HomeeCommerce NewsBuy vs Build analysis, marking business-platform rift of the new year 2021

Buy vs Build analysis, marking business-platform rift of the new year 2021

When at the one hand 2020 has been the year of digital commerce, contactless payments, and revamped retail structures, on the other hand, 2021 is going to revolve around business growth at the mercy of platforms.

Since there is a growing tendency towards the usage of more and more digital commerce, a balance between retail-customer experience and profit- revenue growth is to be maintained. Here’s where platforms come into the picture who are also mostly winning amid these pandemic situations.

All those retailers who digitally survived this year were mostly powered by the technological efforts of platforms. Not only did they survive but were hugely dependent on companies ranging from  DoorDash to Square to Shopify. These commerce enablers have been business savers, but enterprises of all sizes are going to struggle to find the balance between costs, digital reach, and profits.

This year,2021 is going to be somewhat troublesome since rifts between businesses and platforms are just starting.  For instance, Supermarkets are wrestling with Instacart, which enabled delivery networks during the COVID-19 pandemic but are passing along service fees in many cases. DoorDash and Uber are providing competition as is Target’s Shipt service.

There is no doubt that during 2020 that technology and digital commerce platform survived the pandemic wave. Mastercard SpendingPulse data illustrates how quickly retail and broader businesses went digital. For the 75 days of Christmas from Oct. 11 to Dec. 24 total retail sales were up 3%, a tally below National Retail Federation projections. E-commerce sales were up 49%.

However, once the pandemic waves vanish, will the businesses be able to pay these platforms out of their already bleak profit margins or another option being businesses will open their own delivery networks and fulfillment operations to keep more of the profits?

Many businesses including Shopify, Square, etc are in doubt about their pricing since they believe their customers to be price sensitive. They are worried about competition rivalry and that they would lose out on gross profits.

Ultimately, 2021 and the emergence of the COVID-19 pandemic may result in more build vs. buy debate among businesses. Although in 2020, digital building capabilities were not an option considering that they didn’t have investments in place but now the companies are surviving and looking for cheaper solutions. They are contemplating the power of platforms and the impact on profits.

Sanna Sharma
Sanna Sharma
Sanna Sharma is an emerging freelance content writer, specializing in content relating to e-commerce news. She is working with Ecommercenext.org currently. It is a platform that provides the latest e-commerce news, events, blogs, webinars, reviews, job postings, and analysis from around the world. She is a keen individual with competitive writing abilities and is always working on herself to become a better her.

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