Digital disruption: The e-commerce revolution and how to prepare for the future

Digital disruption is the new buzzword these days. It wasn't long ago when Indian buyers were solely reliant on offline stores for their necessities, but the situation has drastically changed in recent years. Because of digital disruption, people's preferences have shifted to buying almost everything online. Digital disruption is the reason why preferences and comfort have switched to buying practically anything online. It has proven to be a boon for retailers caught between well-funded competitors and a highly uncertain market. The digital transformation never ends in the life of a retailer who keeps their business up to date. Kudos to the proliferation of the internet, smartphones, and FDIs!

Disruption occurs when an industry, way of doing business, or ecosystem is significantly challenged by newcomers or incumbents who have mastered certain skill sets. In this article, we’ll be highlighting the trends around digital transformation and disruption in the context of the upcoming mega-market for e-commerce. 

1. Data-Driven Commerce: 

It involves providing a richer and more seamless client experience by maximizing the use of data. There is an abundance of data available everywhere. In fact, we contribute to it on a daily basis by purchasing online and updating our whereabouts, thereby leaving a digital footprint every time we browse online. 

In simple words, a modern shopper takes many paths to complete their purchase journey. They browse items online, visit stores, go through reviews, place an order, and post about their experience on social media. Similarly, a brand selling on ecommerce, as well as each platform will also have data relating to their own growth and hygiene metrics. This results in massive amounts of important data being stored in silos across all channels.

Businesses of all sizes can take advantage of this humongous data available and can create value out of it. This analyzed data can provide real-time insights which can further be utilized to strategize growth, plan relevant promotional offers for their customers, manage prices, market products, plan inventories and much more. 

2. AR disrupting the way customers shop:  

AR is one of the innovations that is entirely going to change the way we experience eCommerce now. You can already see how that new couch you’re planning to buy would look in your living room, and can decide what color your kid’s room walls should be by actually trying it just with the help of your smartphone. Sounds interesting, right?  It is surprising how fast things are changing to make the online shopping experience for a customer as seamless and exciting as possible to remove barriers to purchase. For instance, some e-commerce marketplaces have created 360-degree panoramic environments for their customers (the insides of physical stores, demo spaces with furniture in them, and more). During their time here, customers can "walk" about and choose things to learn more about it. Using augmented reality, the boundaries of online shopping are fast being shattered. Thanks to these Ar applications & eCommerce, interested shoppers can get a far better idea of a product helping them make a purchase.

3. The primary source of revenue for an increasing number of brick-and-mortar retailers is e-commerce.

Amid lockdown, a large percentage of people worldwide relied on online resources. High demand for products such as hand sanitizers and everyday essentials, along with hurdles to offline purchasing, drove customers to migrate to online shopping. This led to an immense surge in online retail. As of the second half of April 2020, online retailers saw a 68% increase in revenue from the same period the previous year. By the end of August, industry experts began to speculate that the shift in consumer spending habits from offline to online was permanent. While e-commerce sales were booming worldwide, the long-established packing and shipping processes crumbled as social distancing led to a reduction in warehouse workers. Existing eCommerce outlets improved their workflows and warehousing solutions in anticipation of future chaos, and businesses without websites introduced their D2C online stores. Even before the pandemic, e-commerce was expected to win. Economists now predict that retail eCommerce sales will reach 476.5 billion dollars by 2024, up from 279.7 billion in 2017. For brick-and-mortar companies in the modern world, digital transformation is far more than a trendy buzzword. With much large to mid-sized retail moving online, it’s now the small retailers that will drive the next wave of digital transformation. Government initiatives like ONDC as well as private solutions for easy digitization will enable small businesses to make the most of the digital transformation as well. 

4. Increasing reliance on non-traditional payment methods.

Cash and credit cards have had a century-long monopoly on consumer spending. However UPI has led the recent disruption crossing the $1-trillion mark in transaction values for FY 2021-22. Alternative payment systems, such as blockchain platforms, are the new recruits. They are quite popular, particularly as much as the buy-now-pay-later (BNPL) services, which have a big following among the millennial population these days. To be competitive, modern e-commerce businesses must provide their customers with a variety of payment alternatives, including BNPL possibilities. This component of digital transformation is especially crucial for sellers of luxury goods and fashion, whose products usually fall into the want-but-not-need category.

5. Personalized Products

It’s no surprise that eCommerce is perceived as less intimate and less about the personal experience than offline retail shopping, as humans crave physical contact. Browsing a store, feeling the products, and trying them out helps the consumer identify and select a product they need. eCommerce businesses have worked hard to replicate the physical store appearance by making their websites more interactive, personalizing the range displayed, being accessible and encouraging two-way communication and customer engagement.  

Customers today lean towards brands that make them feel like they are heard and understood. This is where personalization comes into play. You must have seen some sites that provide product recommendations based on a user’s search history. This helps tailor the eCommerce experience for your customers based on what they like and are interested in. Brands also offer customization options for a shopper to design or change what they are purchasing to their needs. For example, Nike’s Lunar glide shoe edition allows customers to design their own shoe in their favorite colors. 

Wrapping Up 

Technology and innovation will be the driver of the e-commerce revolution in India.  India is at the cusp of an e-commerce revolution. Although e-commerce has been making the rounds in the country for over a decade, it is in recent years that an appropriate ecosystem has begun to fall in place. Factors such as internet access, staggering penetration of mobile phones and robust investment have driven the growth of this industry and if current projections are anything to go by, India is enroute to becoming the world's fastest growing e-commerce market. Players who are able to adapt and innovate in the face of these changes will be in a better position for success.

The article has been written by Punit Sindhwani, CEO, Paxcom