The Black Friday event is just a few days away and it is the first one after the pandemic. But now we are confronting new crisis: war in Ukraine, high inflation, energy problems. And we are expecting a recession in 2023. How will all these impact the consumers and online shops? Will people buy less or look just for good deals? We talked to Catalin Bordei, Managing Partner Innobyte, a web solution developer, to find out more about the coming Black Friday and the way online commerce is prepairing for the event.
Business Review: We are going to have the first Black Friday after the pandemic, with people free to roam where they want. But now we have a war nearby, inflation and an energy crisis. How do entrepreneurs approach the event with all these problems on their plate?
Catalin Bordei: The energy crisis, the war and inflation will influence both the budgets of online stores for organizing Black Friday campaigns and the purchasing decision of consumers. However, Black Friday will remain among the top priorities of online businesses because it’s one of the most important sales events of the year – an event awaited with interest by end consumers as well. They are more and more familiar with the concept and are preparing for Black Friday: they save their credit card data in platforms in advance, search for the products of interest in advance and add the desired products to the wishlists.
Online commerce comes with a number of competitive advantages in the face of all the challenges of the moment. Unlike brick&mortar stores, it allows consumers to save money by comparing prices, selecting the best offers or even better manage their budgets through buy now pay later or installment payment options. At the same time, it allows saving time by purchasing at any time and place or saving fuel by delivering the products to your home or lockers.
Innobyte has over 11 years of experience in the preparation and implementation of Black Friday campaigns for clients in Romania and we witness very good results year after year. With an increased focus on analyzing the results of previous years, focus on what worked, improving aspects that did not work, alignment with market demands, a thorough preparation of the infrastructure and performance of the platform, processes, stocks and partnerships with suppliers, online stores they can ensure that Black Friday 2022 will be successful.
What are the expectations related to sales considering that in 2020 and 2021 the eCommerce area has grown a lot? Will growth continue or are we entering a period of stagnation?
Large online stores and marketplaces have already announced their intention to participate in this year’s edition of Black Friday and expect higher sales than last year. I don’t think the question is whether a store should participate or not, but when to start preparations. With more and more advantages for the benefit of the end customer, I think there is a chance that we will see new records in sales this year.
What are the trends in eCommerce? What is sought and what is offered more?
The development of the eCommerce sector has also increased competition. Thus, online stores have to make consistent efforts to stand out in a noisy market.
Online businesses are looking to improve and optimize their platforms, simplify navigation, purchase and delivery processes and optimize the performance of online stores. Basically, to make sure everything works flawlessly. We at Innobyte perform complete code, performance, functionality or security audits for clients through which we identify those bottlenecks or development errors that can complicate or even affect the sale-buy process; bottlenecks that can cost the retailer generous percentages of sales.
Among the main trends we can list those in the area of online payments – buy now, pay later or payment in installments, delivery in lockers, hyper personalization of shopping experiences, creation of niche online stores, marketplaces or the adoption of an omni-channel strategy through which companies combine the online experience with that in physical stores. Last but not least, Live commerce, whereby companies include live streaming in their online stores to attract shoppers and increase sales.
Innobyte has both large and small clients – just starting. With which is easier to work? What are the challenges that each type of client offers?
When working with a start-up with ambitious plans in the area of eCommerce it can be as challenging as when working with an already established brand. We write success stories together regardless of size or complexity.
Every project comes with a number of challenges and a certain degree of complexity. There is no single formula that delivers the same results for all companies, so our solutions start from their business needs. Collaboration with each client begins with the consulting phase. It is a vital step through which we manage to identify the requirements that bring real value and eliminate or postpone those for which the implementation effort is not justified by the business value delivered.
In general, start-ups have a lower tolerance for testing ideas and have limited resources in all respects, so through the analysis and consulting process we shape the client’s business requirements and the project goal in order to maximize the results.
How did Innobyte’s business evolve in recent years and what are the estimates for the next period? How has the team evolved and how easily do you find new colleagues (given that there is still a crisis of well-qualified labor)?
Innobyte’s business has seen spectacular growth, in tandem with the growth of the eCommerce market, as a result of the increasing demand for eCommerce development services, but also against the background of the increase in services from existing customers. In 2021 we recorded a 21% increase in revenue compared to the previous year, increased our client portfolio by 30% and started new projects with existing ones.
We currently have a team of 38 highly skilled specialists. We always have roles available in the eCommerce team for Magento developers, Front end developers or testing specialists. We aim to bring at least 10 new colleagues to the team in the next 6 months.
What are your future plans? How do you think eCommerce will evolve in Romania in the next period?
Innobyte became a VTEX partner, and through this partnership we develop and implement online stores on the VTEX eCommerce platform for Romanian customers. Since the beginning of the year, we have invested in attracting specialists and training with VTEX solutions, which we will continue in the coming period. We estimate that in the next 3 years, somewhere around 30% of Innobyte’s revenues will be from collaboration with VTEX platform customers.
Regarding the evolution of the eCommerce market, if in the last two years we have witnessed an accelerated growth of online commerce in Romania, we can currently speak of a consolidation stage. Those merchants who will update processes and businesses to current contexts, increase the performance of platforms, and implement the best tactics to attract and retain customers will remain competitive.
There is still a lot of room for growth for online commerce. The eCommerce sector reached the threshold of 6.2 billion euros at the end of 2021, with approx. 10% more than in 2020 according to ARMO and GPeC estimates, and in 2022 online commerce could grow by up to 10% compared to 2021 in terms of the number of online orders placed and delivered.
Consumers have caught the taste of online shopping and appreciate the advantages: the convenience, multiple possibilities of paying online and in installments, possibility to compare prices and multiple options they can choose from.
I predict that we will see sales increases in the coming period as well, but also consumers with ever-growing expectations, which will increase competitiveness and lead online players to offer services, products and offers at an ever-increasing level.