Let’s talk about the future and the future is NOW. Welcome 2016!
With technological boost and new practices of consumption, retail has been taking curious paths: we see a track record that goes through the expansion in the size of shops and the offer of thousands of SKUs in the same establishment; then we see the adoption of E-commerce platform as the ‘future’ of business and the questioning of the ‘gigantism’ of the stores; and now we see a mix of these two elements as the truest reflection of how each platform (physical and online store) is able to offer a distinctive value and add complementary services to the final consumer.
The adoption of the Ecommerce and multi-channel were once again the center of attention in the 2nd edition of the conference ‘The Everywhere Store’, promoted by Tlantic last October 2015, in Madrid (Spain). The conference received participants in the School IE Business School’s headquarters to discuss once again the retail guidelines, driven by the new purchasing and consumption patterns.
Watch the video: The future of Retail
We are now Multi-shoppers, a concept that I think it fits perfectly for those who practice ‘hybrid shopping experience’. The market must expands into E-commerce while also re-affirms the important role that brick and mortar stores will play. Attention retailers: take care of your stores, as they will be centers of experience, convenience, security, and especially-added service.
E-commerce – What are the challenges?
E-commerce is not a trend any more, is already a reality. It is developing exponentially, especially in sectors such as supermarket / food. This sector is one of the last on the “online” list – far behind industries such as music, books, travel and fashion. There is still a resistance in buying grocery, food and fresh products online. Why? Perhaps the pleasure in carrying out the physical purchase, the need to touch the product, read the compositions and ingredients, compare brands and versions or being attracted by promotions and product tastings. The online environment offers many advantages including the convenience and practicality, but also requires platforms with excellent navigation.
Large supermarket chains have suffered in the implementation of their online markets for not understanding the special requisites of this channel. In the online environment, for example, there are no shelves or physical exposure itself and therefore the Navigation Menu should be quite intuitive and should facilitate the purchase to the user, who feels frustrated when does not find what he is looking for easily. When retailers such as Mercadona, El Corte Inglés, Carrefour, Dia% (in Europe) set up their online platforms, they suffered at the beginning to achieve good levels of delivery and also to organized better menus and flows.
In this scenario of changes in purchasing habits we see supermarkets 100% online – the most famous today in Spain are Ulabox and TuDespensa. With better menus, automated warehouses and custom delivery options, these companies became the online platforms for Unilever and Kimberly-Clark – that preferred to use their expertise instead of investing on their own.
The launch of Amazon Fresh was also remembered at the conference and, in this case, we see an online retailer horizontally expanding its business by introducing new categories such as Perishables. According to Daniel Corsten, professor at IE Business School, the platform is getting intense criticism of its most frequent users because despite being a expert in the online segment, food products still represent a challenge to be overcome. Its users complain about the constant “out of stock” and say that most of their orders come incomplete due to rupture in stock.
Hybrid purchase – what does this mean?
If the emergence of E-commerce guided us to facility, convenience and accessibility, “click & collect” adds to these factors the ‘urgent sense’ and security. In this context, we can now research the product offline or online, go home and purchase it online and choose the option to “pick it up at the nearest store” (which can be faster) with the option of paying in situ (if the shopper still has some sort of concern in making online payment). In addition, the old trip to the POS (point of sales) brings reliability in knowing that the staff will be there to assist you with service.
The Danish retailer Dansk Supermarked, with 1,200 stores distributed in 5 countries (Denmark, Sweden, Germany, Poland and England) presented the new E-commerce platform for its BILKA.DK supermarket chain and the tools used to ensure a complete purchase experience of its sales channels. The client purchases online and choose among one of the many options of “Click & Get” the company provides. Besides, the chain also offers ‘shopping stations’ inside the stores, allowing the shopper to make his online purchase after seeing and physically trying the product.
The method has proven to be very advantageous for supermarkets (mainly regarding electronics, appliances and other items) since it reduces the physical stocks. At the same time, purchasing online in this case does not interfere on traffic in stores because consumers have to go through them to try their goods and later to pick them up – still being impacted by the merchandising. Alan Jensen, CIO of Dansk group, said online sales requires good software to ensure the control of real stock data – facilitating a single stock between physical and online stores and reducing the delivery time between DC and shops.
BIG vision – innovation is also a component for small businesses
Supermercados MonteSerrat is a small Brazilian chain, with just 3 stores in the country side of São Paulo, that also showed their business case during the conference. Edevaldo Retondo, director of the group, shared with the attendees their new Retail APP, released by the company five (5) months before the event and also in collaboration with Tlantic. The platform still does offer the E-commerce option, but allows consumers to carry out their shopping list by scanning product bar code, saving the list and then consulting the nearest store to finally go finish their purchases ‘in-store’. In this case, there is no online purchase yet, but the APP will indicate the location of SKUs in-store and will submit ‘Push Notifications’ with daily and customized deals throughout the time of purchase. The next step for the APP is to provide the ‘Click & Collect’ system – offering even more convenience to their customers.
Innovation is not a distinguishing factor only for the BIG players. The ‘smaller’ also become leader when it focus its strategy on the shopper. There is no secret at all.
Be closer and be engaging! We are Multi-shoppers!
Do you have another ‘case of success’ to share with us? This is your channel. I can not wait to hear more good examples.
Written by Fernanda Accorsi
Pictures Credit: Danks Supermarked / Supermercados MonteSerrat