What are the limitations of E-Commerce?

In the digital world, a popular discussion has been centred around the question of whether “COVID has pulled 5-10 years of eCommerce growth forward”. This is the topic of one of Philipp Kloeckner’s recent Tweets.

Our CEO, Remco Livain, shares his two cents on what the limitations are of e-commerce compared to offline, and why it has started to plateau. He observes whether user behaviour is driven by tech, infrastructure or societal norms. Throughout this reflection he finds that e-commerce sales, as a percentage of total retail volume, has slowed down considerably, and that this is not necessarily a bad thing!

Evidently, the pandemic accelerated online sales significantly over the last few years. As we near the end of this crisis, according to the US Census Bureau, sales from online retail have started to go down. The general trend towards online retail still exists. Growth has slowed down, but it seems as though it has normalised more than ceased.

There are obvious reasons for a decline in growth. Stores are open again: we all want to venture outside, and enjoy our lives somewhere other than the confines of our homes. No wonder brick and mortar retail has bounced back quickly in the last few quarters.

However, there are other explanations to this:

1. Logistical?infrastructure?still needs to improve, significantly.
2. Many traditional retailers do not know how online sales will be a part of their?(omni-channel) long-term strategy; what the role of brick and mortar stores will be.
3. Supply is not where it could be and most retailer and brands?stock their stores first, before serving their online store's needs
4. Online marketing has become increasingly competitive and expensive; brands—and retailer—do not have the?organisational setup?and partner network to address their technical and online marketing needs, efficiently.

The trend towards online retail continues, even if its growth has slowed down. Remco believes the mid-term trend will be a more cohesive mix between online and offline sales.

As an online marketer, I am actually glad that digital sales growth has slowed down —?infrastructure continues to be an issue and traditional retailer need time to determine how online is a part of their long-term strategy

With exponential growth come exponential challenges. It is okay to take a step back and evaluate how digital can and should be a part of the long-term vision for retailer and brands alike. As infrastructure and organisational setups improve, so will the willingness of customers to purchase online.

Feel free to subscribe to his blog for regular marketing insights and updates straight to your inbox, by clicking on the following link:?https://www.livain.com