October 24, 2013
From m-commerce to distribution, retail reinvents itself
Our recent report “Retail Rebooted” noted that retail is in the midst of a momentous shift. “The retail environment is as dynamic today as it has ever been,” observes McKinsey in a new report on the sector in North America. Already the evolution has been rapid: A chart (above) shows that 6 of the 10 biggest American retailers in 1990 are missing from today’s Top 10. And Amazon, founded in 1994, is proving to be an increasingly formidable newcomer.
Among the key trends McKinsey spotlights is the rise of m-commerce: “Digital commerce is poised to explode,” with mobile expected to comprise as much as 15 percent of e-commerce sales this year. About half the daily traffic that Gilt sees comes from mobile platforms, for example, which contribute to around 30 percent of the fashion retailer’s sales. McKinsey echoes a theme we outlined in our April report, “13 Mobile Trends for 2013 and Beyond”: that mobile devices are becoming integral to the consumer process. As we noted, consumers are tapping into mobile resources as they discover and research goods and services, order and pay, share purchases with social networks, rate products and experiences, and engage with brands post-purchase.
Digital commerce has helped to drive a “distribution revolution,” as McKinsey puts it. We’ve spotlighted the rise of speedy delivery services; McKinsey believes that fairly soon, same-day delivery will be available in metropolitan areas covering almost three-quarters of the U.S. population. Indeed, this week eBay announced it is acquiring Shutl, a 5-year-old U.K.-based company that leverages local couriers to deliver goods ordered online within several hours. “Traditional retail isn’t going away,” said eBay President Devin Wenig at a media event. “But it is transforming, and that creates enormous opportunity within the $10 trillion total commerce market.”
Image credit: McKinsey