Although it is home to only 5% of the world’s population, the triangular continent of North America boasts of several economically developed regions with elevated living standards, high food and energy consumption, and large trade and commerce. Many analysts believe that the boom of eCommerce in the North American market resulted from the increasing number of Internet-savvy shoppers in the ’90s and the world’s largest base of technical experts.
Today, an average North American e-shopper spends around $3,500 a year online. Retailers all around the continent are beefing up their delivery muscle to fulfill orders with the help of digitally-focused distribution centers and last-mile in-car, in-garage, and in-house deliveries. The regional market alone is expected to surpass $1 trillion by 2022, with fashion becoming a major shopping segment.
With such a large user base, highly circuitous cross-border supply chains, and top distribution hubs, this home to several eCommerce behemoths requires laser sharp focus to satiate the ever-increasing line-up of digital consumers. In the past year, many significant trends have emerged as significant game-changers for the North American eCommerce market. We talk about the 5 major ones:
1. Role of stores is nowhere near diminished in eCommerce
The line between online and offline shopping may have blurred blindingly, but physical examinations, proximal personalization, and store shopping experiences are a long way from being ruled out completely. Stores and malls are going through an urban makeover as digital continues to reshape brick and mortar for superior interactions, convenience, and experiences. To overcome the intermittent retail eclipse, stores are employing touchless solutions, conversational interfaces, mobile point of sales (PoS), and footfall analyzers to good use. They are leveraging assets and fulfillment centers to provide omnichannel convenience and flourish online, especially for groceries. Many retailers like Amazon Go are exploring new forms of phygital including Buy Online and Pick In Store (BOPIS), curbside deliveries, Radio Frequency Identification (RFID) beacons and IoT sensors, facial recognition, automated vending machines and self-service kiosks in malls, and several other models.
2. Transformation of catalog
Online advertising and cataloging are the new dot com bubble. Not too long ago merchants increased their online sales by selling to T.V.-watching consumers who dialed toll-free numbers to place orders to tele-shop. It witnessed a steady decline in sales when the omnipresence of the internet took over. The new norm of cataloging is specially developed to attract and cater to a digital-savvy, fast-scrolling, ‘always online’ customer. It uses webpages as display catalogs that create the same effect on customers but via a different channel. Instead of single-point detailing, retailers are now moving towards multichannel integration with a unique matrix of objectives and key results (OKRs). This way, the online catalogs can act as an additional sales channel that is search engine friendly, mimics in-store shopping with a cart, and is open to acute variations in language, data, media, besides being always at your disposal.
3. Enough room for small and mid-tier retailers
Many small and mid-sized retailers are also doing very well online as they’ve carved a respectable online niche for themselves. Cracks seem to be appearing in the once impenetrable armor of retail conglomerates as both upscale and bargain stores steadily boost their internet presence. With easy access to dashboards, analytics, and programmable queries, such businesses are looking for a more consistent demonstration of dollar value over time. With steady return on ad spend (ROAS), cost per acquisition (CPÅ), and click-through rate (CTR), a healthy demonstration of key performance indicators are evident. It is also expected that by 2024, Tier 1 retailers in North America will reduce inventory costs by 30% and improve the free cash flow for digital investment.
4. The sweet spot of conversion rates
When it comes to market intelligence, eCommerce conversion rates are considered one of the most trusted ones. But while these numbers never lie, deriving them is often confusing as it includes several variables. Hence, it is evident that conversion rate medians are different for different categories of retailers. Reaching overwhelmed consumers through traditional, interruption-based, pay-per-click/view campaigns is becoming harder and more expensive. Companies seeking to assess their performance are comparing multiple versions of conversion rates to derive actionable insight. The aim is to identify high-traffic areas in the store, overlooked products, dwell time, and even the product movement from the rack to the fitting room. Brands are leveraging omnichannel analytics with dynamic creative optimization (DCO), customer satisfaction (CSAT) measurement, etc. to recognize opportunities, upsell products, and monetize the funnel of customer activity with maximum efficiency.
5. Self-sustenance of digitally native brands
Marketplaces like Amazon have transmuted their role in the eCommerce landscape. Brands are increasingly migrating towards web sales owing to different reasons. The two most prominent among them are the chances of higher profitability and better brand-customer interaction. Web sales are more profitable for brands compared to “walled” marketplace sales since the pricing is set at retail and not wholesale. There is also a chance to establish a direct connection between the brand and the customer – an aspect purposely restricted by Amazon. Counterfeits with American Apparel & Footwear Association (AAFA), an association that represents over 1,000 brands, have also been instrumental in this new development. As a result, retailers like Nike are trying to draw shoppers to their own websites to generate revenue and brand loyalty, often via aggressive social media marketing. Last year, 1 out of 3 consumers preferred buying from the brand’s website over other mediums.
Future of eCommerce in the New World
With advanced customer journeys and 2020’s push to direct-to-consumer (DTC) offerings in specific segments, eCommerce is transforming, and success will depend on how quickly businesses can read the signs of change. Soon mid- and small- retailers will shift to DTC models leveraging store assets, online catalogs, omnichannel presence, and trustful conversion rates to increase revenue run-rates. Enterprises that can invest time and resources in pivoting their businesses toward the behavioral changes can capture the market and emerge as leaders in the new world.