Ever since online shopping took over the mainstream consciousness of both retailers and customers, a very elementary yet crucial race has been going on – between e-commerce and traditional brick-and mortar stores – to see which performs better.
"The increase in online sales generated by traditional companies is a key contributor to the growth of sales in e-commerce"
A report by Bain and Co. and Google revealed that despite all the noise being made about online shopping and how it is taking over from traditional stores, the sales from it was still under 10 percent of overall retail sales in Southeast Asia in 2017. To be more exact, it was just 4 percent of the total retail sales in the region, amounting to just about $6 billion1.
But, Should we just go with the Numbers?
After having spent years in this field and having seen the retail space evolve in remarkable ways, I believe that the answer to this question is “no”. Let me explain why.
According to another report, by Mintel, e-commerce value in the Asia Pacific region will hit 37 percent of overall retail sales by 20252.This is a significant jump in numbers, one that cannot be ignored. It shows that online shopping is likely to continue to slowly, but surely inch its way up the numbers game. So, it’s time for retailers to get ready for a new reality where online sales could become a tough contender.
So, What is Driving E-Commerce Sales?
Interestingly, many traditional brick-and-mortar companies already understand that e-commerce holds promise and have made their way online. In fact, the increase in online sales generated by traditional companies is a key contributor to the growth of sales in e-commerce.
Instead of worrying about losing out on footfalls to online traffic, retailers are actually tapping into the promise of e-commerce with an online point of sale. The reasoning behind this is simple – your customers are already online. Why not give them a reason to shop with you when they are there?
Having an online store only opens the door to possibilities. To usher them in, brands need to understand their customers’ needs and cater to them by leveraging the right technology. Take for instance one of the biggest concerns shoppers have after they buy online or offline – accessing customer support. With AI-based chatbots that can be seamlessly integrated to online store, brands can offer on-demand customer support any-time, anywhere.
Chatbots can be designed to not just help customers quickly and effortlessly communicate with brands about the issues they face, but also to simplify their shopping experience. Think of the many customers who are in a hurry. Chatbots can provide the right product suggestions in a few simple steps, saving them time and effort. In turn, this could make the shopper a loyal customer who is more likely to return to your online store for the intuitive and fast experience he/she had.
And, Who is Reinventing the Traditional Retail Space?
One thing that I have understood from my conversations with other industry experts is that it’s not just brick-and-mortar companies that are making their way the online side of things. Online players are making their way to traditional retail too.
Two of the top online players in India that have entered the retail space are Urban Ladder and Lenskart. Urban Ladder, believed to have invested nearly $15 million in stores, expects to see its offline contributions to account for 2530 percent of overall business over 18 months3. And Lenksart intends to invest $4 million to launch more offline stores to feature one of its key brands, which it hopes will bring in $78.1 million by 20214.
Online companies are making bold investments like this because, they are confident that the unique and exclusive experiences they set out to offer with the help of new technology will help them make a place for themselves in an already competitive retail space. And it’s something traditional retailers now need to stay ahead of.
Most of the online retailers who have entered the traditional retail arena have a strong understanding of new technology and how best it can be applied in the retail WWWWscenario. They too are looking for ways to meet the customer where they are (in this case, at the store front), but with new and valuable experiences enabled by technology.
Take for instance, augmented reality. It allows customers to get comprehensive information on in-store items as they shop. Or, consider virtual reality, which gives customers the chance to enter a whole new virtual world where they can explore and experience products. Urban Ladder plans to use this technology to give customers the chance to customize home décor with their products.
On the other hand one of the largest retailers in India Reliance Digital is going the e-commerce way and have plans to increase online sales multifold in couple of years. So there is clear movement of online retailers moving towards opening stores and big offline retailers using online ecommerce platform to reach newer towns and customers.
Today cashless payments are also being made possible to allow shoppers to just pick up items and leave the store without stopping at the cashier. Within the retail space, there is much that technology can do. And it’s time brick-and-mortar stores too cashed in on this.
Technology – Leveling the Playing Field
Technology is there for the taking – for traditional companies to gain a share of the e-commerce world while they reinvent the brick-and-mortar store. It’s leveling the field for both retailers and consumers giving one the opportunity to create and offer unique possibilities and for the other to experience it all and look forward to more.
Check out: Top Retail Tech Companies