"Although life is beginning to get back to normal, internet sales continue to rise"
E-commerce expert Cor Molenaar on the post-pandemic prospects for e-commerce
When the first lockdown started in March 2020, a great swathe of the Dutch workforce was told to work from home and many shops were forced to close their doors. People turned to the internet in droves, both for entertainment and for shopping. According to Statistics Netherlands, the number of online payments rose sharply when the coronavirus hit. The retail sector's internet turnover went up by 54.8 per cent, while businesses selling exclusively online saw trade increase by 45 per cent. Thuiswinkel.org's Corona Web Traffic Tracker and the Digital Commerce Department at the Amsterdam University of Applied Sciences have also reported that online consumer behaviour has changed since the pandemic hit. It seems that people are now used to shopping online. But will new habits persist when life goes back to normal? We asked Cor Molenaar, Endowed Professor of eMarketing and Distance Selling at Erasmus University, Rotterdam, how he sees e-commerce developing after the pandemic.
New online consumption patterns
"Since the pandemic started, we've changed our behaviour. We've had no choice: everyone who could work from home had to work from home, teaching all went online, and access to shops was limited. So we've been doing more and more of our shopping on the internet. And it's easy to get used to things like buying your groceries from the sofa, having meals delivered to your door, and getting your favourite non-food products inside twenty-four hours," says Cor Molenaar. People of all age groups have also come to see how convenient e-commerce is. You can get the things you want without the trouble of going from shop to shop, safe in the knowledge that anything that disappoints is easily returned. Packers and couriers take the drudgery of shopping off your hands, leaving you free to get on with other things.
Molenaar doesn't see the pandemic as the cause of changing consumer habits, but as the catalyst for an established trend. In the first half of 2020, for example, the number of internet purchases was 11 per cent up on the year before. "The internet and e-commerce continue to grow. In the past, people used to visit shops simply because they happened to be passing by. Nowadays, unique advantages – a busy street corner location, for example – don't count as much. They have been overtaken by the possibilities offered by the internet. New shopping behaviour is likely to affect the number of physical outlets on our high streets. So retail districts are going to have to redefine themselves in order to stay relevant."
Consumers are now centre stage
We're currently seeing a shift from a supply-led economy to a demand-led economy. In other words, the consumer is increasingly centre stage, not the supplier. And online sellers are ideally placed to cash in on that trend, by utilising the new technological and algorithmic possibilities afforded by artificial intelligence and machine learning, for example. Technology is making our online browsing and shopping experience increasingly straightforward and personalised, with machine learning enabling bespoke advice about matters such as sizing and product type, based on your purchasing history. Pinduoduo, one of the biggest online platforms in China, is a good example of the shift to demand-led retailing. Uniquely, Pinduoduo enables consumers to buy food products direct from producers and manufacturers. Groups of consumers can even get together and buy in bulk at lower prices. The Pinduoduo platform, which is aimed specifically at smartphone users, also makes use of gamification and social media integrations. Instead of expecting shoppers to scroll through endless product lists to find what they want, Pinduoduo uses machine learning to make suggestions based on consumers' needs and other available information.
Multilateral platforms such as Uber, Coolblue and Airbnb are also becoming increasingly led by consumer demand. "Airbnb is a sort of intermediary, a bridge between its website users and private accommodation providers. By answering a number of filtering questions, such as where you want to go and how much you're willing to spend, you can find your ideal holiday destination with just a few clicks." The approach taken by platforms like Pinduoduo and techniques used by Airbnb represent developments that will really take hold in the next ten years.
External influences
Notably, price often seems to be a less decisive in the choices made by online purchasers. Molenaar doesn't therefore envisage moves such as the introduction of clearance charges from 1 July 2021 having any significant impact on online shopping behaviour. "On the internet, people don't always go for the cheapest option. Companies such as Coolblue and Bol.com are generally on the expensive side. But consumers trust these companies and their service, and are therefore willing to pay a little more."
Opportunities for smaller businesses
Although Molenaar expects platforms to dominate the internet in the years to come, he sees opportunities for smaller enterprises to thrive as niche market players. "If I want new running shoes, I'll look for a shop that understands a runner's needs," says Molenaar. "Leverage the added value of your specialist skills and knowledge, instead of being just a conduit for the big brands. And customise your website to match the needs of your target audience. It has to be more than an online product brochure."
One thing is certain: we're at the start of an era in which internet shopping is increasingly the norm, making it vital to optimise the performance of your online operations. Visit sidn.nl/onlinesucces for more information about how start-ups and other enterprises can use .nl domain names to increase turnover.