1. Fusion of digital and brick and mortar: The world is moving from brick and mortar to eCommerce. However sellers need to keep exploring the ways to increase customer base and also retain the high demanding customers. The missing personal link in digital commerce will be filled up with the addition of brick and mortar set-up. This will be in the form of place to do trials, alterations, shipment pick-up / drop-off centers, complaint redressal, products showcase, cross selling and alike. The fusion will not only improve customer satisfaction and sales but also help in increasing brand awareness among the non-digital buyers.
2. Captive Logistics set-up will be sold out to main stream logistics players: Many large eCommerce players have set-up captive logistics functions in the form in-house warehouse and last mile distribution. This was mainly formed to maintain the promised service levels to the buyers. However with the time the main stream logistics companies will mature in their eCommerce service offering and at the same time eCommerce players will not want to put their time and energy into this non-core function.
3. Reduced revenue contribution of top tier cities: With the increasing internet and mobile penetration, the small towns and cities will contribute at par with top tier cities. Improved affordability of smart phones and internet services combined with user friendly mobile shopping apps will entice the small town and city buyers to move towards online buying. This also means that cash on delivery is here to stay for long J.
4. eCommerce players will become technology platform companies: Let the work be done by the experts. eCommerce companies will focus more on improving user experience, advancing to new technologies, sales & marketing and product/category line strategies. The drop ship model will rule the eCommerce world. Sourcing, procurement, human resource, finance and logistics will be outsourced to third parties. It goes without saying that eCommerce companies will be required to have a very strong partnership with these third party service providers with a mechanism of continuous review and upgrade.
5. Rise of Private labels: Conventionally private labels have been the bottom line contributors. With the ever increasing inflation rate, the product margins are getting squeezed by the manufacturers. Poor product margins combined with heavy supply chain costs will necessitate eCommerce companies to identify and develop private label products. This will be required not only to sustain the operations but also fetch better ROI from the brand investments.
About the author: Haresh is a management consultant with a top consulting firm in Mumbai. He can be reached at email@example.com