In recent years, e-commerce has revolutionized all commerce, and retail is no exception. Changes driven by global events, such as the COVID-19 pandemic, coupled with the rise of online sales platforms, have forced companies to innovate, reinvent themselves and provide services that meet consumer needs.
Today on the CREA blog we will talk about the rise of e-commerce in retail, its impact on consumer behavior and how retailers have had to rethink their strategies to reach where their customers are to offer them more than a shopping option: an innovative experience.
The rise of e-commerce
Every year, e-commerce experiences an exponential increase and in 2024 we have witnessed major events that have changed the rules of the game:
- Data analysis technologies have been consolidated and today allow us to better understand and know digital buyers.
- Ecommerce platforms have increasingly narrowed the gap between what customers want and what they are offered.
- Generative artificial intelligence or GenAI has revolutionized the entire business sector, particularly in customer service, and there are increasingly more applications geared towards B2C (business to customer) commerce.
- The focus on customer experience and satisfaction is at the heart of ecommerce strategies and objectives.
- According to Statista, marketplaces have become the favorite platform for consumers to make online purchases, which are usually made from mobile devices.
- The ecommerce penetration rate is 41.8%, while retail commerce takes 19.7% worldwide.
- ESW, the leader in ecommerce in the United States, estimates that mobile sales will reach $728.28 billion by 2025 and will represent 44.2% of retail sales.
Changes in consumer behavior
Ecommerce has significantly changed consumer behavior. On the one hand, the comfort and convenience of shopping from anywhere and at any time, without having to adjust to store hours, has made consumers compare prices and buy a wide variety of products from their mobile devices.
Another significant change is found in the unlimited variety of options available in online stores, which allows consumers to find the products they need, compare prices easily, consider the opinions and recommendations of other customers and generate higher expectations of their brands.
Merging online and physical shopping
In Mexico, most consumers alternate purchases between physical and electronic stores, which has led retail companies to merge the experience between both channels through strategies such as launching mobile applications to speed up purchases, optimizing online stores, expanding payment options.
In addition, physical stores have also become smart with strategies such as providing free WiFi, having QR codes to take advantage of special promotions and discounts, allowing online purchases from the establishment, home or branch deliveries.
For example, a user can buy a product online at midnight, pick it up on the way to work, and if they are not satisfied with the product, return it at night. This is how fluid the e-commerce experience is and the convenience offered by companies that offer omnichannel options.
Beyond omnichannel, this is known as a phygital environment, in which the barriers between the physical and digital worlds are broken down to merge them and create closer, more efficient and connected experiences, in which the advantages of both worlds are taken advantage of.
Technologies at the service of the customer to provide personalized experiences
E-commerce has not only shaken up retail to offer new alternatives for customers to buy products. The high competitiveness in the different commercial sectors has made companies look for differentiators to gain the preference and loyalty of their customers.
Technologies such as augmented reality, data analysis, chatbots that work with artificial intelligence or virtual fitting rooms allow for more personalized experiences, which reduce the risk of returns or complaints from buyers. In addition, the likelihood of consumers spending more than they expected increases by 40% when the shopping experience is personalized.
Artificial Intelligence as the main transformer of retail
Since its creation, AI has revolutionized commerce, from the way of doing marketing and customer service to data analysis operations and business decision making.
In marketing, AI allows retailers to identify areas of opportunity to offer better advertising experiences. For example, platforms that allow generating images with AI to show photographs of furniture on different backgrounds help buyers better visualize the products they intend to buy, in more relevant contexts. These tools allow improving click rates by up to 40%.
Regarding daily administrative operations, AI tools or copilots help increase the productivity of staff in technology-related areas, such as software development.
On the other hand, the combination of data analysis and generative artificial intelligence allows for the generation of customized reports with key information on performance, predictive analysis of demand, sales reports to analyze possible causes of sales declines, and strategies to increase customer satisfaction and company profitability.
Finally, chatbots operated by Gen AI are the latest innovation. These systems recognize the intention of the customer’s message and respond with natural, understandable language that adapts to the needs of the buyer.
For example, virtual assistants like Amazon Alexa have skills to plan an event based on the number of people who will attend, the weather, the budget, make a shopping list and have it delivered to your home. All this without having to pick up a pencil or go near the phone!
Keys to retail success in e-commerce
For retail companies to adapt to the new commercial environment and remain competitive, it is essential that they understand the new needs of consumers: personalized products and services, fast deliveries, interaction with their favorite brands through different channels and transparency to share their opinions and learn about those of others.
The challenges for companies are many, from unifying their customers’ experience at all points of contact, managing inventories to ensure timely deliveries, to collecting data from different sources to unify them, analyze them and obtain a complete overview of the market.
The main challenge is to merge digital and physical services to create efficient, interactive phygital environments that increase both customer satisfaction and sales and results in all their campaigns.
At CREA we are real estate consultants, and what your brand needs if you are looking to invest in shopping centers and venture into the transformation of spaces for retail companies. Our real estate consultant will advise you on how to analyze the potential for success in an increasingly competitive and constantly growing market.
Contact us through the contact form, by email at info@creasoluciones.com.mx or by calling us at 5552778044. Our advisors will be happy to assist you.
