The evolution of e-commerce: five facts to better understand the market
One of the greatest benefits that technology has brought to our daily lives is the reduction of distance. We can see and talk to people who live far away, watch movies and series from all over the world with just one click, order whole meals from our favorite restaurants without getting up from the couch. And these transformations, of course, also changed our way of buying and selling.
Thanks to the Internet, small entrepreneurs, as well as commercial giants, have been given the opportunity to sell their products via the Internet, and this is how e-commerce was born. In this article, we will tell the story of this modality and explain how it has changed in recent years, strengthened in retail as a whole, and enabled greater profitability for those who know how to use it to their advantage.
The main advantage of e-commerce is, and always has been, convenience as a benefit for the end consumer.
History of e-commerce
E-commerce – the English term for electronic trade – was created in Brazil in the nineties of the last century, more precisely in 1996, with the sale of books via the Internet. In the United States, however, this digital way of buying and selling is thought to have emerged earlier, in the mid-1970s, as the exchange of files and order requests. This means that e-commerce is new on the national territory. But that doesn’t mean it isn’t growing, and that’s why it’s full of possibilities. Data from the end of 2021 reveals that e-commerce already represents 17.9% of retail sales, an all-time record seen since 2018, when the volume of digital sales was only 4.7%.
The main advantage of e-commerce is, and always has been, convenience as a benefit for the end consumer. Today, we can buy almost everything without leaving home – from monthly grocery shopping to the latest technology. This does not mean, however, that the experience is always positive: there are still many logistical challenges in the shipping and delivery process, which ultimately create obstacles to further expansion of the sector.
In recent years, thanks to advances in technology and changes in behavior, the e-commerce market has seen very positive changes. Below we will talk about some of them and how to use them to your advantage.
The years 2020 and 2021 were marked by the Covid-19 pandemic, which affected the entire world. It was no different with retail: closed shops and minimal movement of people on the street was a nightmare for most small entrepreneurs, who had to reinvent themselves to keep their business open and discover new ways to sell online.
The sales sector of the Brazilian online market (a category that includes all sales of consumer goods and entertainment) grew by more than 20% in January of this year compared to the same period in 2021, according to data from Compre & Trust in partnership with the Brazilian Chamber of Digital Economy. When looking at the whole year 2021 in relation to the year 2020, the upward trend is also confirmed: e-commerce has passed the 25% growth mark, and the projections for the whole year are that the rising values will continue to grow. two digits.
This means that boosting online sales is more than a good option, but practically a necessity for anyone who wants to expand their business and increase profitability. It is worth remembering that e-commerce sales are not only those that take place on marketplaces or sophisticated platforms used by large retailers, but also those that take place through social networks, such as WhatsApp, since there are almost 120 million accounts of the application. about Brazil, the second country in the world by the number of users, after India, with penetration in 96% of the population. There is also Instagram, which launched native in-app sales in May 2020 and is present on 90% of Brazilian smartphones, according to international platform Statista.
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Another factor that contributed to the evolution of e-commerce and continued growth was the emergence of Pix in paying for online purchases. In January 2021, the rate of purchases made using this method was just 1% – a figure that had quadrupled by December last year, according to research by Neotrust, the company responsible for tracking 85% of Brazilian e-commerce.
Also according to the platform, Pix is already used in approximately 2.5% of all online payments, particularly in the fashion and accessories, food and beverage and beauty and perfumery sectors.
Mobile Sales: The Power of the Smartphone
When we think of digital sales, perhaps the first idea that comes to mind is computer shopping. But the Brazilian reality is not like that. Yes, we are – and live – connected: according to IBGE data, more than 80% of Brazilian households have access to the Internet and more than 176 million people are online. Between scrolling through their Instagram feed, sending audio on WhatsApp, and browsing stores and news sites, Brazilians typically spend more than ten hours a day connected.
But the entrance to the digital world is no longer computers, but smartphones, which are more practical and accessible to the population. It is estimated that Brazil has a total of 2.1 digital devices (smartphones or tablets) per person, or more than 440 million devices in the national territory that enable online shopping.
And they happen. Mobile represented 53% of Brazil’s e-commerce sales last year, a revenue equal to R$95.5 billion, according to the 45th Webshoppers survey by Nielsen | EBIT, which analyzed a database of 720,000 orders per day from 97,000 stores. Another important data of m-commerce – another way of calling online sales via smartphone or other mobile devices – is the increase in the average ticket. In 2021, the average amount spent on a digital purchase was BRL 398, which is almost 10% more than the previous year.
In the total number of requests via mobile phone in 2021, the increase amounted to six percentage points, from 53% (in 2020) to 59%, with 239.5 million requests. On the other hand, the average ticket jumped from R$377 to R$398.
This shows that an interesting way to increase sales in e-commerce is to work on mobile communication and strengthen the presence on social networks, paying attention to appropriate dates and offering special offers to those who buy via smartphone. The same Nielsen survey | EBIT reveals that among consumers who only use mobile phones for shopping (about 8%), more than 80% choose this modality because of promotions and because they don’t have to leave their homes.
Evolution of the market
With the increase in demand and the evolution of technology, e-commerce has also changed and become more robust to keep pace with consumer needs. Virtual stores have become marketplaces, a business model that has revolutionized e-commerce, through platforms that connect different merchants and customers. In other words: the simplified system of buying and selling has become a series of connected options that make it easier for the buyer.
This change is not only positive for the end consumer, who has gained more power of choice, but also for retailers and suppliers, who have gained more business opportunities, visibility and influence, because consumers can find them more easily. It is possible to draw a parallel with the emergence of shopping centers: in the same place, the consumer finds more options for shopping and services. The key words here are ease and practicality.
There are many benefits to using a marketplace format, especially as it increases audience interaction, views and traffic. The greater the volume of people, the easier the opportunities for sales and access to partner suppliers, and thus the increase in the profitability of your business.
Black Friday and new retail sales dates
With changes in the way we buy and sell, new opportunities have emerged in the retail calendar, created to take advantage of the movement on social media and the inevitable connection to what is happening in the rest of the world. There is no better example than Black Friday: a date created in the United States in the 1990s, it calls the day after Thanksgiving, which opened the Christmas shopping period and greatly increased traffic in the stores of North American cities.
Gradually, retail in the United States appropriated the term and created specific promotions for that period – and we Brazilians see this as an opportunity to further increase sales at the end of the year.
All over the world, Black Friday started with attractive discounts in the field of electronics, and here it ended in all segments. Another variant is the extension of discount days for longer periods of one week (Black Week) or even the entire month of November (Black Month or Black November).
In addition, with the rise of online shopping, other sales promotion opportunities have been created, such as Consumer Day, which is celebrated on March 15, and Free Shipping Day.
Have the ideal logistics partner to improve your e-commerce
Now that we have an overview of how e-commerce has developed in recent years, increasing the sales and profitability of your business, we must talk about another fundamental part of online sales: logistics.
Today there are fast, technological and intelligent options that revolutionize all ends of the chain and bring greater scalability not only to e-commerce stores, but also to local establishments that can act as points of collection and withdrawal of goods.
Understanding that this universe is changing more and more is, at the end of the day, looking at your business knowing how to adapt to evolution, looking for new ways to succeed, understanding exactly which options fit the profile of the package and the region. How about you better understand the market players and increase the possibilities of your business?
Also Read: C2M: Data-Driven Manufacturing Revolutionizes E-Commerce