Cashless Revolution and Younger Generation Will Shape and Disrupt Retail, Amazon Says
The cashless revolution, which has accelerated in the wake of the Covid-19 pandemic, and a new generation of consumers will shape the future of the retail industry, according to Amazon, the largest e-commerce company in the world. world.
While businesses are seen as the engines of disruption, Seattle-based Amazon believes that when consumer behavior changes “significantly,” they become advocates for change, said Paul Misener, vice president of Amazon. for global innovation policy and communication, in a press release. interview with The National to Dubai.
The global retail industry has mushroomed, with demand and consumer behavior influencing trends. Combined with increased competition and supply chain issues, these have sparked a fierce battle for market share among retailers.
E-commerce, in particular, has benefited from this rapid growth. Global sales are expected to reach $ 6.39 trillion in 2024, up almost a third from the $ 4.89 billion forecast in 2021 and up almost 400% from the $ 1.33 billion. dollars ten years ago, according to Statista data.
Amazon reported sales of over $ 386 billion in 2020, less than 1% of this year’s global total of $ 4.28 billion. But it’s still the world’s largest e-commerce company, with sales more than triple that of China’s JD.com, the world’s second-largest online retailer.
Millennials – those born between 1981 and 1996 – have played a major role in the global trend. It’s the generation with the most digital shoppers, with 85.9% shopping online, according to content platform Power Reviews.
Millennials shoppers also depend on ratings and reviews to make informed buying decisions, with 99.9% reading reviews when shopping online and 63% reading reviews when shopping in-store, a- he added.
“At first, putting your card information online was new. It was even a big problem in countries that adopted the Internet early, ”Mr. Misener said.
“It’s a generational thing; today, young people entering the ranks of consumers are very comfortable with cashless payments, and it is no longer an obstacle to the growth of the industry as young people encourage others.
Meanwhile, Gen Z – those born between 1997 and 2021 – have an estimated purchasing power of $ 323 billion, business application platform CGS said in a recent report. While 67% of older generations depend on sites like Amazon, only 37% of Gen Z have shopped on the platform, CGS added.
Gen Z are also spending more on sustainable shopping destinations, with around 15% using second-hand sites like eBay or ThredUp for non-essentials, compared to just 3% of baby boomers. Another indicator of Gen Z’s preferences is Depop, a UK-based resale site, with 90% of its users under 26, CGS said.
Loyalty programs, such as discounts on future purchases, are also at the top of Gen Z’s list and are more important than quick delivery times, company philosophy, and even product quality.
“It’s hard to say which one is the best out of all the online, offline, or hybrid products because it can mean a lot to the types of products you sell. The real challenge is that customers have so much choice now that everyone has to follow, ”Mr. Misener said.
Acquisitions to integrate
While Amazon has been involved in more than 100 mergers and acquisitions since 1998, Mr Misener said this was a relatively small number as Amazon looks more at how the integration of another company s ‘would integrate into its strategy. Its largest transaction was the acquisition of Whole Foods for $ 13.7 billion in 2017.
“We are not exaggerating on acquisitions. The reality is that we have grown so much as a business on the inside. If an acquisition makes sense, we will, but it must also fit into the business to be part of us, ”he added.
Amazon has branched out into other industries as well, including its Prime Video streaming service which rivals Netflix and its Luna gaming platform to challenge Microsoft and Google. At the recent Fantom developer conference in Abu Dhabi, its Amazon Web Services unit said it would help attract the first billion users to the blockchain industry, creating opportunities to build products and services on secure platforms.
“The future of retail meets consumer demand not only for a wide selection of products and services available, but also for better delivery quality. Consumers will be increasingly picky about how they buy and the level of service they expect, ”said Mr. Misener.
As with many other businesses around the world, Covid-19 caught Amazon off guard and spent around $ 800 million on Covid-related security measures in the first two months of the pandemic, Mr Misener said.
“It taught us to innovate the same way we had to innovate all the time, but we weren’t prepared like everyone else. We found ourselves in a place where we had to act very quickly to protect not only our employees but also our customers. We’ve been perfecting security for over 20 years, but not for a virus, ”he added.
Amazon, founded in a garage by Jeff Bezos in 1994, began by selling books online. Mr. Misener – engineer, scientist and lawyer – was hired in 1999 by Mr. Bezos, currently the second richest person in the world. He left his role as managing director in July to focus on his other businesses and was replaced by Andy Jessy, but remains executive chairman of Amazon.
In October, the company announced a decline in profits, which is expected to continue throughout the holiday quarter, with heavy expenses to maintain delivery operations.
Update: November 19, 2021, 4:30 a.m.