During an interview from Motley Fool Live, recorded on April 8, Global-e (GLBE -4.04%) CEO Amir Schlachet answers a question from Fool.com contributor Rachel Warren about whether the pandemic has led to any business shifts in retail or altered e-commerce in a fundamental way.
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Rachel Warren: We know we've been living through very unprecedented times over the last few years. This has presented new challenges for a variety of industries to be sure, including retail and e-commerce. What are some of the lessons or even business shifts that you see retailers taking amid recent global events? In addition to that, how do you see the pandemic as fundamentally changing the world of e-commerce?
Amir Schlachet: It's a great question. I'll start actually by saying something which is, I don't know if it's controversial or it is counter-intuitive. But I don't think that pandemic is fundamentally changing the trends in e-commerce and retail. What I think it is doing or has been doing, is accelerating changes and transitions in trends that were already there.
If you look at penetration rates of online or digital retail, out of total retail, they've been on the rise for a decade, before the pandemic came. What the pandemic did was press fast forward on this trend. The same goes for direct-to-consumer. Direct-to-consumer was growing from under a third of the online retail market some three or four years ago, to almost half of it this year, even without COVID.
I think what it was doing was really accelerating trends that were already there. What I think on the back of it, the shift that does happen in the market, and then I think we'll stick, is that there is no going back. There is no going back from the consumer perspective because a lot of people have been exposed to online shopping, both domestically and cross-border for the first time because they were forced to do there was no other option. It accelerated adoption rates for consumers.
I think that's obviously there is going to be some retraction as stores open up. But it's if you look at surveys and stats, you see that while people are shifting some of their shopping back to physical stores. It's not expected to be a complete revert to pre-pandemic stages.
But I think what's more important than that, especially from our business perspective, is that the brands had this shift, and for that, there really is no going back because direct-to-consumer was the trend beforehand, both domestically and in cross-border. You see that in action. You see bigger and bigger brands announcing that direct-to-consumer is now at the forefront of their strategy.
You cannot really imagine a brand saying, oh, it's great. Now the pandemic is over, let's say that it's over, we're going to go back to just investing and opening physical stores around the world and forego this whole direct-to-consumer thing.