In 2017, French e-commerce experienced a beautiful evolution with disparities that lessened over time while remaining overwhelmingly positive! The French spent 81.7 billion euros. That’s 14.3% more than in 2016! Watching this sector grow, one question pops up: what will become of our dear old superstores and small shops? Well, they’ll disappear… No, of course not! Our brick-and-mortar stores will not simply disappear because we can buy on the Internet, and for the sceptics among you, I will explain why by way of 2 key concepts that demonstrate the complementarity between physical and online shops: the Phygital and the ROPO (and no, I didn’t make up these terms just to impress you).
Let’s not waste a minute longer!
Okay, so now that things are clearly stated, let’s take a look at commerce basics to understand how we got here. Let’s start right off in the 1950’s and 1960’s for a quick review of the arrival of the first big change to French commerce: obviously, I’m referring to the arrival of the superstores! Ah, the superstores, the beginning of great promotions and mass consumption! Presented as such, you might think I’m hostile to this type of consumption: far from it! Everything changes over time, and mankind hungers for change while not always easily accepting new things which are at first perceived as creating insecurity. When the superstores first opened in France, they were first seen as a threat to traditional businesses, and the end of the neighborhood store! Since then, there’s been water under the bridge, mindsets have changed, and now less than 50 years later, it’s the superstores that are facing the popularity of the Internet which is shaking up ways of consuming.
The Internet has moved along its path, and as the French singer Brassens sang, good people don’t like going down a different path. The arrival of e-commerce didn’t convince everyone, starting with the merchants. While some shops experienced difficulties as a result of not adapting to digital, those that saw the upcoming bend in the road and adapted still continue their activity as time passes by. One must also understand that we can’t do without brick-and-mortar stores. There’s always a factor that pushes us to visit a store, to try something, to discover, to test, to project, and that’s where the shops’ true strength lies. The era of the fully digital in commerce has not yet arrived!
We’ve all heard someone badmouth online banks for the simple reason that on the Internet, we don’t have a real-life bank account manager to whom we can turn with questions. Well, the same principle applies to e-commerce! The importance factor is not as great I grant you: trusting your money to a bank and buying the latest collection of Tarantino’s best are not of the same scale.
The physical commerce’s real asset, its added advantage over online commerce, lies in the relationship the brand has with a customer and the advice it can proffer in a physical store. That’s where the Phygital concept fits in: gathering information in a store and buying online (we’ll address the opposite example in the next point).
The strength of physical commerce doesn’t stop there of course; in a boutique, you have a real buying experience. Everybody knows this and yet, it’s so obvious it’s too often neglected. And this is something the big retailers and e-merchants understand. For example, during Singles’ Day 2017 , Alibaba deployed an augmented reality application called “Catch the Cat”; the firm deployed pop-up stores and smart-stores throughout China to coax customers into their stores, to consume, and to discover their products onsite. The concept soberly called “New Retail” is the flip side of the Chinese giant’s intention to mix the physical with the online and to renew the buying experience.
A second conclusive example: Amazon. The number one e-merchant in the world took a major turn in June 2017 buying the Whole Foods chain of organic food stores. An investment coup for Jeff Bezos and a headache for Doug McMillon, the acquisition generated lots of talk but Amazon’s intention was clear: to develop its in-store food offering. Since then, Amazon has set-up for the long-term in the market and has multiplied the creation of offline services. Recently, Jeff Bezos’s company launched Amazon Go, a supermarket where you pick up only what you need and leave: a seamless and rapid buying experience where consumers waste no time and access their needs directly. The attractive and loyalty-building aspect? Optimized customer experience and the realization that Amazon uses artificial intelligence to make purchases without going to the sales register. These are the levers to pull to propel a boutique forward: a physical buying experience, use of digital technologies for a perfect buying pathway (AI, Blockchain, mobile payment), and technological strategies deployed so you interact with the brand and create loyalty (AR application, VR headsets, pop-up stores).
Take the same concept but switch it around and you get ROPO, or simply put, Research Online, Purchase Offline. With time, looking for an answer on the Internet has become a reflex for most people. “To google” has even become a verb found in the dictionary. The idea is simple: you look for a product reference on the net, you compare it to similar products, and quite often, you finalize the purchase directly in the store. The concept’s idea is to simplify the buying act and even avoid delivery lead times and possibly costs.
In light of this consumption trend, companies must move towards an omni-channel strategy to bring the consumer closer to the brand. Web-to-Store is one of the most advantageous solutions to implement an ROPO strategy. Combining the proximity of physical stores, and the choice/analysis of the online store represents the best means of development for a company that plays on proximity.
So yes, e-commerce will never completely replace traditional chain stores. But the world evolves and nobody can really know where all this will lead in 10, 20, or even 100 years. One thing that is certain is that things will continue to evolve further, and for the time being, the best way to stay visible in the market is to be present on the web! And that’s an area we know all about!