The retail sector has been undergoing profound transformations for the last ten years and continues to expand with different changes being noted across its formation. Looking back ten years ago, introduction of radio frequency among other technologies was a huge plan in the retail industry in order to provide effective accessibility and improved security. Most importantly, customers had not become acquainted to technological advancements ten years ago, since they preferred to use physical retail stores. E-commerce was introduced in the 1970s despite the fact that it only covered a small section of the world. E-commerce only contributed to 2% of total sales in the retail industry (Barbaro). E-commerce has been approximated to have contributed $200 billion and will attain $500 billion in the future within the United States.
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It has been reported that the retail industry is currently growing at a rate of 19% across the world annually (Wingfield). That has been notable in giant retail businesses such as Amazon that has transacted 306 sales each second during the previous holidays. ASOS is also another giant business that has put a record at one item for 6 seconds across Australia. Development of the retail industry can be attributed to changes in technological advancements through innovations and creativity of individuals (Wingfield). Another indicator of growing retail industry is development of E-commerce that accounted for 6.4% of total sales in the second quarter, 2014. That was three times higher as compared to sales made ten years ago and that will constantly increase with the introduction of other business models, such as mobile commerce (M-commerce) among others (O’Connor). Use of smartphones is becoming rampant across the world replacing the old-fasioned type of phones that had small screens and low speed. The smartphones enable easy online shopping and communication in the retail industry. Moreover, socializing, photo shooting of products, online sharing and quick feedbacks within the retail industry has been enabled by the use of mobile devices. It is now evident that the Internet has emerged as a critical shopping alternative replacing the traditional brick and mortar businesses (O’Connor). Transformations and development of the retail industry will touch four major sectors including social media, E-commerce, virtual world and brick and mortar stores in order to respond to the evolving retail market.
Social Media Networking: Role in the Retail Industry
Social media networking has contributed to notable developments in the retail industry over the past ten years. Social media started with the launching of certain networking sites such as MySpace that was done in 2003. It competed with Live Journal followed by Facebook that was launched in 2004 (Lutz). From then, many social networking sites have been introduced and they have contributed greatly to the growth of the retail industry. Then, they were not used for sales and advertisement services by the retail industry until lately that they have become major sites to carry out retail activities. Currently, high street shopping has taken a large part in social media, including Pinterest and Facebook. Localization and personalization of online shopping has been made easy through social media networking, since it has enabled interactions of retailers and customers (Barbaro). In addition, social media has provided a platform, in which retailers can relay their messages that create amicable shopping experiences for their customers.
With the current trends within the social media, it seems that retail industry will greatly benefit in the fact that people will be able to purchase directly from the homepage after viewing a post by another user. It seems that a single click will lead to purchase, since bank accounts will be linked with the social media accounts. In other words, social media is likely to emerge as an effective bridge between clients and retailers. Furthermore, commercials will be conducted through social networking sites, including video commercials through certain sites such as Instagram, Vine, Snapchat, as well as Facebook. That will lead to huge developments of the retail industry by 2020.
Avatar and Virtual World: Role in the Retail Industry
Predictions indicate that 2020 will be characterized by increased spread of virtual reality along with cyber technology in order to increase physical shopping experience across artificial environments. Research has stipulated that retailers will sell real, as well as imaginary commodities within the artificial environments by the applications created in avatars and virtual settings (Ramaswamy). Virtual realities will play a huge role in increasing the level of online consumption. In the Internet platforms, virtual reality will play part in creating an optional way of retailing that is multi-channel retailing. That will expand the chances of interactive marketing for the retail businesses. It follows the fact that virtual and avatar shopping worlds will be used for advertising, selling, testing and launching new products into the markets. A good example is the use of Oculus Rift that will enable customers to shop in the virtual retail shops (Lutz). Virtual shopping enabled customers to see sizes of products and make comparisons with other products the same way that they can do in regular retail stores.