Despite digital’s undisputable progress in every area of everyday life, including commerce, it’s undeniable that 90% of retail sales revenue in France is still generated at points of sale.
Many people reckon that e-commerce has overtaken traditional sales channels. Is this totally true, and who will emerge as the winner of this clash of the titans? Before going further, we should point out that e-commerce and physical distribution are not mutually exclusive: FNAC, Nike and AXA are perfect examples of brands that have adopted an omnichannel sales strategy. In other words, they offer their clients a unique experience, across all available channels, in a digital or real-world environment.
But it’s not so simple for a brand to be effective on two channels at the same time, and not everyone can afford it!
Advantages & disadvantages
Customer experience, an incomparable advantage for stores
E-commerce offers multiple competitive advantages but stills lags behind physical points of sale in terms of the customer experience it provides.
Stores offer a range of possibilities that e-commerce can’t compete with: asking questions, touching, trying, and comparing products, experiencing innovations such as augmented reality, video walls and other in-store technology.
Investment: more expensive for stores
With stores and e-commerce sites, we’re not looking at the same level of investment. When running a store, you have to pay procurement, rental, and electricity costs, etc. Retailers have to invest a lot in their human resources, too, as they have to pay both for staff and for the training that salespeople need to help customers.
In comparison, an e-commerce site requires minimal investment, particularly as a variety of technologies allows task automation and streamlining of staff numbers (chatbots, artificial intelligence, customer feedback, automated returns, etc.).
Quick and easy purchasing: advantage web
The advantage is clear: not queuing to pay, avoiding traffic and even bad weather. One-click purchasing is what e-commerce sites promise.
Dispatch times: advantage stores
An e-commerce site can’t compete with a store’s immediacy. To tackle this issue, online stores have to invest more in logistical solutions to speed up delivery, which sometimes takes days or even weeks.
Processing returns is also a very expensive business. 20% of online sales end up as returns. In some sectors like ready-to-wear, this figure can be as high as 30%!
Reach and targets: advantage e-commerce
As far as market reach is concerned, it’s not even close. Stores are more limited than sites, which are open 24 hours a day and process sales 365 days a year. E-commerce sites can also meet demand from local and international consumers.
This is one of the major strengths of e-commerce.
Personalised processing and trust: advantage stores
Most customers continue to be wary of the lack of human touch offered by e-commerce. Nothing can replace a one-on-one with a qualified salesperson who takes account of a customer’s expectations and offers them advice.
Trust is key when buying. Even with first-rate online customer service, there’s no beating the human touch.
Consumers prefer a hybrid path to purchase journey
Three main reasons push a consumer to buy online:
· Prices: usually better online
· Practicality: no travel required, no time spent waiting to try and buy
· Choice: with the possibility of consulting the entire catalogue quickly
On the contrary, there are some advantages of heading to a store:
· The chance to touch, feel and test the product
· Buying and exchanging it immediately
· Being able to get advice from a specialist and ask them questions
But along their path to purchase journey, consumers rarely worry about these aspects; the line between e-commerce and bricks-and-mortar points of sale is fading. They use both channels at different times and decide how they’re going to buy. This is known as the hybrid journey and offers the best of both worlds. Brands must work to give their customers or prospective customers the chance to choose.
ROPO (Research Online Purchase Offline)
This accounts for 80% of cases in France: the consumer researches online, gathers information, and compares products before heading to the store to buy the one they want. This demonstrates the importance of a brand being effectively visible on the web (SEA, SEO, social networks, etc.).
This accounts for 40% of cases in France and consists of going to a store to look at and try the product they want before buying it on the Internet.
ROCOPO (Research Online Check Offline Purchase Online)
This is a combination of the first two cases, and is France’s favourite way of buying. The prospective customer starts researching online, then heads to the store to try the product before buying it on the Internet to make the most of the lowest prices and any discounts.
THE CLIENT IS STILL KING!
In the digital era more than ever, customers have full control over their experience. They and they alone decide when, how, where and what.
A good strategy for a brand is to fully take this aspect into account and give their customers the option of using all the possible channels.
Stores still have great prospects but brands need to develop a seamless approach using complementary physical and digital channels to meet connected consumers’ expectations.
Consulting Manager, SQLI