Regarding eCommerce, and its new impact on current times due to covid-19, there have been countless posts for months now.
There is no longer a space on the Web that does not talk about the topic.
We, too, have been doing this as an interested party, we are in that group and we want to bring our contribution in this 21st century gold rush, according to our point of view.
Obviously, there are companies that are reviewing their plans and, the industry in particular, is seriously affected by the pandemic while, for distribution operators, the scenarios are clearly different.
While, those who produce generally have a direct or indirect sales organization, those who sell (i.e., small or large distribution chains and retailers for various sectors) must necessarily come to terms with certain aspects:
These points were not put in order of importance but according to such a “mental sequence.”
it is clear that eCommerce, has been undergoing continuous growth for years now (point 1 – eCommerce and progressive acceleration over the years) but now with the addition of the covid-19 issue all those who can have a virtual storefront certainly benefit immediately and manifold (point 2 – eCommerce and the impact of covid-19) and, for what the numbers give to see, those who buy online today will tend to remain loyal customers for the foreseeable future as well (point 3 – eCommerce and customer loyalty).
This means that it is really time to get a move on and invest in digital but, at this point a further question arises… that is, do I invest in my own eCommerce or in a store with a third party? (item number 4).
Having unraveled this doubt we come to the conclusion in each case that eCommerce and internal organization are in any case factors to be kept well in mind in our strategy (point 5 – eCommerce and internal organization) and then we have to reckon with our store(s) (point 6 – eCommerce and traditional selling) as well as the advertising investments that are needed to run the system (point 7 – eCommerce and advertising investments)
A tad long, but on the other hand, this is the logical thread to which we need to add careful analysis to understand how to set up our strategy.
Let’s look at it point by point.
Section being updated…
This was definitely a year that will be remembered for so many things, including the impacts of covid-19 on the eCommerce world, such and such was the acceleration that took place but do we want to take a closer look at what happened?
Demand for eCommerce has exploded although not equally in all countries; in the next cross-section, we can see the differences between the United Kingdom and the United States of America, two of the most important and evolved markets especially in the eCommerce world.
Here are the results: as you can see from the extended graph, the increase starting from the original stage (called precisely origin) was very important in the U.K., while in the U.S., accomplice to the milder disease protection method, eCommerce still made important leaps forward but, as we know, in Europe and particularly in the U.K. there were a lot of initial problems.
And indeed we see how the demand that in the U.S. comes to double, in the U.K. almost quintuples.
As we can see from the data, after the initial explosion, the numbers have settled down.
Of course, the settling brings a +72% sign in the US and +145% in the UK.
This is to signify that, eCommerce, is on its way to a minimum double-digit growth to triple digits and then still settling down to lower numbers but in any case extremely more important than those represented by previous growths.
Message sent to all those who have a business and who have not yet thought about the impact that, eCommerce itself will have with their numbers over time and how, share erosion, will change future arrangements.
Those who approach an eCommerce, if satisfied, generally do not change unless they find innovative services, increased usability or other added value available.
Not quite the same as with a traditional store, therefore, you definitely need to enter this market.
Certainly and over time then, what happens today with traditional stores or chains will happen with eCommerce–competition will drive supply to diversify purchases at e-shops as it does today with physical stores.
One thing is certain.
The first week, to understand when the index is measured in 100, was before the lockdown while, in the following twenty-ninth week, from 31/08 to 06/09, we are largely out of the restrictive measures and with the situation partially restored as before.
Well, even in this supposedly normal situation, the eCommerce world continues to develop 2.5 times pre-covid sales in the UK while 1.7 times in the US.
All turnover that is consolidated, purchases that become habits, services that capture the consumer, and this, leads us to think that previous habits (making purchases at stores) are easily replaced by new ones (purchasing through eCommerce).
Obviously, the superkets world is the one that has benefited most from this sudden and uncalculable acceleration, however, except for the tourism sector, which has lost and continues to lose in double digits for obvious reasons, the entire eCommerce world is repositioning itself toward turnovers that will consolidate, and reach figures that would have been reached in a few years.
The next table will explain these words better.
As we can see from the table, there are sectors that have lost decidedly large shares of turnover.
Beyond the tourism sector where the highest losses were recorded, so many other economic sectors, beyond eCommerce, suffered losses caused by the new scenario practically imposed by the pandemic.
In the medium term, things will stabilize but, from an eCommerce perspective, there will be some new habits that are now established and nothing will be the same as before.
The world of eCommerce has definitely changed and over the years has seen a myriad of players entering this market, but only a few of them, have achieved major milestones.
This simple consideration alone should lead us to think about how, in terms of loyalty, these two large eCommerce marketplaces now have such a high dominance that we identify them with the service itself.
In fact, today when people think of eCommerce they think of Amazon.
Amazon that even replaces Google as the search engine; in fact now when we are looking for a household tool, any item, even just to get DIY ideas, we go to Amazon.
That was what used to be done with Google.
This is a prime example of important customer loyalty; they have created such an important and vast assortment of products of all kinds, thanks to those who sell on their portal, that one goes to Amazon to look for anything.
If I find it (9 times out of 10 this is the case) I also buy and then I don’t even waste time researching on other portals.
In terms of customer retention we cover the topic in our section RETENTION 2.0 which you can read at your leisure organized as it is in chapters and videos.
A key game is played here; in our view, one of the cornerstones of our strategy.
That’s right because consider that there are now some landmarks in the eCommerce world that will be IMPOSSIBLE to scratch at least in the short and medium term…
Then we have all the specialized Electronics and DIY portals with their good eCommerce:
Then many others.
All of these are sites that have invested heavily in online advertising and therefore have particularly well-followed eCommerce stores that no longer need to be so over-sponsored as a brand but now play best on news, new arrivals, promotions, etc.
In all this we have to think about building our e-store therefore we are faced with a dilemma:
Looking at the big eCommerce giants, we can’t help but be scared of them, but if we think about it for just a moment about what would happen if we did nothing, the answer is simple:
In some contexts small-scale retail has now been wiped out, but slowly the “problem” is spreading to other sectors.
Today we no longer find home appliance stores or specialty stores selling PCs, printers, etc., but if we think about it until a few years ago there was a plethora of small stores and small chains.
But nothing! “The evolution of the species” first shut down small stores, then small chains, and now?
Now stores have become showrooms, partly because so many times it is easier to buy online than at the point of sale; first because they cannot stock something of everything (and already this cuts into the legs), second and not least, because the 360-degree organization of work somehow favors online sales at the expense of physical sales.
We could give other examples but we would only repeat ourselves with different products, as the topics are almost all along the same lines.
Here, in our opinion, it is essential (if you are dealing with selling to the public) to come to terms with digitizing your store or chain by implanting an online store.
In our opinion, unless one has a really small business, it is neither appropriate to sell through Amazon, nor even to take advantage of the stores made available by Facebook and companions since, in any case, having to make efforts and investments, it is better to make them (even gradually) for something of one’s own.
When we can, we learn from the big ones: Birkenstock, Nike, Ikea are just a few of the names that have given up the most popular online e-commerce store to strategize about their means.
Still recent news that BOSE, one of the best-known and most popular companies distributing high-end hi-fi products, closes all its outlets (119 to be exact) in the U.S., Europe, Australia and Japan.
Only physical stores in China, India, South Korea, UAE and Southeast Asia will remain open. Reason for the choice?
TODAY CONSUMERS PREDICT BUYING ONLINE therefore even a top company like this one makes such a strong strategic decision to close all its physical stores and move to online only; and this must leave us thinking very deeply, and here are the reasons explained directly by the company:
Originally, our retail outlets offered the opportunity to try out and talk to us about our multi-component, CD- and DVD-based entertainment systems, explained Colette Burke, vice president of Global Sales, Bose Corporation. Right around that time, in 1993, the company opened its first store in the United States.
It was a radical idea at the time, but we focused on what our customers needed and where they needed it, and we are doing the same thing now, the expert continues, adding how difficult it was to make a decision that will negatively impact the team of professionals working in the company’s stores.
This is obviously a radical and strategic choice, taken, moreover, in an industry like hi-fi that has been mowed down not only by online in general, but also by the proliferation of low-cost market offerings that are now all the rage online.
We know, however, that it is not only the high-fidelity sector that takes these hits from online marketplaces, but many others as well; Zalando can afford to ship its clothes to your home and give you a long time (100 days) to be able to return what you don’t like or doesn’t fit perfectly, and we are talking about clothing here.
Let us first look at the sectors that, as yet, have not been so violently affected by the tsunami represented by the online market: FOOD, HOUSEHOLD, PHARMACEUTICAL and to a lesser extent, FOOTWEAR and SPORTS ITEMS, with the understanding that there are no sectors unaffected by the online phenomenon and so what?
If we have a store, especially in those contexts that are still beneficiaries of the high physiological barriers to entry given by the peculiarities of the sectors themselves, we must immediately think about transferring our business ALSO online.
We need to rationalize our stock and plan to have the highest possible assortment, work as we have hubs in the case of belonging to a chain of stores, offer the highest assortment to our customers by giving the possibility of technical return at one of the stores or, the store only, while simultaneously offering the necessary assistance; give the widest possible value-added services by making them perceive all the advantage of buying online associated with the highest rate of assistance – advice – availability of the relationship with “your retailer.”
In short, a virtual showroom and a natural one to be able to let people touch the products but giving all the related benefits and conveniences of online.
An analysis cited by the very ANSA carried out by Cortilia on a panel of 4,200 supermarket customers, states that more than 66 percent of users have changed the way they do their household shopping.
Let us consider as an additional factor that this pandemic-induced state of affairs, are destined to last for a much longer period than expected, therefore, doing the math that for a couple of years we will be dragging on (at least as a long wave) the effects of covid-19, the whole world of electronic commerce is destined not only to grow but also to consolidate in a much shorter period than previously assumed.
So let’s see how, abruptly due to necessity, the world of e-commerce rises by capturing slices of the market that are unlikely to return to the previously customary pre-covid styles.
Every year we have cited in our eCommerce statistics in Italy the double-digit growths that the online shopping world was experiencing, but the acceleration that can be measured today is unparalleled.
Here is the main reason in this as in other areas to prioritize your own eCommerce strategy to avoid having to run for cover when it is too late.
When the world goes through phases of change, in many respects radical, the organization of work turns out to be an absolutely essential element; eCommerce does not escape this need.
Thinking about setting up an online store, whether it is for groceries or other products, means rethinking everything as if it were a new business that will share very little with the traditional one.
Certainly so many businesses are already technically ready or nearly ready as they are already well structured due to the work done over time, but in any case there are so many variables to take into consideration.
Certainly those who have all items coded with their EAN CODE have already structured, or can do so relatively quickly, a complete database of all the data they need.
In any case, let’s cut the nonsense; organization is needed:
In short, setting up an eCommerce store means opening a new store that travels hand in hand with the traditional store but with absolutely different management and different organizations.
When we talk about eCommerce we are in any case talking about an online sales system, and therefore we must also equate to this the pizzeria that allows you to place an order for the evening as the store that allows you to have your groceries prepared and then go to pick them up at a certain time, etc.
All of this involves a different organization of work than that carried out by the traditional.
If I have a grocery store or even a superette and therefore the number of people working in it is limited, I will not only have to take care of the customers who physically come to the establishment to shop but I will have to think that if I have a lot of requests for home delivery I will have to reconcile serving customers at the physical point of sale and the preparations that where to have them ready at certain times, at the same time I will have to prepare the products for those who request home service…
When demands start to become important (think of large stores) then the organization of storage spaces (cold or otherwise) and the labeling and recognition systems that prevent mistakes from being made between customers also has its importance.
That is why we cannot think that it is enough to have an eCommerce implemented and then have the whole world at our feet without any additional effort.
Inescapable for any business are marketing investments, and eCommerce obviously does not escape this rule; in fact, it must be completely in tune with it.
It turns out to be obvious that compared to the big portals or marketplaces we will always be losers in terms of money available, but the effort must be complied with in any case since having a beautiful store that nobody knows about is equivalent to not having it.
That is why within the dedicated budgets there must be deniers for the entire marketing structure, which must then be shaped, depending on the business and depending on the products it sells, its/their peculiarities, etc.
Putting together an effective and winning advertising strategy is a really difficult but not impossible combination for anyone.
Advertising and marketing are two separate and distinct things in that while it is true that advertising is a small part of marketing, the reverse is by no means true … namely, that to do marketing you need to advertise.
There is also to consider that, contrary to a time in which state television was enough, all private TV, digital and now the whole mechanism (that of TV and radio) has completely changed from yesterday.
Today certainly more and more investments are moving to online and in fact, although the data below and taken from NIELSEN via Primaonline are marked by the negative that pandemic from covid-19, we can see that in the progressive, advertising through digital channels, recorded the least negative in progress (-9.2%) compared to -40% for periodicals, -17.5 for TV, -49.5% for outdoor, etc.
For more information about the world of statistics, we recommend reading our article eCommerce statistics 2019 to better delve into all the info you need.
Here’s where thinking in terms of advertising investment is an indispensable basis since you cannot just provide for paper flyers but now have to build your way into digital.
We are at your disposal, even for this.
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