LONDON, UNITED KINGDOM — A new special report by Henry Tricks in The Economist looks at the future of shopping, which is being transformed by e-commerce. The digital upheaval is changing the way things are made, marketed and sold. It will not replace the physical store, however.
The penetration of online shopping has surged during the COVID-19 pandemic, reaching levels some forecasters had not expected to see for years. In America and China, e-commerce giants like Amazon and Alibaba have had record-breaking years. Online consumption of essentials such as groceries and personal-care products have also soared. Yet only $4.2trn of $65trn of consumer spending is currently online, meaning there is much further to go. The physical store will remain central to the shopping experience. But its role will change. So will many aspects of the retail landscape.
The report looks at the way the traditional model of shopping — mass production, mass retail and mass consumption — is being overturned. Because of digitalisation and data tracking, producers have a more direct relationship with customers. The middlemen are being squeezed.
Some see this transformation in apocalyptic terms, but the report shows how in China, America and elsewhere, vibrant new businesses are challenging the tech giants, and how big physical retailers such as Walmart are adapting to the new environment. It explores the impact of a surge in e-commerce on jobs, data privacy and property. It shows how the store is changing to become somewhere to experience goods and services, rather than a place of transaction.
E-commerce is changing the nature of advertising and marketing, too, and brands are building up new relationships with shoppers such as subscription services. The special report assumes that a centuries-old consumer culture will remain integral to economic activity.
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