USA- Research and advisory company Forrester has predicted significant growth in the e-commerce market, the firm forecasts global retail sales to increase from US$4.4 trillion in 2023 to US$6.8 trillion in 2028 as new entrants, product diversification and service specialization continues to improve the sector.
Despite a decline in e-commerce sales in the years since the COVID-19 pandemic, the report reiterates huge potential of the online retail market owing to positive dynamics of the market.
The report included information from more than 40 countries worldwide, representing 88% of the world’s GDP.
The predicted expansion is attributed to the fast-paced evolution of e-commerce, which offers convenience to customers and attracts investors in the sector.
Forrester attributes the potential to growth of different and specific marketplaces, online groceries, quick commerce, BOPIS, social commerce, DTC and livestream selling.
The report cites another report by Accenture that predicts social commerce sales will increase significantly to US$1.2 trillion worldwide by 2025.
The research company encourages continued R&D and investment in e-commerce, stating the retail market is experiencing a metamorphosis driven almost entirely by digital technologies.
However, Forrester cautions against dismissing the role of physical stores in the online shopping experience, revealing they remain integral to the successful, widespread implementation of e-commerce.
According to the report, opening a new store in an area increases e-commerce shopping by 6.9% a ripple effect that increases to 14% for DTC brands. The report also reveals closing a physical store in an area results in an 11.5% of online sales in the area.
Forrester also revealed that the market encourages and rewards hybrid business models for e-commerce players, incorporating the advantages of both physical locations and online shopping because of the supply chain limitations of exclusive selling via e-commerce platforms.
Jitender Miglani, senior analyst at Forrester, said, “The hybrid business model leverages the strengths of both physical and digital platforms to offer a seamless customer experience. It helps meet consumer expectations for flexibility and convenience by providing multiple touchpoints for engagement. Integrating online and offline channels also helps create a cohesive omnichannel experience.”
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