Online shopping has been a growing phenomenon since its inception in the last decade or so. Figures and statistics show that in 2013 total retail sales only slightly increased (2.2%) and GAFO (General Merchandise, Apparel, Furniture, and Other) sales decreased by 0.6%. This may be a result of various socio-economic aspects; changing trends, GDP, the state of the economy or the emergence of online shopping. Or it could simply be a combination of all these factors. This change in retail sales revenue is comparable to the raging war of e-books and paper books. The emergence of websites like EBay and Amazon have solidified and encouraged customers to have an alternative to the traditional in-store shopping experience. Free shipping and constant discounts are the major benefits of online shopping. The question of whether online shopping will eclipse traditional shopping does not present itself as rhetoric anymore but rather as a possibility.
The important aspect of online shopping’s success is to consider the reasons behind it. As mentioned previously, online shopping has gained momentum and popularity as a result of various socio-economic factors. The convenience of online shopping makes it incredibly easy for customers to compare prices, browse products and buy items 24/7. But to declare the retail sector as a dying industry is premature. ComScore published a report demonstrating that from the 8th of December to December 14th, online shopping totalled US$6.9 billion, an increase of more than 10% in a year.
The online shopping industry in Singapore has also reached epic proportions. In 2010 the e-commerce business reached SGD$1.1 billion. Market analysts predict that in 2015 it will reach SGD$4.4 billion. Surprisingly, 40% (approximately SGD$420) of Singaporeans shop online locally. According to a PayPal study Singaporeans online shoppers spent over SGD$40 million on their mobile devices in 2010. In sharp contrast, a survey conducted by Groupon in 2013 suggests that only 13% of shoppers actually prefer shopping online and that 61.2% said that they preferred shopping in-store. It is safe to say from these statistics that the “offline” retail sector will not perish anytime soon and that retail shops will benefit highly from an exposure to the online shopping world. Statistics show that while consumers do enjoy online shopping - the shopping experience using mobile technology have not yet convinced Singaporeans. Jasmine Kaur said, “I would check out products using an app if they didn’t crash constantly. I prefer just to window shop using my mobile and buy products using my computer.” Even though online shopping via smartphones hasn’t reached its full potential, more and more Singaporeans are using it. In 2013 people using their smartphones to shop online had increased by 7% from the previous year,
Mark Simon, Managing Director at Toluna said that although online shopping is a growing trend in the internet environment, smartphones and tablets are not the main source of e-commerce. Smith, CEO of Euclid elements said that retail shops closing down isn’t the projection of the industry’s failure, but rather a necessity that will reinforce the retail industry in the future. Smith says a better shopping experience can be summarised in four simple points:
- Product display
- Experience of trying and purchasing an item
- Quality of customer service
- The overall appearance of the store
While online retailers will continue its exposure on the web, “offline” retailers will be in the process of gathering information about how to effectively market their products online. While online retailers are already set up, “offline” retailers will have to invest time and money to engineer an effective online marketing and business platform. The truth is, like many other digital vs non-digital debates, online and “offline” shopping will certainly have to co-exist.. The best example of media co-existence is radio and podcasts/radio apps/internet radio. While the radio industry has also suffered financially, the introduction of “radio apps, internet radio and podcasts” has actually helped the sector develop. Whereas their audience was once confined to a local population, the advent of internet radio has revolutionised and expanded radio listeners to an international level.
While there is a huge market of consumers that go online to shop, it pales in comparison with the amount of people that spend time in supermarkets, shopping malls and stores. Online shopping actually creates an alternative channel to satisfy growing consumer needs as the e-commerce business continues to blossom.
So where does the answer lie for retailers? Retail analysts Kantar found that 70% of us like to touch a product before we buy it. Friendly customer service and tangible items are some of the initiatives online shopping cannot provide the customer. There is also the inherent and constant risk of being victim of credit card fraud or identity theft. Internet shopping will never be 100 % percent secure and that’s why some people don’t shop online.
Online shopping won’t necessarily eclipse the other and some argue it should not be viewed as a battle but rather as a partnership. It has the opportunity to create boost a business’s profile as well as help the economy of the country grow. While the retail sector has undergone turbulent times recently, people must remember it’s a transitional phase.
Stephane Marc Thamsse
*Stephane Marc Thomasse writes for iPrice.sg, a online coupon sites that provides the best and latest coupon codes and discount vouchers for online stores like Zalora, Zuji, Bebe to name a few. This coupon codes give added bonuses to shoppers in the form of discounts . iPrice also is available in Malaysia, Indonesia, Hong Kong, Thailand, Vietnam, Philippines and Vietnam.