distrust large companies and their often impersonal marketing messages. Colleagues, friends, influencers on social media and user-generated content and reviews are their trusted sources of truth when it comes to buying a new product or service. For example, a number of brands deploy trusted experts who compile and send personalized recommendations (sometimes at discounted prices as an added incentive). This can be triggered by a customer via live chat on a website (inbound) or by the expert (outbound) to their trusted customer base via social media. Sports heroes, for example, who make recommendations regarding fitness equipment or sports gear.

4. A life of convenience: Modern stores will focus much more on experiences because they are closely connected to other channels such as e-commerce, mobile apps or social media. Once customers have chosen a product, they expect it immediately along with a seamless and convenient delivery and return experience. In addition, live video shopping has finally made its way to the Western world by combining scalability, social elements (e.g. feedback, chat), entertainment, product advice, expert advice and the transaction to provide consumers with even more convenience. Questions about a product? Need styling advice for a product in your living room? By video calling live with a salesperson, they can think with you and provide tailored advice.

5. More sustainability: Logistics costs and high return rates are putting pressure on e-commerce margins and offer great potential for more sustainability. With the growth of e-commerce, we have seen the explosion of online product returns. If you as a company inspect and resell your returns, you are changing the traditional return cycle within retail. This new, circular solution that benefits the entire brand ecosystem provides a boost in sustainability within the retail market; a hugely important focus for Gen Z.

6. Globalization: Global expansion of e-commerce activities is a key growth strategy for many brands around the world to also keep costs down. Entering a new country at full scale and opening a dedicated warehouse, especially in smaller markets, is often too costly and complex. Therefore, many companies serve a new country from an existing distribution center in another country that involves less complexity (tax, cross-border logistics, etc.) by relying on established logistics, technology, people and processes. In addition, you can now put new websites live in other countries, and thus languages, at the push of a button. In the process, payment options are set right along with the local VAT context so there are no more surprises.

In short, the worlds of the new generation of consumers and the new generation of e-commerce innovation go hand in hand. The younger generation, such as Gen Z, demands more than just a faster way to buy products. They seek an experience that is personalized, seamless, meaningful and sometimes even immersive and immersive. Brands must adapt to these changing trends by giving their customers a sense of belonging and offering collaboration. They must prioritize building trust and transparency, and make choices across the Web3 spectrum, such as offering targeted and immersive content and embracing new realities. By doing so, brands can build long-term relationships with their customers, creating a loyal fan base that will drive their success in the future.