The evolution of e-Commerce in times of Pandemic.
Evolution hasn’t stopped since. It has always been in constant growth which, over the years. This has been extremely exponential mainly thanks to the globalization of the Internet. Starting in the 21st century, the Internet was democratized. After this, they began to reach large masses, where households could make use of it. This is where large companies begin to make their online sales.
This phenomenon began to increase. Since then, it was possible to visualize that electronic commerce would be the fundamental pillar of the future of sales for companies. North American retailers such as Walmart and Sears, began to give more importance to their online stores. When this trend of Internet shopping began, most of them were made on a computer from home. But multi-device purchases have rapidly increased and in recent years the mobile phone has been the preferred choice of consumers.
A large part, thanks to applications that today they make it easier for us to navigate. And to find a product we want and even the means of payment. Everything can now be done from a simple cell phone, with just a couple of clicks.
When we visualize e-commerce in Chile, we can realize that there was a growth of more than 230% in the last 5 years, and between 2019 and 2020 online sales grew by 50%. According to the analysis of Euromonitor International, this was driven mainly due to the Coronavirus pandemic.
It tends to balance once the pandemic ends, but they will continue to grow rapidly. Between 2015 and 2019, online sales of consumer goods in Chile went from US $ 1,463 million to US $ 3,260 million.
While only between 2019 and 2020, eCommerce in Chile increase to US $ 4,889 million. The great importance that Startups have done in recent years has allowed great technological advances. And also new ways of innovating, which have achieved an evolution of electronic commerce in different areas.
Starting with their innovative websites or sales apps, going through systems of payments that are increasingly consumer-friendly, and innovating with solutions for the customer in logistics, truly revolutionary, such as what we know today as Last Miles, such as the Colombian company Rappi. All these factors have made it possible to greatly enhance electronic commerce.
It is they who have achieved the attention of the most important investors or companies that have bet more on the innovation of young people who today have come to transform e-Commerce around the world. If we talk about e-Commerce, it is difficult not to mention the two greats of this world. Amazon and Alibaba, which have allowed a paradigm shift in the way of selling to consumers. Especially at the tremendous speed to innovate and adapt to the times we live in today.
It is these two e-Commerce monsters that have set the bar very high for all conventional retailers and also, why not say it, for conventional thoughts that did not leave their comfort zone. They have put in check thousands of retailers who have had to close their stores and they are the ones that today set the tone if we talk about electronic commerce.
What’s next for e-commerce?
The automation of the purchasing processes will become more and more limited, allowing the purchasing process to be much simpler and more interactive. The pandemic has accelerated the entry of consumers into electronic commerce in a big way. According to Mercado Libre studies, e-commerce consumers in Latin America have increased by 30%. If we think about these types of consumers, many of them were reluctant to do so before the pandemic because they needed a face-to-face experience.
This is where a phenomenon was born in China called Live Streaming e-Commerce. Which has revolutionized Chinese electronic commerce in the last 10 months. It is simply the live sale of products, a person sells through Live products through different platforms, the most popular Alibaba. This phenomenon has already reached 10% of all e-commerce sales in China.
We can also continue to see growth in the process of scheduled purchases that we already see in some white goods. Such as refrigerators, where we can place orders connected according to shortages. It is already a reality that grows more every day. This is also driven by the large amount of data that systems manage today. And our purchases can be programmed according to our needs.
Augmented reality and Artificial Intelligence such as Machine Learning will be constantly evolving and great advances. Solutions will be achieved for customers, the increase in profits will be dizzying it is most likely that later we will be able to try on clothes in virtual stores. As well as know what a perfume smells like and reach the consumer in all categories of products and services.
Changes in e-commerce that accelerated with the pandemic
According to an investigation carried out by Tiendeo. An e-commerce platform for retail, the pandemic meant a great growth in online purchases, taking into account that more than 8.2 million people bought online at least once during 2020. Even This year, the increase in transactions increased by 51% in relation to the previous year.
This is one more indicator of how global confinement made buying online something much more natural than before, with everything that also implies dispatch, warehousing, and the user experience on the different platforms. In all these, technology is key, both software, computer security, cloud applications, and connectivity, among other elements.
Just this Friday began Black Friday and for about a month, thousands of stores and companies will be preparing their technological platform for Christmas. To get an idea, Adobe’s Digital Economy Index projects online Christmas sales in the United States. To reach $ 207 billion from November 1 to December 31. Globally, online spending is expected to reach the US $ 910 billion this season. A growth of 11% from the previous year, Research even indicates that more than US $ 4 trillion will be spent globally in all of 2021 on e-commerce.
How did e-commerce evolve as a result of the changes caused by the coronavirus?
According to Fernando Rode, CX Business Architect, SAP Latin America Region. The pandemic, without a doubt, strongly challenged consumer companies, but it also created enormous opportunities. After almost two years of the global arrival of Covid-19, one of the great learnings was the need to place the client even more at the center of the service, considering each of their expectations.
A bad customer experience will have been just a promise with high costs for trust in that store, ”explains Rode. The customer experience is clearly a priority for consumption. While it has always been an important factor, today it is key. In this so-called “customer journey” the trust of consumers can be easily lost and seriously affect loyalty. “Faced with the health crisis, companies had to quickly adapt and redesign – in many cases completely. Their online sales sites to provide new and better experiences,” says the SAP executive.
The health situation helped advance the penetration of online shopping in Chile. According to the Santiago Chamber of Commerce (CCS), last year e-commerce registered a 55% growth in goods and services, contributing 6.3 points to the improvement of commerce. It is even expected that by 2023, it represents 20% of total commerce sales.
These results in the country, in addition to being a consequence derived from the conditions imposed by the pandemic, correspond specifically to the advancement and leadership of Latin America in terms of online searches.
Despite these encouraging figures, Sergio San Martín, country manager Chile, Peru & Argentina at Tiendeo, believes that it is possible to continue making progress and reduce the gap in relation to other countries in the region. “You can see the dynamism of the regular consumer, But at the same time new buyers were added, in both cases, there is a greater frequency in online searches prior to making the purchase,”.
Increasing consumer demand for online shopping is occurring as retailers grapple with severe supply chain challenges, from crowded ports and cargo delays to overseas manufacturing disruptions. Precisely, this has been another of the great challenges of this industry in the last two years. Adobe’s study indicates that compared to the pre-pandemic period (January 2020).
“Out Of Stock” messages have increased 172% over the holiday season. Of the 18 categories tracked by the research, clothing has the highest levels of “out of stock” currently, followed by sports, baby, and electronics goods.
Security and demand
A crucial point has also been the reinforcement of the sense of security that online platforms give their customers. “For example, my parents are in their 70s. His approach, as well as that of his friends and peers, to the digital economy, was low. The arrival of Covid-19 pushed them to adapt to a digital maelstrom. But they were afraid of the theft of their payment data with credit or debit cards or the use of their personal data to harass them with communications of offers or unwanted advertising “, explains Fernando Rode, and adds:
“If e-commerce stores were not working hard on this, they would not only lose this new segment but others. Such as digital natives, who would also stop preferring them to build loyalty in those businesses. And with security management strict. with clearer and simpler consent policies on the use of data ”. Another area that had to be challenged and to respond to the high online demand is demand planning.
This is a proven tool to increase company efficiency, lower costs, keep inventory levels always under control. And to also fundamentally, guarantee that the customer always has what you need when you want it.
Companies had to improve their forecasts, make better decisions and fulfill one of their fundamental roles to increase their profitability. And this is where technologies such as artificial intelligence, machine learning, and cloud computing became much more apparent.
Anyway, now that the country is experiencing fewer restrictions, as a result of the advance of vaccination in the national territory. Despite the fact that people begin to go to shopping centers, online shopping will remain a trend among consumers. Which It is here to stay ”, concludes San Martín.
It turns out that the corona pandemic only accelerated existing developments in online trading, but also opened up new categories. The online sector will certainly not grow as fast every year as it did last. But it will definitely continue to grow. This will become more relevant and penetrate more and more new areas