The retail world is taking on a new configuration giving rise to innovative experiential and service models generated by the interaction between digital and human elements. New digital spaces and omnichannel customer behaviors are reshaping customer engagement models and retail dimensions. From physical, to digital, to virtual, to social, to live. Moreover, according to the “Netcomm NetRetail” research, the shopping experience is increasingly omnichannel: four out of ten Italian consumers inquire online before buying in store. The Smartphone is the link between physical and digital retail.
“The Extended Retail: from Metaversi to Space Commerce”,this was the title of the Netcomm Forum 2023 was an opportunity to discuss the new territories in which retail has expanded in the very last few years and which will represent the opportunities of the near future.
But let’s take a step back and start from some premises that only figures and numbers can provide: in 2023 online purchases by Italians grew by 13% and will reach 54 billion euros. Products mark +8% compared to 2022 and will be worth 35.2 billion at the end of the year, while Services will touch 18.8 billion (+22%). In Products, after the generalized slowdown in growth in 2022, it is Clothing, Beauty and Information Technology that are the most dynamic sectors today (with increases of around +10%), while the progression of Food & Grocery slows down (+1% compared to twelve months ago). Among services, growth continues in Tourism & Transportation (+27% over 2022) and Event Ticketing. Online penetration of total Retail purchases is 12%, stable compared to 2022.
These are just some of the updated data on the eCommerce market in Italy, according to the latest survey of the Netcomm B2C eCommerce Observatory – School of Management of the Politecnico di Milano, which was presented at the Netcomm Forum – the reference event for the digital world on the issues of eCommerce evolution.
“Italians’ eCommerce purchases will record a double-digit growth trend in 2023 as well: on the one hand, services are experiencing a ‘second youth,’ while products are going through a phase of more controlled growth, partly due to inflation. In particular, product eCommerce, despite the fact that it is now perceived as central and indispensable for the future development of Retail, is facing several challenges, such as the tensions between innovation and sustainability (economic, social and environmental) and the scarcity of resources and skills, logistical and otherwise,” says Valentina Pontiggia, Director of the Netcomm – Politecnico di Milano B2c eCommerce Observatory. “Certainly, retailers have understood a fundamental point: eCommerce and, more generally, technological innovation (including Metaverse, Augmented/Virtual Reality and Artificial Intelligence) can help extend the concept of ‘space-time’ in the relationship between brand and consumer.”
Comments Roberto Liscia, President of Netcomm: “On the one hand, inflation has generated an increasing focus on price by consumers, while reshoring and redefinition of production have reduced the margins of technology and eCommerce supply chains. Artificial Intelligence, Blockchain, Augmented Reality, Metaverse, and NFT are opening up new horizons and potential in Extended Retail, but they also bring with them new challenges that businesses, especially small and medium-sized ones, cannot face alone. For this reason, it is essential that the government, including through the National Recovery and Resilience Plan, support this 4.0 evolution of the sector, take charge of digital training and support the aggregation of SMEs into consortia to help them become competitive even at the international level. The enhancement of Made in Italy also goes through this.”
THE PROFILE OF ONLINE BUYERS
According to the “Netcomm NetRetail” research, although the number of online shoppers, which has stabilized at around 33 million, is not expected to grow in 2023, the growth trend of the last 10 years leads to interpret this figure more as a reabsorption of the pandemic boom than as a halt in the digitalization path of consumers in Italy.
Moreover, in the last three years, the growth of habitual online shoppers (people who buy on average at least once a month) has been 5.5 times that of sporadic shoppers (people who report fewer than three purchases in the quarter): habituals reached 24.4 million this year, indicating that eCommerce has now entered the shopping habits of Italian consumers. Regulars, making 90 percent of transactions online and with receipts of generally higher than average value, generate most of the total value of online purchases (93 percent).
While in the early stages of the advent of eCommerce, the average age of shoppers was 36 years old, today it has risen significantly (46 years old on average) and the share of shoppers in large urban centers has declined: in short, the profile of online shoppers is gradually approaching that of the entire population.
THE OMNICHANNEL SHOPPING EXPERIENCE
Also according to the Netcomm NetRetail survey, the Italians’ shopping experience is increasingly omnichannel: digital also becomes a resource to guide the purchase decision, even if it then ends up in a physical store.
In fact, in 40 percent of cases, Italian consumers inform themselves online before buying in store, mainly by consulting an online retailer’s website or product/service, using a search engine or comparator (of offers or features) and suggestions found via social (comments and ratings).
The average incidence of consulting online services varies widely by category, reaching a frequency of three out of four purchases for Electronics products, followed by 70 percent for Sports Equipment.
At the same time, the store also plays a role in helping the consumer finalize the online purchase: in one in four cases, in fact, the online purchase was preceded by a visit to a physical store.
PURCHASING VIA SMARTPHONES AND APPS
According to Netcomm NetRetail, more than half of online purchases are made via a mobile device (Smartphone or Tablet), the remainder from a PC. The increase in Smartphone usage in eCommerce purchases compared to pre-pandemic – from 34 percent in 2019 to the current 48 percent – was mainly due to the increase in App purchases and seems to have reached an equilibrium in 2023. Although the Smartphone and Apps do not seem destined to become the only mode of online shopping, they have taken on a key role in the “smart” management of purchases-just think of the authentication methods required at the payment stage, which can often be managed through facial recognition or fingerprinting.
In addition to this, the Smartphone has become the link between physical and digital retail, also enriching the shopping experience at the point of sale: not only is it the digital touchpoint most frequently activated before concluding a purchase in store, but it also allows consumers to be recognized, have a personalized profile and benefits, make the shopping experience “social,” pay with a “tap,” and receive assistance in the after-sales phase.
Some final considerations to understand how digital evolution and eCommerce are key growth levers because they represent an enabling factor and an indispensable modernization opportunity. In fact, total digital retail is now worth 71 billion euros and is the top growth driver of the Italian economy. It contributed 40.6 percent to the total turnover growth of economic activities in the five-year period 2016-2020, involving more than 723 thousand businesses. Today, digital retail is a sector that employs about 378 thousand workers in our country.
Important points to keep in mind for the future include the importance of supporting: proximity commerce, which allows integration between large e-commerce players and small retailers, who can reach customers residing in neighboring areas; Made in Italy, digitally enhancing the artistic, cultural, artisanal, landscape heritage, and national food and wine and manufacturing excellence; and the creation of “small local digital malls,” consorting artisanal and commerce businesses with the creation of local supply hubs, capable of serving both proximity demand and the export of excellence at the international level; the model of industrial districts, which has enabled Italy to grow in recent years, promoting the birth of digital districts, which no longer have proximity alone as the aggregating catalyst, but where the glue must be complementarity in products and services; initiatives to channel the Made in Italy offerings of Italian companies on international Marketplaces (more than 400), supporting funding for new digital export figures and promoting integration with international Marketplaces.
