The Future of E-Commerce – Retailers or Brands?

Technologically, I am seeing a big thing going to take place…social commerce!

Social media and online shopping had seemed to become great partners revolutionizing e-commerce to the next level. It can’t go wrong by looking at the time spent to express and share sentiments among online users are becoming phenomenal! I see big decisions are being made through social media. But of course, if your web presence is not meeting the required criteria that need to build trust, then the results are going to be still something truly unexpected. So, for now, I see the payment gateways are pretty much as save as it looks!

The bigger question is who will eventually dominate the kingdoms of “e-commerce” over the next 10 years? Retailers or Brands?

Innovations will never stop, as we can see giants such as Amazon, E-Bay, Alibaba or even Lazada for that matter are constantly working on the user experience, but I truly feel that the elements of ‘branding’ and the emotional connection between customers and brands will still be the winning factor in this digital game! Branding is basically everything that is got to do with what your business does namely the product design, packaging, CRMs, websites, social media tools and the advertisements that ensure proper trust is gained among the customers. Remember, people often purchase products based on the brands that they are emotionally connected with!

Retailers are also slowly converting themselves into e-commerce these days. The rise of big data is dominating most of the buying decisions these days. I see online retailers are not just emphasizing their brand, but they also seem to be highlighting the products and brands sold in their online catalogues. What I see in the future is, will I buy a Canon camera through Lazada or Canon’s e-commerce store? I don’t see any reasons why Canon should sell their products elsewhere when the whole world shops online, don’t you think so? And guess what? Apple has started practicing this!

The basic barrier that the market is facing currently is that traditional models need physical outlets to demonstrate or ‘test’ their products. The human-touch-and-feel process is still needed by the customers. When the marketplaces provide the access to customers, and the day Brands surpasses the border of ‘product test’ sessions, you will then experience the rise of Brand in the e-commerce market. Of course, the number of products in a Brand matters more too!

On the other hand, brands should be aware of marketplaces triggering price wars between them, of which the knock-on effect is damaging to the brand. If the price competition continues, the perceived value of the product will be the market price.

So can retailers ensure their game is not an end? What should be the focus now? Well, this is coming and there are high potentials for brands to restrict their product supplies and reaping the margins! So, it is essential for Retailers to put more efforts to be in the loop by investing in building loyal customers in a particular niche. This will ensure them to still provide access to customers for brands while making the margin. If retailers are competing with brands on 3rd party marketplaces, they can simply cut supply. Keeping stocks longer than normal routines with higher upfront cost can be pretty risky too. That’s my viewpoint.

Besides that, the trends are changing rapidly too. Many online companies tend to get onto social media to create huge awareness but fail to understand that realistically email marketing is what eventually will drive the actual sales in. It is important to have a website that allows subscriptions that grow your contact list. Your content must as well be very engaging and persuasive. That’s the trade secret guys!

Personalization will continue to be big in coming years, as consumers desire more authentic and personal relationships with the brands they buy from. This is where Brands might take a lead if Retailers don’t practice it. Some Retailers today only perform sales, but the warranty service goes back to the Brand. Now, this gives all the reasons for the Brands to build customer satisfaction and grab them in their list when Brands go on their own. Customers don’t want to feel like things are merely being sold to them instead they want to feel like they are finding and being presented with solutions that address their own personal pain points and problems.

As an e-commerce business, you have to create the perception that you’re selling to each individual person, while still leveraging tools and automation that allows you to scale your operations as your business grows. We can see more brands will start to invest more when it is time to develop their own platform, reducing margins with aiming higher volume.

Did you know? More than 62% of smartphone users have purchased products online using their mobile device in the last six months which explains e-commerce branding strategy must include a functional and well-designed mobile platform. Yes, we, consumers are changing to mobiles, and regardless of retailers or brands, they have no choice but to accept this paradigm shift!

This, therefore, leads to the most important matter which is the “content” of how the products and brands are sold on these platforms. I would say in the future, the winning factors will be also on how we utilize product demonstrations through YouTube, Facebook and even Instagram Stories for all these will be powerful tools to take charge of the dominance of customers’ interest. Not forgetting the rise of Influencers and Bloggers today, Vloggers too of course! The more engaging the contents are, the more comfortable customers get. The critical the reviews and testimonies are, the more trust will be gained towards these platforms.

In basic, the rules remain the same, that to serve what the customers want, not what you have!

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About the author

prasath kangaras

Prasath is a bundle of electric energy filled with passion for the advertising industry. He believes that he is a “slave to great ideas”, highly known for his expertise in branding. Known as PK to many of his peers, he has more than 10 years’ experience which he effervescently shares his insights and creative ideas to add more value that benefits his clients and participants.

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