There is a dramatic change in the way consumers shop in online stores. Customers use their smartphone to browse and shortlist products based on the reviews, compare prices; share it with friends for an opinion and visit a retailer once the purchase decision. They try out the product in the store nearby and place an order comparing online and offline prices. The products are either picked from the store nearby or get delivered on the same day.
Online stores in every pocket!
Big changes are inevitable and that retailers must act now to win big in the long term. Local stores gave way to department stores, then to malls and now to their online partners. US smartphone penetration is expected to reach 60 percent in the next three years from the current 40%. Digital commerce is expected to explode and bring online store shopping literally at fingertips of customers.
Online stores fronts: Adapting to the changing trend
- Personalized Marketing: As consumers are changing the way they spend time, marketers are bound to follow. Ads are shifting toward not just digitization but also personalization, powered by increasingly sophisticated algorithms and predictive models that analyze transaction data and digital media trends. Personalized marketing – messages and actions tailored to the visitor based on their previous viewing & purchasing behavior- is the key to all of this.
- Last Mile deliveries: The majority of e-shoppers’ purchasing experience is directly linked to the quality of the delivery service that the seller provides them. Considering that waiting time while an order is being shipped is kind of stressful for customers, the last mile delivery experience appears to be a key step in online customer’s satisfaction. 55% of them declare they won’t reorder from an online store if they had troubles with their parcel delivery.
- Exploring new business models: One of the most important things is to think about, how you want to handle inventory management and sourcing products. Some people like the idea of making their own products and others hate the idea of their garage full of boxes. Drop shipping is gaining a lot of attention because it is one of the low investment models. Some prefer private labeling and manufacturing. It is important to choose what fits your business and is profitable.
Strategies for Online stores to adapt to changing markets
These changing trends will put considerable strain on the traditional retailers’ economic model, with challenges to both the top and bottom lines. Retailers will need to keep prices low to stay competitive which can bring a significant decrease in the gross margins. To increase revenues, gain share, remain profitable, and manage capital investment effectively, retailers must take aggressive action.
Omnichannel strategy: Almost all retailers are investing in multichannel capabilities, as they should. As pressure mounts on traditional sell-through revenue, incumbent retailers too must find new profit pools like having an online storefront. Retailers have enough initiatives in place to discover, test, and expand future revenue sources beyond physical shelf space. Retailers should also exploit assets beyond products. For instance, Sears and Wal-Mart Stores are earning “rent” on their digital assets by establishing third-party marketplaces similar to Amazon.
Use of Data Analytics and Business Intelligence: Forward-thinking retailers are leveraging the vast amounts of data they possess to enable targeted marketing, tailored assortments, and effective pricing and promotions. Gathering and analyzing data to understand the needs, preferences, and attitudes of growing consumer segments will be especially important. Kato is a business tool that provides business intelligence solution to enterprises.
Offerings and Product Categories: Online stores will have to give consumers a reason to choose their stores over competitors. Consumers will seek for retailers who will provide value in new ways and hence retailers will have to offer deep expertise. Winning retailers will proactively shape products and experiences for and with consumers by bringing them directly into key merchandising decisions. Hence having a good product sourcing strategy will create a huge relieve in your efforts of building a successful online store business.
The retail environment is dynamic. Competition is intensifying and shifting to new arenas, and consumers are rapidly evolving their approach to purchase decisions. The time to act is now.