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The digital revolution comes to retail: Will E-commerce change the industry?

[Unsplash, Nathan Dumlao]

Roar writer Scarlett Yu on how technology could revolutionise the retail industry and how it may already be happening in China

In this rapidly changing world, there has been universal acknowledgement that society is constantly developing, adapting, and reinventing itself. Indeed, it is through consistent transitions that people gain a better quality of life. Societies are always driven and shaped by forces of human desire and interest. Consequently, as society evolves, it is inevitable that various social trends and establishments that have existed for centuries, if not longer, will slowly be left behind. One prominent example would be the retail business.

When capitalism began to emerge in 17th century Europe, it was largely operated in foreign trade activities held by a group of merchants. Capitalism eventually penetrated every aspect of society, making it a cornerstone of western civilisation. The market ideology was pushed even more by infrastructure such as the rising influence of big cities and construction of railroads, which led to the advent of modern department stores. This phenomenon of retail-centred business cemented its place in society around the mid-19th century. Furthermore, when the automobile revolutionised transport and led people to migrate to suburbs in the mid-20th century, retail became rapidly interspersed among a network of shopping malls.

The landscape of retail has endured through waves of socioeconomic shifts in the last two centuries and it’s astonishing to see how it still flourishes. It is fairly important to note that the previous changes that radically retail did not mean an end to the business as a whole; in fact, every moment of transformation “reshapes the landscape and redefines consumer expectations”, often beyond recognition.

This is the point where digital retailing known as e-commerce comes in. E-commerce is set to provoke another revolutionary change in conventional retail practices and thus become the dominant mode of future shopping. As technology develops at an unprecedented rate, it has transformed the way that we consume and experience popular culture. Since the growth of personal electronic devices coincided with the popularisation of the internet in the late 2000s and early 2010s, substantial numbers of customers, predominantly millennials, are following this unstoppable trend and immersing themselves into a virtual world built by high-speed connection, advanced data collection, and personalised appliances.

People’s complex demands in this technology-driven era can be summarised as the following: price, selection, convenience, and reliability. Together, they compose the elements that set up the base of customer expectations and behaviourial trends. As people are occupied for most of their day with their jobs and responsibilities, they would like shopping to be made as accessible and transparent as possible. Where new digital technologies blend with a massive need for convenient retail platforms, a newly recognised term in e-commerce has arised: omnichannel retailing.

By combining artificial intelligence (AI) and machine learning technologies, omnichannel retailing reinvents the experience of shopping providing even greater convenience and social engagement. For instance, when a customer places an online order for the product to be delivered to his or her house, AI automatically absorbs these customer needs and preferences, then transmits this data to a computerised system. Instructions such as the collection of products from concentrated freight centres to the process of transport could all be smoothly carried in autonomy, reducing the amount of labour required and attaining greater levels of precision.

Looking at how AI is going to effect future sales of digital retailing, this computer-generated technology is inarguably powerful because it is tasked with the security and processing of data. In other words, by effectively taking advantage of the information and data gathered, sellers are able to make strategic marketing choices based on analysed reports of their target customers’ personal shopping behaviours.

While brick-and-mortar retailing is facing an impending collapse due to its inability to embrace technological advances, digital retailing has successfully discovered the new shopping channel. It is a bold step in reforming people’s attitudes toward shopping. In contrast, the failure of brick-and-mortar retailing lies in the sellers’ false perception that their customers would always come back and help generate in-store revenues out of a sense of loyalty to physical shopping experiences. Indeed, the lure of physically touching and sensing products still lingers on since people have always felt a need for physical connection in order for them to make the spending decisions they regard as worthwhile.

However, as people increasingly attach themselves to the power of omnichannel retailing, the convenience and smoothness it brings during online shopping have ultimately led to a burgeoning desire for physical shopping to be unique and compelling. In other words, what customers value the most in general shopping is the meaningful experience it brings. It not only applies to social marketing strategies utilised in digital retail businesses such as video streaming or augmented shopping experiences, but physical stores are also bound to impress customers with interactive shopping methods in order to remain attractive as another indispensable form of retail.

As people live in a technologically-advanced society that operates with personal precision, physical retailing has to be delivered to customers in creative formats; it needs to be entertaining, interesting, and emotionally engaging for people. There is perhaps no better example of this than China’s fast-growing e-commerce business, which is the biggest market worldwide valued at over $4.2 trillion in 2021. In this particular field of omnichannel retailing through a joint technological cooperation of AI, data and machine learning, China could proudly call itself the pioneering country for such potential business. By analysing the complex and detailed organisation of e-commerce in China and the highly developed environment of technology and social networks that lie behind, we can see the transformation of retail mark its historical presence.

Many people may recall the Silk Road, which was the ancient route of trade connecting the East and West. The name was actually inspired from the renowned silk trade actively implemented during the reign of the ruling Han Dynasty in China. It was the one profound pathway that elicited a 2000-year long history of countless cross-cultural interactions that extended to religion, science, philosophy and politics around the globe. However, it ceased to exist when the Arab Safavid Empire collapsed in the 18th century.

In the 21st century, the new Silk Road will be reconstructed following an official announcement in 2013 to initiate the One Belt One Road project. The revival of the main trading route between the East and the West is essentially a reflection of one of China’s ambitious plans in leading the e-commerce business to worldwide recognition and prevalence.

On the subject of how China develops digital retailing into a potentially lucrative market, it is important to note the widely popular culture of mobile device usage in China. Chinese consumers spend nearly five hours on their smartphones every day, immersing themselves in online interaction, commemorated posts on social media, and consumption of news and information. WeChat, TikTok, and Weibo are three popular apps in China which together offer users any possible form of leisure and entertainment they’re looking for, anytime and anywhere. E-commerce is what effectively connects the digital capabilities of three apps into a seamless and interactive experience of shopping.

Notably, digital retail giants like Alibaba and are taking the lead in the e-commerce market, offering huge digital platforms for customers to enjoy a single, collective process of online shopping. Product browsing, researching, selection, payment, and delivery could all be smoothly done through a joint system of online platforms. China’s e-commerce climate is so developed and technologically advanced that it explains how mobile devices generate 80% of retail e-commerce sales in the country, which is greater compared to the 64% global average for e-commerce sales. Essentially, one of the central features which drives the potential of e-commerce to new heights is the appliance of social media and networks when Chinese customers are buying products. For them, the pleasure of online shopping stems greatly from the interactive and engaging experience they had in search of the product’s usability and reliability.

In conclusion, one could see how technology stands as a critically important role in inducing customer experiences among varying social networks and media navigations. With the increasing development of augmented and virtual reality (AR and VR) in electronic devices, one may also witness a poignant experience of future shopping with AR services and VR appliances.

Anything is possible but nothing is certain as people become increasingly reliant on technology in their daily lives. Nevertheless, one thing for sure is that social and technological innovation will be a necessity for retail to continuously prosper as it has since the beginning of civilisation.


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