Ecommerce and Brick-and-mortar Retail Converge

While there might still be plenty of space for pure-play ecommerce companies, retailers with physical stores should look to expand online as customers stop seeing a distinction between purchasing online and at a shop. Increasingly, physical retail outlets are being changed into a type of brand-building media.

The U.S. retail sector grew 2 percent in the first quarter of 2013, based on trend-tracking firm, comScore. By comparison, online retailing in the U.S. climbed 13 percent to about $50 billion for the same quarter, effectively making ecommerce the fastest growing retail segment.

This form of information generally has online merchants happy at their prospects and store-based retailers concerned about trends like showrooming — where shoppers compare prices or even make purchases on a mobile device while standing at a physical store. (See “Showrooming Challenges Brick-and-Mortar Retailers.” ) But it might not be the case that the ecommerce and brick-and-mortar channels are somehow at odds, but instead that all of retailing has changed so significantly that, in a sense, there’s no true distinction between stations, at least in which the consumer is concerned.

If, in actuality, retail stations are somehow converging, it’s the traditional retailer that’s responsible for the most change. However, no merchant can go untouched.

Clients May See All Channels Just as Shopping

“Consumers no longer find a distinction between offline and online shopping,” composed Sridhar Ramaswamy, Google’s senior vice president of advertisements and trade, in a recent whitepaper. “Whether it is searching on a laptop, browsing main street stores, or hanging out in the mall — it is all shopping.”

There’s absolutely no basic difference to the shopper if she looks at a product online and buys it in a store, or does the inverse viewing a product on a stand, simply to purchase it from her phone because it’s simply more convenient or, possibly, less expensive.

“When something can be economically shipped to anybody, anywhere, the question of where the sale takes place is quickly becoming moot,” compose Doug Stephens, a retail sector futurist and the creator of Retail Prophet, in a recent issue of Retail Environments magazine.

Convergence may mean that each and every store must compete with each other shop, irrespective of format. Ecommerce companies have recognized this, since from the start every online retailer has had to compete against big box stores and local specialty stores alike. But small or even midsize physical-store-based retailers who have enjoyed a sort of geographical monopoly are increasingly exposed to the net of retailers because of mobile devices and faster Internet connections.

Convergence can also affect how all retailers offer customer support and how brick-and-mortar retailers consider their physical locations.

Allergic Effects Client Service

Shoppers who see no distinction between ecommerce and offline buying might also have similar expectations for customer support in both channels.

For instance, shoppers in stores are accustomed to using an attentive clerk that they might talk to. In precisely the exact same manner, a shopper visiting an internet store may expect to have the ability to speak to an associate almost immediately via chat, phone, email, or perhaps social websites.

As yet another example, Google’s Ramaswamy wrote that contemporary shoppers often know as much as a shop’s salesperson about a given product or product class. Previously,”people came into shops with little to no understanding and relied upon a salesperson to advise them on what to purchase.”

By comparison,”today’s shoppers have become accustomed to doing their own research to find the most value from each dollar they invest, and to feel secure about the purchases they are making. With this power shift comes a excellent opportunity for retailers; people who use insights and tools from the net have the chance to close the gap between the clever online consumer as well as the offline merchant, and stick out in a competitive market,” Ramaswamy wrote.

To put it differently, Ramaswamy is suggesting that conventional retailers should post decent product information online so that they might continue to help inform shoppers.

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Convergence Impacts Branding

The convergence of electronic commerce — such as mobile — and in-store retailing can also significantly alter how brick-and-mortar retailers think about stock and branding, and the manner that primarily online retailers have a look at the advantages of having a physical place.

“In the long run,” composed Stephens,”sales of merchandise simply can not be the primary strategic purpose or metric for the [physical] store.”

“Until quite recently the principal purpose, form, and purpose of shops was to distribute goods. Shops were the principal and, oftentimes, the only means of availing supply of goods to a given market.”

Online shopping transformed that purpose. As a result of ecommerce and carriers such as FedEx, UPS, as well as the U.S. Postal Service, it’s almost easier to find a product in the ecommerce station than it’s from a shop, where a shopper must lug products around.

According to Stephens, this tendency can be viewed first hand in some brick-and-mortar retailers. “Some of the world’s biggest retailers are struggling with this jarring reality already,” Stephens wrote. “`Stack it high and watch it fly’ has turned into’Stack it low and hope it moves’ as big-box stores scramble to lower inventories in the face of declining sales.”

At exactly the exact same time, some major ecommerce companies are opening physical shops. For instance, online men’s clothing retailer Bonobos has begun to open physical shops.

Bonobos and other pure-play online retailers”realize that in order to’fully actualize’ their brands,” Stephens wrote,”they will need to animate a physical existence and visceral experience for their clients, to not move products but more seriously to move hearts and minds.”

Effectively, some online retailers are recognizing that they can expand their brands with real stores. For instance, online merchants that open a physical store often see an increase from Facebook fans from the geographical area around that shop. The physical shop, whatever it’s doing to the main point, is building the brand.

In short, since the offline and online shopping channels converge, pure-play ecommerce retailers might seem to open physical shops, and conventional stores should start to market online, if they haven’t already.

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