Spotlight On: Retailers Going Digital-First this Holiday Season
We’re taking a closer look at why retailers in South Africa, and globally, are taking a digital-first approach this holiday season.
This time last year, we were in a strict lockdown due to the pandemic. For many, this meant that online shopping was the way to go if we wanted to buy gifts and enjoy Black Friday and Cyber Monday specials. We then discovered how easy and convenient online shopping is, so fast forward one year, and we are still doing it.
Retailers are noticing this too. How could they not? According to the latest quarterly Shopping Index from Salesforce, global digital revenue grew by 11% year-on-year (YoY) in Q3, a much higher increase than was seen in Q2 (3%). Even though more people are getting vaccinated and starting to physically visit stores, the future of retail will continue to be centred around the competition for consumer loyalty in an all-digital world.
However, the pandemic still poses a threat to the world, and we have seen how easy life can be impacted by things beyond our control as humans. With this in mind, retailers are doing what they can to build businesses that are more resilient, and better abled to avoid disruptions to consumers. This involves going digital-first. Let’s take a closer look at what’s driving this and how it impacts retailers and consumers.
More Privacy Online
Consumers are enjoying greater privacy online due to changing global legislation, but this has made it more challenging for retailers to reach and market to these consumers. Salesforce projects a 30% growth in e-commerce traffic from social referrals and personalised email marketing. If this means that we only get information about products that we will actually want, we are all for it.
An Increase in Responsible Credit
Due to increases in manufacturing and logistics costs, as well as inflation, consumers are seeing higher retail item prices, while many are still waiting for increases in salaries. Due to this, we are seeing an increase in “Buy Now, Pay Later” options, allowing shoppers to still purchase items they want, but pay them back responsibly.
Brick-and-Mortar Stores Aren’t Dead
Just because retailers are opting or should be going digital-first, it doesn’t mean that brick-and-mortar stores become redundant. Quite the opposite, in fact. Due to last year’s shipping delays, alongside the ones we currently face, consumers are expected to place fewer, but larger orders. Salesforce predicts that more than six in ten global online orders will be influenced by brick-and-mortar locations. This could either be by helping to place an order online or by fulfilling it via curbside collection options.
By going digital-first, retailers will help to build resilience into their business models and connect with their audiences through personalised customer experiences. Digitalisation is important when it comes to your logistics too! Find out more about how TSI can help with this.