Human Capital, Consumer & Luxury Goods: E-Commerce

The Growth of E-Commerce:

The Coronavirus pandemic has presented the Consumer & Luxury sectors with a new set of challenges and opportunities. With stores closing and sales plummeting, many brands have shifted the focus online, investing in digital platforms to reach customers. Even before the pandemic, a report published in 2019 by Shopify anticipates a 276.9% increase in worldwide ecommerce sales by 2021.

However, in recent months the growth of e-commerce has accelerated even faster than initially projected. According to the latest Online Retail Index from IMRG and Capgemini, overall retail sales in June 2020 surged 33.9% (steepest monthly increase in 12 years). Market research firm CB Insights mapped the e-commerce industry, showing the top e-commerce start-up’s from around the world.

A New Landscape:

While global lockdowns begin to ease, consumers are continuing to favour the new digital landscape over instore shopping and many will be more inclined to shift their permanent shopping habits to online. Founder & CEO of Farfetch, José Neves, forecasts that in the future, digital transactions are expected to represent a significantly larger proportion of the overall luxury industry: “Digitization of physical retail was a distant innovation for many luxury brands and retailers, that may now be promoted from nice-to-have to must-have status.”

Online shopping behaviours are expected to include the inspiration stage of the purchase, providing a unique opportunity for brands to develop their digital marketing agenda. Additionally, innovative concepts such as virtual dressing rooms and e-store experiences have become more prevalent. Jean Paul Agon, CEO at Loreal recently commented that: “Our Brands are creating more personalised and engaging consumer experiences with amazing digital services like virtual try-ons, diagnostics  and live streaming – all this building relationships between brands and consumers”.

The 148-year-old beauty giant Shiseido Co. have been training beauty consultants to use live streaming and social media, working more closely with retailers on the techenabled shopping experience, and investing in new marketing content for online. CEO Masahiko Uotani expects the online proportion of global sales to increase from 20% to 30% within two years.

A Global Perspective:

In recent months, Amazon’s sales have grown by 40% to $88.9bn, helping the company record $5.2bn in net income for the three months to the end of June – doubling what it had earned in the same period last year. The boom in online sales has been in part driven by domestic shoppers looking beyond their boarders. Data from Global Media and Insights firm Neilsen outlined that 57% of worldwide online shoppers make purchases from overseas retailers. The below table outlines how global e-commerce is expected to develop:

2018  2023    Five-year Growth 
China  $636.1B $1,086.1B 70.7%
US $504.6B $735.4B 45.7%
France  $49.4B $71.9B 45.6%
Australia  $18.6B $26.9B 44.6%
Russia $17.2B $24.8B 44.2%
Canada $39.8B $55.4B 38.8%
Germany $70.3B  $95.3B 35.6%
UK $86.5B $113.6B 31.3%
Japan  $81.7B $103.6B 26.8%
South Korea  $63.7B $80.2B 25.9%

The E-commerce Job Market & the Impact on Talent:

With online channels blossoming and lockdown periods creating a boom in e-shopping, consumer and luxury brands will have to invest in their online platforms like never before. A Deloitte survey reports that 57% of firms are planning to increase investments into digital & online capabilities.

At the centre of such investment is hiring and retaining top class digital talent. However, competition between companies for top e-commerce candidates is rife and it is more difficult than ever to identify and hire elite candidates. This is no surprise given E-commerce employment has grown by 334% over the last decade and has created more than 178,000 new jobs.

Global Strategy Firm, McKinsey reports how changing technologies and new ways of working are disrupting jobs and the skills employees need to do them. McKinsey advises that companies should “rapidly identify the skills your recovery business model depends on”. Due to the
importance of e-commerce and online for many corporations, there is going to be a skills shortage and most likely a war for talent. In fact, McKinsey reported that “87 percent of executives said they were experiencing skill gaps in the workforce or expected them within a few years” in relation to hiring digital skillsets.

Data from Tech Jobs found that five disciplines account for more than 75% of the open roles in the e-commerce industry, making these the most in-demand roles:

Software Engineering:  32.3%
Operations:  15.2%
Marketing:  12.1%
Data Analytics: 10.1%
UX/UI Design:  8.1%
Other: 22.2%

Currently, more than 32% of the open e-commerce jobs are for software engineers. While software engineering is a broad discipline, statistics suggest that the most in-demand languages/programmes are:

Javascript: 44.43%
Python: 22.34%
Java: 22.29%
Ruby: 16.04%
Linux: 14.47%

Additionally, with more brands switching to an online model there is more need than ever to have a well-disciplined operations team. Nearly 16% of the open e-commerce roles are for operations positions as companies specifically seek out talent to manage their customer support and information technology platforms. Brands are also continuing to utilise data in new, creative ways to attract consumers and boost sales by investing in data & analytics experts who can help companies capitalise on the current e-commerce trends. Companies will need to hire Data Engineers and Business Intelligence experts to make the most of data insights, and to thrive in the new, digital world.

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