By Tony Preedy, Managing Director, Fruugo
As someone who has worked in the retail industry for decades, the reopening of non-essential shops in recent months has been a huge relief.
However, the fact that it is now legal to accept customers into physical stores does not necessarily mean there will be a return to pre-pandemic footfall. Not only will many consumers continue to be cautious despite the lifted restrictions, but many have also grown accustomed to the ease and flexibility of online shopping and will not be keen to go out to shops as often as before.
Businesses in the retail sector have also adapted to this new reality, focusing more than ever on adapting their business models to allow for a mix of physical and digital sales. Some have even chosen to go online completely, leaving the High Street for the cloud.
Looking ahead, retailers need to do their best to continue digitising in both the short and long term. It is the clearest way forward to ensure lasting success in an industry that will continue to deal with massive change for years to come.
A long time coming It is impossible to escape that ecommerce generally, and online marketplaces specifically, would have played a crucial role in keeping the retail industry afloat going forward even without COVID-19.
The digital transformation of the retail sector has been ramping up speed for more than two decades now, and the number of consumers going online to shop has steadily risen. However, COVID-19 has accelerated this development, forcing businesses to adapt at record speed.
The main engine of the ecommerce boom continues to be the expansion of marketplaces as a trading channel for retailers, with more than two thirds of all online shopping revenue predicted to be generated on third party platforms by 2026.
This is becoming an increasingly important force as it offers retailers the opportunity to avoid having ‘all their eggs in one basket’ by diversifying their sales channels. Marketplaces also encourage international selling, removing geographical constraints by simplifying copy translation and currency conversions while also simplifying the process of connecting with global customers through search engine optimisation.
This is key to many businesses that need a certain level of support as they face the learning curve associated with expanding internationally. Once they have been given that initial guidance, cross-border selling is now easier than ever for merchants who saw it as an impossibility just years ago.
While the last year has been tough, the digitisation of retail – which is now picking up speed – is largely positive. The international nature of ecommerce is leading to growing levels of trade, offering ample growth opportunities for those previously bound to footfall on their local high street.
Digital retailing through varied channels, paired with good customer experience in store, will be required to maximise success going forward.
Retail has always been a flexible industry that has had to adapt to both social and technological developments, however this time it is almost entirely due to the rapid growth of ecommerce which is heralding a retail economy that will become increasingly dominated by marketplaces.
This new way of trading has strategic implications for how brands are built and how supply chains managed, and businesses that adapt to this new paradigm are the ones that will thrive.