In many ways, e-commerce is still in its infancy. It’s been just over 15 years since global forces like Amazon and eBay were founded. In most countries, e-commerce still represents less than 10% of all retail. And many brick-and-mortar retailers are still debating whether e-commerce is a friend or foe.
Most “traditional” e-commerce models have been based on the idea of substitution—that people would substitute their typical trips to the store with a purely digital trip that culminated in a delivery right to their doorstep. Just a few years ago, it wasn’t uncommon to see retailers experiment with fully virtual stores in Second Life.
And yet today we see a very clear shift in investment and innovation from “traditional” e-commerce models based on digital-for-physical substitution to new technologies and business models that are very consciously aimed at integrating digital technologies with the physical environment.
- Retailers like Walmart, Tesco, Best Buy, Metro Group, and Home Depot are focusing executives and initiatives entirely on ways to use digital technologies to drive people into stores.
- Well-respected investors like Ron Conway are placing big bets on it.
- Leading analysts are throwing conferences with titles like “Stores in a Digital World.”
So what’s driving the big shift?
- Traditional e-commerce business models aren’t a fit for every shopper, category, or need-state
- Mobile connects shoppers on the go and in the store in powerful new ways
- Global retailers have massive legacy store bases and a mandate to maximize their productivity
These are among the reasons why RNG expects that the transition over the next decade from purely analog shopping experiences to digitally-influenced shopping experiences will have a greater impact on the status quo than purely digital shopping. Here’s a video excerpted from one of RNG’s conferences with more detail:
Digital Influence: Path to Purchase from Courtney Purchon on Vimeo.
So what will this connected shopping experience look like? Here are a few of the key elements we study closely:
- Local inventory transparency & buy online pick-up in-store (BOPIS) models
- List building and management tools
- Real-time, dynamic offers and messaging
- In-store interactive merchandising
- Social shopping
- Digital/mobile payments
- Point-of-experience feedback loops
You’ll hear much more from us about connected stores, and more importantly what they mean to retailers and brands.
Retailnetgroup.com subscribers will find more insight in E-Ready Stores: How the Store Must Evolve.
One of the key points that brick-and-mortar retailers with e-commerce presences should be sure to focus on is having equal experiences online and off. I have had poor experiences with some retailers that treat the online and offline stores as completely separate entities, with separate pricing and inventories, and no way to work together. What makes this kind of experience even more painful is that once you have the product in hand, you can return it to the store regardless of the place of purchase.
I am immediately less likely to shop with that particular retailer, as I have to make a trip to the store, find the clothing I like (and try it on), then deal with multiple points to purchase them, where shipping may or may not be free depending on how much I purchase online, and whether or not they have the product in stock online even though stores have them.
I understand business reasons for having separation of concerns, but when it directly impacts the end user/shopper with a poor experience, they have failed in creating the kind of shopping experience people will want to return to and recommend to their friends.
Many are headed in that direction because they know they’ll lose the sale (or the shopper!) if they don’t. But there’s a lot of hard work to align outdated org structures & incentives with customer-friendly pricing, shipping, and return policies.
Also a big no-no: Don’t punish your repeat, high-spend customers – http://abclocal.go.com/kgo/story?section=news/7_on_your_side&id=8290087