End of the Corona boom in online retailing

For a long time, online retail benefited from the corona pandemic. Now, however, sales at half of the online stores surveyed in 2022 have declined year-on-year and are at the same level as before the pandemic. For the other half, growth continues - albeit at a slower pace. However, nine out of ten online stores in Switzerland and Austria say that the boom in online retail is over as a result of Corona measures. This is shown by the current online retailer survey (2023), which was conducted for the sixth time in a row by the ZHAW School of Management and Law.

Purchasing power has decreased

88 percent of retailers in the survey agree: the Corona e-commerce boom is over. 87 percent of respondents share the view that consumer sentiment has deteriorated, partly due to the Ukraine war and fears of a recession. Two-thirds assume that competition in online business has grown. "We also see in the survey that online retailers assume reduced purchasing power due to inflation. Customers are spending their money elsewhere, for example on travel and events. Some retailers also suspect a shift from online to offline to brick-and-mortar retail," explains Darius Zumstein, study director and e-commerce expert at the ZHAW School of Management and Law.

Artificial intelligence in e-commerce

"Artificial intelligence offers online retailers quite a few opportunities in many areas of e-commerce to make their online store more efficient and profitable," said Darius Zumstein. Most commonly, Artificial Intelligence or Chat GPT is used for online store copywriting and search engine optimization. Automated product and offer recommendations are also frequently used.

Artificial intelligence with chatbots plays an important role in customer service. A good 15 percent of the online retailers surveyed are convinced that this will further improve personalization in the online store. "Artificial intelligence can not only optimize the business of online retailers, but also offers added value for the clientele at the same time. For example, clothes or shoes can be tried on virtually thanks to augmented reality," says Zumstein. Image 3

Competitive market and shortage of skilled workers

The greatest challenges in e-commerce lie in the competitive markets as well as through increasing complexity and high costs in marketing with tight budgets. For example, half of the e-commerce companies surveyed lack qualified personnel and expert knowledge. This means, among other things, that the online stores cannot be technically developed as quickly as desired or that customer acquisition and consulting can only take place on a reduced scale.

TWINT continues to gain ground

Mobile payment, i.e. paying with smartphones or smartwatches, is also becoming increasingly important in online retailing and is changing payment option preferences. Among Swiss online retailers, payment via TWINT has become more important than sales on account, making it the second most important payment method behind the credit card. Apple Pay and Google Pay are also growing rapidly at a low level. Image 4

Source: www.zhaw.ch