Digital is the new retailer world order and China is the “ghost of Christmas future”

Retailers today face many challenges. David Spitz offers advice on how to meet consumers where they are and predictions on the next Retail Revolution.

Wed May 16 11:19:00 EDT 2018
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Jointly celebrating the recently announced joint Shipping Partnership, Channel Advisor’s CEO, David Spitz and Pitney Bowes, VP of Partner Success, Rick Hernandez shared the staged at the second annual (R)etail Revolution conference, where both leaders shared insight into the critical market pressures driving change in today’s ecommerce and parcel shipping industry.

Challenges affecting today’s retailers and merchants

Today’s retail revolution is digital disruption via ecommerce, “like what Netflix did to Blockbuster in the last decade,” Spitz said, in discussing the challenges facing today’s businesses, both online and brick-and-mortar. Many retailers and brands do not have a digital DNA. They know ecommerce is important, but many still have an infrastructure for yesterday’s commerce world and struggle to get the digital competency needed to compete in today’s world.  

We used to think two-day shipping was fast, but now, expecting to get our packages within a couple of hours is the new norm, thanks to the Amazon-effect, Spitz explained. Most retailers are always looking for what is next and trying to figure how “my brand” will reach more consumers. Smart retailers realize digital is the new world order.

Consumers like to shop via marketplaces

The new digital world order dictates and data confirms that today’s consumer prefers to shop via marketplaces, such as Amazon, EBay and Alibaba. In a mobile-first world, shoppers do not want to have fifty different retailer shopping apps on their phone. They want a consolidated experience, a vertical shopping search engine – a marketplace, vis a vis the Amazon experience.

Retailers should look to this trend and determine how to make the consumer’s life easier and meet them where their preferences lie. Spitz asked, “Why make your consumer’s life harder?” The customer is what matters most – go with what they want.

The marketplace effect is here to stay

“Is amazon really going to eat the world?” Rick Hernandez asked, as the leaders continued to discuss the shifts happening in the industry. Spitz predicted, “Amazon will count for 70 percent of the US commerce world” in the future, but a half dozen sites are going to dominate the industry.

Amazon will dominate in the West, Alibaba in China and Asia and India is a bit of a tossup of who will be the marketplace king. But, the data shows that marketplaces will dominate and are here to stay, said Spitz.

The rise of China ecommerce and the next revolution for retailers

China is already “the center of the ecommerce universe today,” Spitz explained, in discussing China’s role in ecommerce. Today, China ecommerce is far larger than the US ecommerce market, and by 2020, the Chinese market will be larger than the entire world regions combined, continued Spitz. The China market is the fastest growing business sector for Channel Advisor, according to Spitz.

China is incredibly advanced as a consumer society, Spitz explained. For example, Chinese consumers have adopted mobile payments with a much higher penetration than you see in the US. Part of that difference is due to the fact that the West has had 100 years to invest in a retail ecosystem. Yet, China skipped the traditional retailer model as their economy quickly developed in the past decades, and instead jumped right into the digital economy.

Unlike in the United States, most Chinese consumers skipped desktop internet and were introduced to the internet through mobile phones. With the rise of Tmall, JD, and Taobao, commerce has rapidly become 20 percent of their economy, while the US is still stuck at about 10 percent, even though ecommerce first started in the United States.

Today’s Chinese consumer is like the “ghost of Christmas future,” according to Spitz. They show what’s going to happen in the near future in the overall commerce industry around the world: mobile first, heavily marketplaces, mobile payments.  Even with shipping, Jack Mao is heavily working on same day delivery and the rest will follow the same path.

Spitz explained that China is also continuing to become a consumption industry and continuing to hunger for Western products. Even as big as China is today, it still has a ton of room to grow and catch up to modern first-world economies. “China is underappreciated,” said Spitz. “I think most companies should be looking to sell into China. You really cannot ignore China.”

If you are a retailer today in the West, and you are not well versed in China ecommerce, then Spitz recommends you become quickly spun up on it. The China market has both direct and indirect challenges and opportunities in ecommerce that should not be ignored by today’s retailers and merchants. 

In the competitive world of global ecommerce, it’s important to know where the industry is heading and how others retailers are reacting. Take the Pitney Bowes Global Ecommerce Assessment to see how you stack up with your competitors – the survey offers a side-by-side comparison between your answers and those of your peers.

Then, dive into the results from one of the biggest global ecommerce research reports of its kind. The Pitney Bowes 2017 Global Ecommerce Report surveyed more than 1,200 retailers and 12,000 consumers around the world, outlining both retailer and consumer perspectives on the global ecommerce landscape. Download the report to learn how these trends provide key growth opportunities.