People Had Become Comfortable With Online Shopping
It was hard to miss press articles picturing retail meltdown in America this year. Retail Apocalypse is happening now.
Life’s quality improvement.
Amazon’s long term online business strategy paid off, it became a standard and 55% of american shoppers search any kind of product on Amazon. Amazon’s customer experience is great, online shoppers have a large choice of products, benefit from competitive prices and same day delivery in more and more areas. Most of my friends living out of the cities subscribed to Amazon Prime. Online shopping easily replaced an old habit of driving to a mall to do shopping. Amazon Prime’s free shipping significantly improved our life’s quality and online shopping became a part of our lives.
The shift.
This shift reminded me the one we experienced during our mobile adoption cycle. Originally, Apple used skeuomorphism in iOS to guide its users through the new ways of consuming their mobile devices. But five years later, Jony Ive considered that people have become so familiar with their devices and the software that the next logical step was to get rid of the reference to the physical world.
It seems like we’re experiencing this logical step in the online shopping now. People had become comfortable with online shopping, they don’t need physical stores to buy the product, they understood the benefits of the great customer experience they can get online. Similarly to the iPhone adoption, with its touch screen experience and an easy access to a multitude of apps, Amazon convinced customers that they can get an excellent shopping experience and an access to a multitude of products through its online service.
Consequences.
Amazon changed our shopping behaviour and online presence became a prerequisite for retailers and brands. This change in customer behaviour affected thousands of physical stores. In America, more than 6300 stores are shutting down. According to a report from Credit Suisse, between 20% and 25% of American malls will close within five years. In France, the big malls suffer as well.
Customer experience is the key.
Retailers try to reinvent themselves and grasp their market share in the online space, but the rules are not the same. If in the physical world, location was a key to success, in the online world customer experience is the key. Amazon’s customer experience, that seduced us to shop online, set the standard very high. Online shoppers expect same day delivery, price competitiveness, seamless omnichannel integration and great customer service.
Thanks to its enhanced customer experience, Amazon proved that online shopping is a great way to shop. Today, Amazon accounts for 43% of US online retail sales and the number of online shoppers has grown by nearly 20 million from 2015 to 2016. But e-commerce represents roughly 8% of the total retail sales worldwide, so physical stores still have a chance to attract customer attention back to physical stores if they deliver compelling customer experience, provide an integrated omnichannel experience, improve product selection and optimize logistics.
