In recent years, various online retailers have opened physical stores and depots in cities. This trend emerged in November 2015, when Amazon began to take its first steps into the world of brick-and-mortar retail by opening a physical store. The opening of this bookstore in Seattle has been an important step in the direction of omni-channel for the online retailer and has sharpened others in the sector.
This development does not mean that ecommerce is being replaced by offline retail, but that the line between online and offline is becoming blurred. Although consumers might have a preference between online and offline shopping, there are very few people who exclusively make purchases in an online store or physical store. The future of the industry is therefore not black or white, but a synergy of online and offline. It provides the consumer with a seamless and consistent buying experience on all channels. In a few years, there will therefore no longer be talk about online shopping and offline shopping, but simply about ‘shopping’.
The future of the retail is not black or white, but a synergy of online and offline
Two trends: sourcing from store and selling in store On the one hand, there are more and more market places, such as Farfetch, Not on the High Street, Wish and Zalando, that source products from physical stores. The advantage for the marketplace is that they limit or eliminate the stock management responsibility and on the other hand they enable fast delivery. The advantage for the brick-and-mortar store is the opportunity to sell products to a global audience.
On the other hand, pure online players open physical stores in cities. An example of a pure player that does this is Amazon. After Amazon opened its first physical bookstore it has expanded across the USA. Not much later, it acquired Whole Foods, giving Amazon a whopping 460 stores in the USA, Canada and Great Britain, followed by the opening of the cashierless grocery store: Amazon Go. Other pure players, such as Coolblue, Casper, Spartoo, Glossier, AliExpress and Allbirds, soon followed the example of Amazon.
Why do online retailers go offline?
There are various reasons why online retailers are increasingly opening a physical store. 1. Reach out to the offline consumer Offline shopping is still more popular than online shopping. More than 80% of all retail sales takes place in physical stores. It is therefore a missed opportunity for online retailers to ignore the offline buyer. Investing in physical stores makes perfect sense to grow market share.
2. Providing extra elements A disadvantage of ecommerce is that the consumer cannot touch the product, see it in real life or try it out. Physical stores do offer these elements. Seeing the product with their own eyes and being able to touch the product can dispel the consumer’s doubts. The store then not only serves as a sales or click-and-collect point, but also as a showroom. With the store, the retailer can leave a good impression and stand out from the competition.
3. Fast delivery
The internet is boundless and restrictions for the consumer are being limited. The range of products and services nowadays is larger than ever, the result being that consumers have become more demanding. This mainly applies to the delivery speed and delivery options. When products are shipped from a store in geographic proximity to the consumer, it is possible to deliver products quickly, often the same day. In addition, the proximity of the retailer to the consumer also ensures the possibility of collecting products in the store.
We at StoreShippers foresee that the success of retailers depends on the combination of global online exposure and offline local presence.