Projections on the future of e-Commerce

What to expect once covid-19 is gone? If you remember our blog from last week, we talked about the virus and the impact on business. What can we expect for the next few years? How will the market react to what we’ve been through ? This blog will be a little different from the others as we are going to project ourselves into the future. Let’s have a little of fun while making projections. Only one thing is certain, only the future will tell us how it will go. If we had the hidden truth about the future, we would have had a career buying lottery tickets and not in third party logistics!

The stores

The first big topic of discussion. What will happen with the store in the mall? Honestly, this does not look well for them … although there are still many consumers who prefer going to physical stores, many have taken the habit of buying from the comfort of their home! The recovery will certainly not be easy and many will close by the end of the Covid. we should not be forgot that the costs to maintain an online business vs a physical business is not comparable! The businesses that survive Covid-19 will need to have an incredible personalized offer to stay alive. You will have to rely on a service and a customer experience that you cannot have on the web. Have great advice for the customer and making them feel very special will be an asset that should not be overlooked. Another point that will hurt the physical store is attractiveness of a place. For example, if before, in a certain location, there were around 5 stores of a very similar product, you would think that there is a lot of competition in this sector. Certainly, but it also creating a force of attraction for customers. A customer can see all the offers from each company in a short time, while if the store is alone and isolated, it will be hard to compare other suppliers of the same product in a physical place. So if 3 stores close and there are only 2 left, customers may not want to hit the road to see only 2 stores and they will look directly online instead.

The future of the online market

Are people going to stay on the web and abandon physical businesses? We believe it is. Many markets will have to adapt and start offering their products online if they want to survive. It should not be a surprise if people go to the closed door of a business and find a sign saying that the business is only online now. We believe that e-commerce will experience a phenomenal growth in the next 5 years. The e-com will literally explode! The real challenge will be to support the online market. Giants like Amazon will take up more and more space on the e-commerce scene. It may even seem worrisome that it is taking up so much space in the market, but remember that many companies sell directly on Amazon. So when Amazon makes a sale, chances are that it will help a local business. Post Covid, expect something never seen on the web. There are many companies that have been caught off guard because there was nothing established on the web for them yet. Let’s throw out some funny idea, dealerships completely on the web? Buying your future home via the web and virtual tours? Companies will just close their building and they will just focus on the online market. They will need a good marketing team and a good 3PL. There will be no more rent to pay and the only operating cost will be linked to the website. The company will no longer have to pay for unnecessary costs that are difficult to manage when there are no customers.

Rising popularity of dropship

As we have just mentioned, businesses will no longer have a physical place to trade. You should expect to hear about dropship more and more! This word will become very popular for entrepreneurs. Dropship? But what is Dropship? What is dropship for? Why would I want to do dropship in my company? First, dropship comes from the principle that the company does not have any inventory. Its supplier keeps the inventory. So when a consumer buys a product on the company’s website, the company forwards the request to their supplier and the supplier takes care of shipping the goods to the customer on behalf of the company. For the second question (what is the purpose of dropship), the company that uses dropship never needs to burden themselves with the costs of keeping goods always in stock. It will not be uncommon to see startups launch into dropship, because the cost to start a business is lower and payment for inventory is made when there is a sale. Finally (Why would I want dropship in my company). With covid-19 and the rise of online commerce, dropship will allow companies to close their businesses and no longer have a physical location, in other words, rent to pay. The supplier will probably have already hired a good 3PL and the company will take advantage of using the services of professionals instead of doing it themselves and giving a slower service. Finally, it will be easier, when doing business with a 3PL in another country, to avoid customs fees and logistics.

The local market

Should we be worried about the local market with the advent of e-commerce? Our answer … It depends! It depends on how the markets will adapt to demand! If the market intends to offer a product similar to what the online market can offer at an unaffordable price, you should not expect lines in front of its shops. It’s over, the customer won’t buy the same product for double the price. If the merchant wants to keep a high price, he will have to improve his offer, because the customer will always have access to validate the merchant’s price. Following the Covid, people are much more comfortable shopping online and it will be difficult to make sales based on the naivety of people who will not validate prices on the competitors’ websites. On the other hand, many local merchants decided during the pandemic to go and sell online. So it will be easier to encourage the local market via the web, if its offer is acceptable!

As you will have seen in this blog, we believe that e-commerce will grow considerably after 2020! Of course, these are just estimates and that’s not necessarily how it’s going to work out… but it’s still fun for us to extrapolate on e-commerce. Unfortunately, with the end of this 4th blog on online commerce, that’s all for now on this topic. We found this theme to be a good way to introduce the FLEX Logistics blog. There are good chances that we will be referring to these blogs quite often! In the next blog, we are going to make a small summary of the last 4 blogs and we will try to make links with each blog. We will also take the time to present the next topic with a brief introduction (as we did in the article “introduction to blog”. Thank you for reading our blogs and see you next week!

If you have any questions, comments or suggestions about an article, or would like to suggest article topics to us, please do not hesitate to contact us and we will be happy to discuss them together.

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Do you like our blogs? Do not hesitate to check this on out about Amazon: https://flexlogistique.com/e-commerce/an-analysis-of-amazons-model/#more-6556

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