SRU marketing professor discusses the shift toward online holiday shopping
More people are expected to shop online this holiday season because of the COVID-19 pandemic, but according to Kurt Schimmel, a Slippery Rock University professor of management and marketing, retail trends were shifting toward an increase in e-commerce even before pandemic safety protocols were put in place.
Dec. 14, 2020
SLIPPERY ROCK, Pa. — While the COVID-19 pandemic has certainly curtailed many day-to-day activities outside the home, including dining, going to the movies and attending concerts and sporting events, one sector that is realizing an uptick is online shopping. Although the share of retail spending conducted online, known as "e-commerce," has steadily risen in recent years, the 2020 holiday shopping season should see a dramatic increase given pandemic safety precautions.
And that potentially sharp change in consumer preferences can significantly affect the way retailers and marketers operate, according to Kurt Schimmel, a Slippery Rock University professor of management and marketing.
"We've already seen increasing trends for e-commerce, but the amount that it's going up is pandemic-driven," Schimmel said. "And with that, we're going to see a changed retail dynamic because there's probably going to be about five years of growth in one year alone."
According to Digital Commerce 360's analysis of U.S. Department of Commerce data, the percentage of online retail spending in 2019 was 16%, a figure that increased between 1.0-1.6% in each of the previous five years. Specifically for holiday spending, the market research firm Forrester estimated that U.S. online holiday sales will grow 24% year over year in 2020. Deloitte, another research firm that surveys consumers, forecasted that total holiday retail sales will rise this year between 1-1.5% from 2019, lower than the 4.1% year over year growth last year, but the firm also predicts a surge of 25-30% in e-commerce sales.
"A big part of (the trend) is convenience," Schimmel said. "We are now a society that has gotten accustomed to the convenience of online shopping. Just look at how we can get our groceries delivered to us, or we can have orders set for curbside pickup."
Schimmel teaches several classes at SRU related to online shopping and the changing structures of retail business, including courses titled E-Commerce, Advertising Management and Global Dynamics of Business.
These classes will help students meet the demands of the marketing profession, which are only increasing as consumers increasingly shop online. Schimmel pointed to another Forrester study showing that 65% of consumers face challenges when researching or purchasing online, from items being out of stock to difficulty finding answers to questions.
"Retailers are having to catch up fast because when customers order something, they expect that order to show up at their door quickly," Schimmel said. "There's a lot of opportunity for things to go wrong on the back end, so we've seen a lot (of job growth) in e-commerce for the behind-the-scenes elements.
"Our students are understanding both the back end and the front end of the retail business on how the new economy is going to be working. The better paying jobs are in the back, looking at the information systems, computer security to make sure transactions are safe and looking at the shipping and logistics that go into it. Those elements are combined to improve customer satisfaction."
Other areas include email marketing, understanding consumer preferences, communicating to them in a personal way and meeting their needs with just-in-time promotions, all of which use data collected from e-commerce activity.
"There's a big shift happening in the retail market, for better or worse," Schimmel said. "The biggest retailer, right now, in the online sector is Amazon, but they are also providing the smaller mom-and-pop businesses an opportunity to sell through them. So while people complain that Amazon is moving toward a monopoly, from another perspective, they are also providing a format for small businesses to be able to sell their goods as well."
And while the pandemic might have accelerated a switch to online shopping, there's still a desire for people to shop in-store.
"We haven't yet fully transitioned from a model of traditional retail to a true e-commerce type model," Schimmel said. "But I think an increase in customer service and the ability to do more shopping from home and curbside pickup will be (the lasting effects of the pandemic)."
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