In April, the ONS data for internet sales as a percentage of total retail sales showed that online fell below 30% for the first time since October, and in May it dropped further to 27%. Already, questions are being asked about the future of ecommerce. Is the drop but a minor, predictable, blip? Or is it evidence that bricks and mortar will once again be the dominant channel?
As is so often the case with complex issues, the truth lies somewhere in between these two points of view.
It is clear to see that shopping habits have fundamentally changed over the last year, and they will only continue to shift as time and technology advance. Simply having a physical presence will become a progressively less tenable position. The future of retail is omnichannel: physical locations, hand in hand with a strong online platform. In short, the future of ecommerce and the future of the high street are interlinked – a symbiotic relationship in which both will prosper.
Too many retailers are still not grasping this concept. In fact, the trend is for retailers to select one channel at the expense of another. Only a few weeks ago Gap announced that it plans to close all its stores and move online only, making it the latest in a long line of retail firms who clearly see physical stores as an unnecessary expense. It also emphasises the current state of the relationship between ecommerce and the high street: they are seen as competitors.
The ongoing changes in shopping habits, however, dispel this view and show that a more integrated relationship is the way to go. It is great to see that retailers are getting ever better at providing customers with faster, cheaper, easier service. It was not long ago that the only place to buy a product was a shop, while ordering via a catalogue could take a long time. Now orders can be placed online and delivered to your door in mere hours, sometimes minutes. Customers have relished this freedom: now they can browse in store and order later online to be delivered to their door, they can even order online and collect in store when they do other shopping. But the freedom to do this requires more than just an online or just a physical presence – it requires both.
An omnichannel approach is not only the best for the customer, but it is also the more beneficial for a retailer. For the customer, they experience a seamless, easy way of purchasing products, either in store or online, and can have the products delivered to them or picked up in store via click-and-collect, allowing them the freedom to make the purchase work for them. Equally, if the customer wants to return an item, in store returns are often easier than via mail.
From the retailers’ point of view, the opportunities for sales are maximised. Stores are wholly reliant on their opening hours, as well as being very geographically limited in terms of potential customers. Online sales are 24 hours a day, seven days a week, and can be worldwide in their customer base. When put together, though, they unlock new opportunities. High street stores can be used as showrooms to allow customers to test and try products that they may not be comfortable purchasing otherwise. For example, customers may want to see a TV set, test the picture, and see its size with their own eyes, even if they later purchase it online to be delivered to their homes. Even returns are opportunities. Customers that may only have experienced the online side of a retailer could go into a store to return an item. This means they will be in and amongst the products to peruse or even purchase.
Another key feature of a successful omnichannel approach is range expansion. Thanks to the likes of Amazon, customers are used to a one stop shop for all their needs. One way retailers can compete online is by extending their product ranges through using a mechanism called dropship. Dropship enables products to be shipped directly from the supplier to the customer, which means retailers avoid the risks and high costs of storing inventory. Although sometimes seen as an intimidatingly new concept, there are many solutions available to companies who would like help building up a successful and efficient dropship platform in order to offer customers the most relevant and comprehensive ranges. Dropship allows retailers to “futureproof” themselves by offering the extended ranges that will become ever more necessary.
The future is customer focussed. No longer can retailers expect the customer to do all the work for them: come to their stores, obey their business hours, and carry their own purchases home (no matter how large or heavy). Retailers will now be expected to do all they can to make their customers’ lives easy, and those that offer an omnichannel approach, with the extended ranges that dropship can offer, are bound to enjoy the fruits of this new world.
Ed Bradley, Founder of Virtualstock