Ten years. That's how far forward the e-commerce space leapt in just the first few months of COVID-19. Granted, it was a change that was ultimately inevitable, as even prior to the pandemic, retail was on a slow march towards digitization.
It's difficult to say whether or not the pandemic's end is truly in sight. But what we do know for certain is that even once restrictions are finally rescinded, there's no going back to how things used to be.
The pandemic has fundamentally changed the e-commerce industry, and ultimately, it's a change that’s for the better. Here's why.
That isn't to say it was an easy road to get here — quite the contrary. In 2020, global retail sales declined by 2.8%, as people and businesses all over the world tightened their belts in the face of economic unrest. Much of this can likely be attributed to the closure of brick-and-mortar outlets, as during that same period e-commerce sales surged upward by 25.7%.
They've continued on an upward trajectory ever since. This year, for instance, the global e-commerce market is expected to reach $5.5 trillion, roughly 21% of all retail sales. By 2025, that's expected to reach 24.5%.
On the surface, those numbers may seem relatively modest. Do recall, however, that this predicted growth accounts for the easing of restrictions and a subsequent resurgence of physical retail. Online shopping will continue to gain ground in spite of this, and it speaks to just how much the industry has shifted. 50% of consumers expect that even once the world returns to "normal," they'll retain many of the behaviors they developed during the pandemic, including the way they shop.
In short, digital commerce is here to stay. The future of retail is neither online nor offline, but instead a blend of virtual and physical into a cohesive omnichannel experience. In light of this, it should be unsurprising that companies are putting more focus, time, and money into their online stores — that many are dedicating the same amount of focus to their web presence as their physical presence.
Social commerce is another area in which we're seeing growth. The increase in social media usage during lockdown did not go unnoticed by retailers. Nor did the fact that platforms like Instagram have released a wealth of tools to help e-commerce brands both promote and sell their products.
One of the most interesting areas in which we've seen technology and retail intersect involves augmented reality. With customers unable to physically travel to store locations, brands have had to adapt the digital shopping experience to be as close to in-person as possible. It did not take long for retailers to realize the potential of AR to achieve this.
With augmented reality, customers could do everything from visualize a new piece of furniture in their existing space to try on jewelry via their phone's camera. What followed was a surge of interest in both AR and virtual reality. The market for both is expected to thrive in tandem with e-commerce, reaching $252.16 billion by 2028 with a compound annual growth rate of 36.9%.
It's not just technology and shopping behaviors that have changed, either. Consumer attitudes also underwent a significant pivot as people adjusted their priorities during the pandemic. And not just due to COVID, either.
The past several years have been challenging for far more reasons than coronavirus. We've witnessed an increasingly unstable and unpredictable geopolitical landscape.
This has only further disrupted supply chains that were already weakened by multiple years of pandemic safety measures. Factor in the ever-present, growing threat of climate change and economic unrest that has left 75% of people concerned about their finances, and it is unsurprising that people are now less cavalier about how and where they spend their money. There are several considerations at play:
In other words, people are more considerate about both what they purchase and from whom they purchase it. Even as they seek to save money and limit themselves to essentials, they're willing to spend more for sustainable goods and services. And brands that can offer a superior customer experience regardless of how and where their customers shop will inevitably come out on top.
In the wake of COVID-19, the face of retail has been forever changed. The emergence of social commerce alongside new technology, such as augmented reality, has completely disrupted the relationship between retailers and consumers.
With the recent shift in consumer attitudes and behaviors, this disruption is a good thing — businesses must embrace it in order to move forward. And now, more than ever, companies need to have the right technology in place to enable and accelerate sales in the age of experiences.
Are you looking to transform the way you showcase products in your e-commerce store through interactive shopping experiences? Book your Tangiblee demo today to learn more.