Executives think ecommerce is broken even within their own companies, and regulatory agencies are beginning to agree.
A study commissioned by Zoovu and conducted by Forrester Consulting reveals that 65% of more than 400 executives believe online commerce is "broken" at their organizations. The core issues cited include inadequate product data management and insufficient e-commerce platforms, which hinder the online product discovery and purchasing process.
Meanwhile, the e-commerce market is facing scrutiny from antitrust authorities in Mexico. The Mexican antitrust regulator, Cofece, has recommended that Amazon and Mercado Libre implement "corrective measures" to foster competition, highlighting the dominance of these platforms in controlling 85% of eCommerce transactions and sales. This move underscores the growing concern over market concentration and its impact on smaller retailers and consumer choice.
Pressure from European Union regulators also recently torpedoed Amazon’s intended acquisition of iRobot, maker of Roomba vacuums, over similar competitive concerns.
At the same time, retailers are dealing with younger shoppers’ increasing move toward DTC purchases.
Recent reports have highlighted a growing preference among consumers, especially Gen Z, to purchase directly from brands rather than through third-party retailers. With Gen Z's spending power amounting to an estimated $169 billion annually, and a notable $72 billion potentially directed towards direct-to-consumer (D2C) purchases, the trend underscores a significant shift towards brand loyalty and personalized shopping experiences.
The reports also underscore the diverging preferences across different demographics. While millennials and bridge millennials show a similar inclination towards brand websites, baby boomers are more likely to patronize third-party retailers' sites, driven by factors such as product variety, competitive pricing, and trust.
These findings highlight the complexities of digital transformation. Despite these challenges, companies that embrace digital transformation, leveraging AI and investing in improving product data and discovery, stand to gain a competitive edge!
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