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Sustainability to Social Commerce – a Reflection on E-Commerce Challenges

Sustainability to Social Commerce – a Reflection on E-Commerce Challenges

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Joe Farrell, VP of International Operations at PFS reflects on four key challenges faced by online brands last year and how they've impacted the e-commerce industry, and how online retailers can prepare for success in 2020.

Last year, retailers faced a number of challenges. From increased pressure to implement sustainable practices – to Brexit, and the continued evolution of the modern high street. It is safe to say developments in consumer buying behaviour, influenced by a range of economic, political and social factors have put increased pressure on the industry to survive.

Despite these challenges, the outlook isn’t entirely bleak. e-commerce sales continue to drive retail forward, with recent reports suggesting sectors such as Health & Beauty continued to grow. Whilst success is far from guaranteed for 2020, brands who take the time to reflect and learn from previous years will be best placed for future growth.

Here we reflect on four key challenges faced by online brands in 2019, how these have impacted the industry, and how online retailers can prepare for success this year.

1. Brexit fears piled on the pressure

In 2019, ongoing political uncertainty surrounding Brexit and fears of a no-deal departure from the EU had a serious impact on the retail industry. Due to economic uncertainty, retailers saw prices dip for the sixth month in a row during November, putting even more of a squeeze on brands to tighten up processes and boost operational efficiency. Delays to Brexit added further pressure, particularly ahead of peak season trading which prompted many online retailers to stockpile goods in preparation for stricter border controls. This increased pressure on retailers who would have already been experiencing full and busy warehouses ahead of Christmas.

In order to prepare for potential supply chain disruptions, without the need for permanent investment, temporary distribution solutions will become an increasingly essential tool for online brands. Implementing a flexible approach to online order fulfilment will ensure consumer demand is met while helping brands remain profitable amongst further economic uncertainty.  

2. Shoppers turned to social 

Last year the interaction between brands and shoppers evolved, prompting a number of online brands to utilise social platforms to reach customers. Earlier in the year, Instagram unveiled a new feature that makes it possible for the consumer to shop without leaving the app – making it easier and more convenient for users to buy products.

Whilst this movement eases the initial buying process, the real challenge for retailers has been ensuring that the fulfilments live up to the speed and convenience in which they are bought. How quickly the item is delivered, how easy it is to return, and the level of customer service along the way can make a lasting impression on customers. For emerging brands, partnering with distribution providers is often a cost-efficient way of keeping up with the latest customer delivery expectations. With the number of social media users worldwide now at 3.5 billion and growing at a rate of 9% year-on-year, this is a platform brands simply cannot afford to ignore in 2020.

3. Consumer concern for the environment grew

Thanks to the increase of readily available information, consumers are more educated than ever before when it comes to the impact of the entire retail supply chain on the environment. This sense of urgency around preserving the environment will only continue to grow in 2020, putting increased pressure on retailers to ensure all fulfilment processes are as sustainable and efficient as possible. In 2019, H&M was just one example of a retailer that took action. Recognising that current packaging initiatives just weren’t enough, this online retailer pledged to ensure all packaging is reusable, recyclable or compostable by 2025.

To boost sustainability in 2020, online retailers must constantly re-evaluate the distribution chain. From sustainable packaging solutions such as air-tight flexible packaging that eliminates the need for an outer box – to distributed packaging models that eliminate a number of packaging steps in the supply chain. Opting for automated technology such as cloud-based order picking solutions can also help to boost distribution efficiency by increasing accuracy, and minimising waste.

4. Omnichannel services are an expectation, not a luxury

According to the Europe TOP500 Report 2019, fast free and convenient collection, delivery and returns are becoming the new standard for shoppers. In fact, findings from the report revealed that department stores offered more flexible delivery, collection and return promises in 2019, with 88% offering click and collect services and more than half (54%) enabling shoppers to name their delivery day.

Retailers that ensure they are meeting growing consumer expectations in 2020 and enabling them to buy in the way that is most convenient for them, will be the ones that cut through the noise and stand out in today’s highly saturated e-commerce market. Making sure that customers have the option to shop via a range of platforms including, in-store, online, on their phone or via an app and then being able to collect and return either in-store or through a channel that suits them is key to a retailer’s success.

To prepare for success in 2020, and stay ahead of future trends, online brands must follow an innovative approach from point of sale to delivery and beyond. Taking learnings from the challenges faced in 2019, and being able to adapt, will help retailers remain competitive in the current turbulent retail landscape.

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Joe Farrell

Joe Farrell

    As Vice President of International Operations, Joe manages PFS’ locations across the UK and Europe. Joe has been with PFS since its inception 20+ years ago and has served in various roles including Sales Manager, Pricing Manager and Director of Client Services.

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