OREANDA-NEWS. March 11, 2014. Internet and e-commerce are having a large and lasting impact on retail globally, disrupting the traditional way of conducting retail business. At the same time, social media and mobile come of age with shoppers. In Russia we observe similar trends, according to the new report titled Achieving Total Retail: Consumer Expectations Driving the Next Retail Business Model, presented today by PwC Russia.

The report is based on a survey of more than 15,000 online shoppers in 15 countries and regions, including 1,074 online customers from Russia.

In Russia, e-commerce is growing rapidly. Among the 1,074 Internet users in Russia PwC interviewed, 1,006 have already made an online purchase, with around 600 doing so at least monthly. Over 40% of respondents reported using their mobile devices for shopping.

"We expect that sales through online channels will grow to 12% of total retail sales within a few years – a level seen in the UK already, against currently 3%" says Natalia Kozlova, PwC Russia TLS Partner, retail & consumer practice leader.

Quadrupling the share of e-commerce in retail will have a disruptive effect on the retail sector in Russia as we know it. Competition for consumers is increasing while retailers need to operate both online and off-line. In fact, this process has already begun with for example consumer electronics and home appliances already being severely affected with the challenge of losing in-store customers.

“No retailer can afford to neglect the relevance of interacting with its customers through multiple channels and, thus, must provide for a seamless transition among them. While consumers now view multichannel shopping as a given, retailers need to find the right balance between offering a superior customer experience while managing the costs and complexities of a multichannel model which are significant,” says Martijn Peeters, Partner at PwC Russia, Consulting leader for the Retail & Consumer practice “Today’s non-stop shoppers have taken things into their own hands, becoming more tech-savvy than retailers. Consumers have the tools at their fingertips to immerse themselves into the retail brand. Our research finds that consumers have strict expectations that challenge today’s shopping experience and, in response, retailers should embrace what we at PwC are calling Total Retail.”

A solid base for the further spread of e-commerce is provided by constantly growing Internet penetration across the country, both fixed line and mobile Internet. In 2013, for the first time more than half of Russian households had broadband Internet access. Penetration is projected to grow further to 68% by 2017, reaching 38 million households.

Mobile Internet penetration is expected to exceed fixed broadband Internet. Currently, 61 million people in Russia have mobile Internet, which is 43% of population. “Penetration of mobile internet is projected to explode in the next several years to reach 100 million users by 2017, or 70% of the total population. This will have an enormous effect on e-commerce.

To download an electronic English-language copy of Achieving Total Retail: Consumer Expectations Driving the Next Retail Business Model, visit www.pwc.ru/totalretail