A balancing act in e-commerce


By JOY LEE

"One way to manage current consumer demands is by onboarding small players and SMEs, and at the same time empowering them enough both technologically and financially to manage such behavioral change." --- Mritunjay Kumar

AS the shopping experience increasingly moves online, retailers have had to adapt not only to the shift towards digital shopping channels but also to the change in consumer behaviour online.

Notably, consumers have become more discerning these days. With greater access to information and with a wider variety of choices on the Internet, they have become more particular about the products and services that they purchase.

The pandemic has certainly paved the way for savvier digital consumers, but the overnight shift to digital channels has had a drastic impact on consumer behaviour and has created a more complex customer base for businesses.

Pre-pandemic casual online shoppers have increased their research and purchases online by leaps and bounds while older consumers are going online for the first time.

This, says research firm Euromonitor International, will mean that companies will find themselves in a digital balancing act as they serve these two extremes of the customer base.

“Consumer bases for companies now include those more sophisticated tech users as well as the more recent converts of the older generation, who will require more support from companies, ” says its senior head of digital consumer Michelle Evans in a recent webinar on Top Digital Consumer Trends in 2021.

Over the past decade, digitally savvy consumers have become accustomed to using a variety of devices to interact with brands. This increased connectivity enables consumers to enjoy higher levels of convenience, simplicity and knowledge.

“As a result, consumers became more impatient, demanding and better informed, altering how they expect to interact with companies. This will require consumer-facing businesses to invest in technology to serve these individualised needs, ” she adds.

Companies will also need to ensure that they have the capability to connect the dots across databases to have a holistic view of the consumer.

Customisation, notes InsightzClub co-founder and chief executive officer Mritunjay Kumar, has become a very critical element for some of the retail categories in current times. It helps consumers to connect better with brands, thereby increasing brand loyalty.

“We have seen a huge spike and change of trends recently – as much as 12%-18% of consumers now prefer to buy products and categories which offer customisation. It’s mainly seen in some key categories such as apparel, furniture, beauty care and home renovation.

“We have also seen that teens and young adults from ages 18-45 are leading this trend and are looking for more specific and personalised products when it comes to any purchase, ” he shares.

Mritunjay also observes that categories such as apparel and furniture have shown higher degrees of changes and upward improvisation when it comes to customisation.

“This shows that key brands across several categories have already started looking into such trends and are implementing the necessary changes in distribution channels and logistics to manage customer demands and brand loyalty, ” he adds.

Understandably, it is a challenge for retailers to manage and cater to such demands in a short time. Additionally, the current distribution channel and logistics may not be fully equipped to support such demands for customisation.

But Mritunjay notes that there is also a shift in current distribution channels where big brands have started to work with local partners to offer and manage their customers’ demands.

“I think one way to manage current consumer demands is by onboarding small players and SMEs, and at the same time empowering them enough both technologically and financially to manage such behavioral change and also to ensure that there is no increase in prices.

“I do see that big companies and the government will play a big role to strengthen SMEs by offering relevant support for them to grow with no significant increase in selling costs, ” he opines.

According to Euromonitor, one of the key drivers of this commerce customisation trend is the availability of technologies that are being leveraged by retailers to support such efforts.

Technologies such as cloud and artificial intelligence have enabled companies to adapt to the ever changing consumer preferences and more and more companies are looking to invest in these technologies over the next five years.

New business models such as direct-to-consumer approaches, marketplace platforms and the resurgence of subscription services with a digital twist have also turned the retail industry on its head.

As such, the research firm notes that retailers will need to explore alternative ways of doing business in 2021 and beyond to continue reaching out to consumers amidst a growing trend of “choosing your own commerce adventure”.

Mritunjay notes that the current circumstances make it rather difficult for retailers to pivot.

“One of the big challenges for businesses is the shortage of relevant skills due to a huge spike in demand for such talents.

“There is also a challenge in having enough local partners or SMEs to help with the distribution channels.

“We have to consciously invest in training and in relevant equipment to help people move forward. In adaptation of the new normal, we need to offer training to people and also provide relevant financial support or equipment to SMEs.

“Brand owners have to work closely with their channel partners and these SMEs to manage the steep change in consumer behavior and demands, ” he says.

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