E-commerce, a groundswell not to be missed
We won’t hide it, Quebec discovered e-commerce in 2015.
At O2 last year, most of our clients were already doing it, but those who weren’t yet doing it wanted to know more and asked us if they should do it, if it was worth it, if we thought it was a solid trend… hmmm, wait and see, let me think about it… YES!
Online VS offline sales
The question is no longer whether or not e-commerce is important in your marketing strategy, we’re long past that point. The real question now is how fast your online sales will exceed your offline sales. Well, okay, not everyone is there yet, but in retail, we often see offline sales decrease while online sales increase. As long as online growth exceeds offline decline, things are still going well…
We’ve also long since outgrown the niche market numbers. According to eMarketer, online sales will continue to grow at triple the rate of offline sales growth for the next 4 years. By 2019, online retail is projected to reach $3.5 trillion and account for 12.4% of total retail sales, which is still a good $9.5 billion a day, yes, A DAY¹!
When people tell “Yeah but we’re not the same, our industry won’t be affected…”. Yep, sure, talk to Polaroid, cab drivers or the hotel industry who were all saying the same thing a few years ago… Absolutely all sectors are affected.
Around the world in 2 minutes
Don’t think that this is just a local phenomenon in North America either. On the contrary, we are neither the first nor the last, far from it. Not surprisingly, China is already the biggest player, with 40% of e-commerce sales².
Since Alibaba went public last year, it has been vying for the title of World’s Biggest Retailer by Market Cap with $172 billion in sales, alongside American giants Walmart and Amazon³…
And it’s not just Alibaba: today you need to know and look closely at what’s going on with JD.com. In 2015, it is the biggest online retailer for B2C. They saw their online sales increase by 78% in 2015⁴. And let’s note in passing that 61% of their sales last quarter came from mobile. Their warehouses have grown to… 4 million square feet.
If players like Facebook, Pinterest and Twitter have adopted the Buy button, it’s not just to follow a fad, we agree.
According to other even more optimistic sources, of all online retail sales, already 22% of transactions are done online, and it’s expected to reach 28% by 2019⁵.
Consider that 90% of goods sent to consumers weigh less than 5 pounds, so this is easily transportable by drone. Materner plans to cut distribution costs by sending its drones for a ridiculously low cost: $1.61/delivery. To your door. Of course, drones don’t have drivers, and they don’t have to deal with traffic jams (yet)⁶.
Jack Ma, founder of Alibaba, says that “In some countries, e-commerce is a way of shopping. In China it is a way of life”⁷ and by the way, less than half of Chinese consumers have internet… Watch out!
Beyond the increasingly impressive figures surrounding online commerce, what we need to remember most about this paradigm shift is:
- We now speak of multichannel, or better yet with last year’s buzzword: omnichannel. It’s about integrating online and offline sales into a single conversion tunnel encompassing all platforms. We can no longer think in terms of online, mobile, or in-store commerce, but we must think globally. Why? Because that’s how the consumer thinks (and buys) now. In fact, even Amazon, the online retail giant, has opened its first bookstore.
- We should no longer think only in terms of transactions, but in terms of relationships. We should now think about marketing before the sale, during the sale, and after the sale, and integrate technologies that will unify these 3 processes.
- For the consumer, it’s a single buying experience. For brands, the notion of experience at all points of contact is therefore crucial. Harmonization has become the challenge of retail. The online experience must resemble the in-store experience, and the mobile must be thought of as a way to get information before entering a store, but also as a way for the consumer to compare with the competition while in the store, and finally as a way to follow him and build loyalty.
At O2, we love e-commerce. That’s why we recently organized the first event dedicated to e-commerce in Quebec City; CHECKOUT, an e-commerce meeting.
¹eMarketer Worldwide Retail Ecommerce: The eMarketer Forecast for 2015, July 2015. Figure included products or services ordered using the internet via any device, regardless of the method of payment of fulfillments; excludes travel and event tickets.
²B2C and C2C combined: Forrester Research Online Retail Forecast & eMarketer Sept 2015 China eCommerce 2015 market update
³ WSJ Blog
⁵ Statista.com-Q2 2015
