Since the Covid-19 pandemic emerged, ecommerce has grown at an unprecedented rate, a trend that is likely to continue even after the outbreak has subsided.
Ecommerce has been redefining the path to purchase for customers, establishing new customer experiences, altering business models, and generating development prospects for both large and small merchants, as well as a new generation of pure ecommerce players.
“The pandemic was a massive accelerator for industry growth in 2020, speeding up changes across several verticals, and that transformation is expected to continue as we look at 2021 and beyond,” said Nicolas Bruylants, cofounder, and CVO of CNNB Solutions, a $10-million ecommerce company that supports Middle East and North Africa (MENA) retail brands in their digital transformation.
Digital experience platform Sitecore conducted a post-pandemic survey of MENA shoppers that revealed 89 percent of customers in the UAE and 91 percent of customers in MENA have become digital converts and intend to continue buying online.
This is further confirmed by an E&Y study of UAE and Saudi shoppers, where 92 percent of respondents indicated a substantial change in their shopping habits.
Nearly three-quarters stated they were more optimistic about online shopping since the onset of the pandemic.
Globally, 77 percent of people intend to continue or increase online shopping behavior and habits that they adopted during the pandemic.
‘The future is bright’
“The future of digital shopping is bright,” Bruylants told TRENDS, citing the following factors as contributing to the region’s ecommerce growth:
- Mobile penetration and mobile internet speed
- Social media
- The cost of technology
- Retail brand website developments
- Payment methods like Apple Pay, Mada Card (KSA), and buy now pay later
- Warehouse and delivery infrastructure
- User experience (not just on the platforms but during delivery and after-sales services as well), and
- Trust
Taimour Mahmoud, an ecommerce expert, concurred, adding that user confidence, interaction, and expertise in this sector improved, resulting in its expansion.
According to Mahmoud, numerous reasons have begun to persuade the buyer to make an online purchase. These include the exchange process and the item’s rapid delivery.
Large retailers also play a critical role in simplifying this process and satisfying today’s buyers.
He explained: “Bank card sales are also increasing significantly. Banks are crucial in this area because they educate clients about using their services, whether online or offline. Even merchants have begun to accept credit cards instead of cash payments. So, I believe, is the primary cause for ecommerce’s growth.”
Consumer engagement
As ecommerce expands, firms are becoming more aware of the region’s shifting consumer behavior and needs.
However, as companies compete for market share, optimize revenue, and keep ahead of ever-changing ecommerce difficulties, providing a great product is no longer enough to ensure survival.
“Customers want a nice user experience as well as convenience; when you provide that, you get extremely rapid adoption,” said Bruylants.
He continued, saying: “Retailers in the region are becoming more aware of the necessity to create ‘brand.com’ sites to form relationships with their customers. Nevertheless, more work remains to be done because most brands are owned by huge organizations that frequently own their multi-brand online store.”
Mahmoud also said shops should alter their thinking in response to consumer demand, which involves a series of steps, including greater promotions.
Such an approach and innovative techniques can encourage customers to shop online and interact with retailers more, thereby expanding the sector.
Challenges in this sector in GCC
Bruylants argued that while the ecommerce sector is fast increasing and great progress is being made in several sectors, the region still faces major challenges.
The most important reason is that some countries’ rules and regulations regarding goods imports can be time-consuming and difficult to manage.
Furthermore, customs taxes and delays associated with cross-border shipments are still frequent and must be resolved, and the total delivery expenses are quite high in total, particularly for delivery to remote locations.
Mahmoud said consumers in the GCC region, particularly Saudi Arabia, continue to buy from online platforms outside the country.
As a result, legislation should be changed to attract these platforms to the Saudi Arabian market and allow them to build branches within the country.
Furthermore, minor market players should be provided more assistance by making their work easier.
Ecommerce vs physical stores
While online shopping is widespread and the numbers steadily increase over time, this does not mean that physical stores like shopping malls, groceries, and convenience stores are becoming obsolete. On the contrary, both mediums are still thriving.
Many stores exist as both physical and online stores. Take for instance stores like Forever 21 and Zara.
Each of these stores can be visited and shopped at via their online websites, or you can visit the nearest premise and stroll around the actual store.
According to Bruylants, ecommerce is taking a more selective approach. Most consumers are looking for something they would like to buy before signing up for a website or downloading an app; it is less an impulsive buy like you can have in traditional retail.
On the other hand, ecommerce lets people purchase goods from many more retailers than traditional retail.
On the other hand, Mahmoud stated, while the thrill of shopping at a store is totally human, ecommerce is always a solution for individuals who are in a rush and don’t have much time to buy physically.
“In the meantime, the debate will rage on, but physical retailers will continue to dominate ecommerce,” he said.
Ecommerce trends in 2022
According to a McKinsey survey, businesses have accelerated the digitization of their customer interactions by three to four years, and this digital-first trend shows no indication of going away.
As brands strive to improve and elevate the online buying experience, they must also prepare for the upcoming Metaverse.
Furthermore, in 2022, one of the essential variables will be maintaining vs managing growth. Following a hectic 2021, many retailers are evaluating supply chains, new client acquisition, and marketplace methods to enhance revenue.
Additionally, in an increasingly competitive environment, intelligent customer involvement — on-site and across channels with outstanding service — and the use of technology to retain and expand customers will be necessary.
Bruylants expects that augmented reality (AR) and artificial intelligence (AI) will become more commonly used to improve consumer experience.
“We will also see an increase in the use of intelligent chatbots. Big data will also enable better personalization of on-site shopping. Subscription models will become more popular throughout the year, and brands will place a greater emphasis on strategies to improve sustainability,” he concluded.