Significant Shift Towards e-retailing, Is Brick-and-Mortar Model at Perpetual Risk?

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Significant Shift Towards e-retailing, Is Brick-and-Mortar Model at Perpetual Risk?

 Significant Shift Towards e-retailing, Is Brick-and-Mortar Model at Perpetual Risk?


  • E-retailing is booming during the COVID-19 crisis, with people following lockdowns and social distancing norms
  • Two accelerated growth waves of e-commerce expected, and retailers need to prepare to survive the challenges and revival on the other side
  • Start-ups in the e-retailing industry securing substantial funding, highlighting future of e-commerce
  • Brick-and-mortar players are reopening with safety guidelines; however, there are fears of sales returning to normal

“How our lives have been if there was no e-commerce during the lockdown phase?”- does this question often bang on your minds? E-commerce emerged as the saviour for shopping of our essential item needs during the COVID-19 crisis, owing to which Australia is witnessing an e-retailing boom.

Before the pandemic, Australians were not much into online shopping. However, the epidemic related lockdown has boosted online sales, as online being the easiest and safest option for shopping during the lockdown. The e-commerce industry has grown exponentially within a short period.

Retailers Need to Gear Up for Two E-Commerce Waves: KPMG

In a KPMG report of survival and revival of the retail industry, it highlighted that e-retailing has a significant role during the COVID-19 crisis and is changing consumer behaviour. The year 2020 was already being seen as the year of rapid growth in the Australian e-commerce sector.

However, due to the crisis, the industry got a push and is witnessing unprecedented growth. The sector is expected to see two waves of accelerated e-commerce growth. Different categories of e-commerce are expected to have a disparate impact of these waves and the scale, time, and duration between the two waves is likely to depend on how local and global intervention would manage the dual crisis comprising health and economy.

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The First Wave: E-retailing is currently experiencing its first wave, where people are buying items of healthcare, grocery, recreational items, home maintenance, and liquor through online retailers. The buyers are right now more conscious of expenditures. E-retailers of footwear and apparel are not impacted much from this wave.

All the people who are not able to do shopping from malls during the pandemic crisis, they are doing so from the e-commerce websites. The demand is so high that various companies are failing at delivery level due to inability to deliver such large volumes at people’s doorsteps.

To survive this phase, retailers need to upgrade their digital selling platforms and come up with innovative solutions quickly. Some of the ways the retailers are using are coming up with click and collect pop-ups, converting stores to dark stores, and increasing taking phone orders when there are some challenges with respect to their online platforms. Also, many have turned their store teams to local delivery teams to meet the demand.

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The Second Wave: Once people become comfortable with online shopping and ready to spend more, they would spend on things like apparel and footwear. There would still be people who would like to shop from brick-and-mortar shops, but online is anticipated to play a crucial role during the recovery phase.

A shift in consumerism is expected, as the world is going through a crisis, and all these experiences would affect people’s thinking about money and their lifestyle including shopping habits.

People are expected to give more value to family time, and things related to home improvements would be in demand. Moreover, a refocus on health and wellbeing is anticipated. The consumers would expect more of the related products at a value price point.

Preparing to Benefit From these Waves of Change

As per the KPMG findings, retailers must start preparing themselves for these growth waves with following ways:

  • Invest in building omni-channel experience and quickly boost their e-commerce capacity.
  • Assess the inventory pain points and increase product portfolio related to health and wellness, community, family time and home.
  • Re-invent around being more socially and environmentally aware and provide more value to the customer base.
  • Retailers must fast-track the digital transformation.

Due to the digital revolution in the pre-COVID 19 era, Australians have the tools to manage the crisis, and the retail sector can recover quickly and be in better condition. E-retailing is the lifeline for retailers, consumers, employees, and the survival and revival of the industry.

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Start-up Preezie Secures Funding of AUD 575,000 during E-commerce Boom

When it is perhaps the most challenging period to get early-stage capital, e-retailing start-up Preezie has secured AUD 575,000 in seed funding from a handful of angel investors.

The start-up company offers e-commerce retailers a tool to find out what customer is looking for in terms of price and preferences. Once the customer mentions this information, the tool directs customers to the products that meet their chosen criteria. Preezie’s tool provides an impression of personalised assistance to online sales and boost conversions.

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Cybercrime Cases Surge During E-retailing Boom Amid COVID-19

The global crisis is also bringing the worst out of cybercriminals, as more digital transactions are giving them more opportunity to do frauds. With more and more consumers increasingly using click-and-collect options during COVID-19 restrictions, the changing consumer patterns are resulting in a significant increase in attempted frauds.

The Australian Signals Directorate’s Australian Cyber Security Centre (ACSC), is working closely with telecommunications providers and IT companies, to mitigate and disrupt COVID-19 related cyber scams.

What’s in Store for the Brick-and-Mortar Model?

The pandemic crisis has reshaped the entire retail industry. All brick-and-mortar stores’ sales have been hit massively due to the COVID-19 related lockdown. However, with restrictions easing out, many retailers are reopening their physical stores, but it is not the same as they had closed.

Now, to ensure safety of customers and employees, all retailers have to follow strict government guidelines. The retailers have made new arrangements to follow social distancing, which means there would be a limited number of people in stores at a given time, and stores would remain open for a limited period. All in all, now brick-and-mortar shopping would be a different experience altogether, with staff wearing a mask and frequent sanitisation sessions in stores.

That said, during the lockdown, retailers experienced unprecedented growth of their online sales, as online majorly being the only available option for consumers.

Will the Boom Last in the Post-Pandemic World?

This prolonged crisis is changing consumer behaviour. Even though the Federal Government could flatten the curve and manage the pandemic better, the COVID-19 crisis is here to stay, and everyone is learning to live with new ways of maintaining social distancing and strict hygiene.

After the prolonged habit of shopping online during the crisis, consumer behaviour might shape accordingly. Moreover, encouraged by online sales boost, more and more retailers are spending additionally on their digital platform, which also means that the digital platform would evolve and offer better customer experiences.

Along with e-commerce booming, it is also a period of significant technological advancements and innovations, preparing us for better handling of future crisis with technology playing a critical role in all aspects of human lives. Going by these trends, e-commerce is expected to have a strong foothold in the post-pandemic world.

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