The confluence of new technologies, new entrants and new consumer demands has catapulted retail into a state of flux. These market shifts are influencing not only the way in which shoppers choose to obtain their desired goods and services, but how and where they spend their money. Among many findings surfaced by 451 Research’s recently launched Global Unified Commerce Forecast, the most notable is the rate of speed at which consumer spend is moving into online and mobile sales channels. According to the forecast, digital commerce transactions will grow globally at more than a 20% CAGR through 2022, reaching $5.8 trillion.
Consumers are increasingly turning to online and mobile channels to make purchases that they traditionally would have made at the cash wrap in years past. This deflection of spend has been fueled, in part, by the rise of online marketplaces and the on-demand economy against the backdrop of new purchase experiences like click-and-collect and mobile order-ahead. This year, one out of every ten dollars spent globally will occur in a digital channel. By 2022, more than 17% of B2C sales around the world will occur online.
While strong digital commerce growth will occur across all geographic regions through 2022, the pace of growth and the transaction volume derived from each geographic region will be far from uniform. Payments and commerce stakeholders must pay particularly close attention to the size and dominance of the APAC region. APAC has already become the first region in the world to hit $1 trillion in digital commerce sales and is more than twice the size of the next largest region, North America. Admittedly, the sheer size of the digital commerce market in APAC is largely skewed by China, which will reach $1 trillion in digital commerce sales on its own this year. Online retail juggernauts Alibaba and JD have played a lead role in fueling this growth, as have leading online payment options Alipay and Wechat Pay.
As more purchase activity moves online, retailers must also be cognizant of mobile’s growing share of digital commerce. By 2019, for the the first time, the number of m-commerce transactions will exceed the number of e-commerce transactions globally. This will make mobile not only the primary computing platform for the world’s population, but the the top digital commerce channel as well. Businesses must keep in mind that mobile will increasingly be the first, and often times only, touch point they have with a shopper. Designing purchases experiences that can be easily consumed on small screen will be imperative to keeping conversions rates high and consumers satisfied.
Looking ahead, businesses of all types—and especially those primarily operating in the brick & mortar realm today—must adapt the necessary strategies to meet their customers at the myriad digital touch points where they are increasingly looking to conduct commerce. With digital commerce growing more than six times the rate of in-store sales through 2022, it’s more than apparent that a well-executed digital transformation strategy will be a hallmark of long-term, sustainable growth in commerce.