Points of sale: the new battleground for e-tailers

In January 2018, the e-commerce giant Amazon launched Amazon Go, its very first supermarket, entirely automated. The concept was a real hit in Seattle: one month after the first store opened, the brand already had a plan to open six more stores and to expand its presence in the U.S. This new hybrid retail model marks a turning point in an industry undergoing a far-reaching change. Physical stores are already using the web to boost their sales; now pure-play e-tailers are diversifying by playing the local card — a wake-up to the e-commerce market that online alone is no longer enough.

 

Financial stakes

In 2017, e-commerce, boosted by social selling, took 81 billion euros away from bricks and mortar retail outlets. Online business remains buoyant, thanks to evolving technologies that make buying easier and give an edge to new modes of consumption like m-commerce. But e-commerce remains relatively minor: according to one survey1, though e-commerce is expected to grow by 8% a year from now till 2025, it will still represent only about 10% of household consumption. For pure-play online businesses, retail outlets thus represent an indispensable leverage to solidify their market positions and develop both their brand awareness and their sales.

Phygital support for retail sales

The retail sector is today at a crossroads. On the one hand, innovative technologies are rushing into the sector; on the other hand, sales-related positions have been devalued. When the Internet lets clients potentially know more about products than the salespersons themselves, it becomes necessary, even urgent, to transform the buying process itself. Points of sale can adopt a phygital model that draws upon both salespersons’ advices and digital resources. Pure-play e-businesses, on the contrary, must achieve greater proximity with customers in order to reassure, attract and convince them better. In fact, 57% of the French, including 70% of those aged 18 to 24, would like to see e-tailers like Amazon, VentePrivée or AMPM La Redoute open physical stores.2

Thus, technology will not simply be a gadget in the future of the retail industry. It will actually empower salespersons, bringing new interest to that profession and thereby making consumers desirous of having an in-store experience that online purchasing will likely never be able to offer.

 

The user experience is undoubtedly the pressing need of the moment for pure-play e-tailers in the midst of radical transformation. Turning the act of buying into an experience and supporting the customer from pre-purchase advice to post-purchase service is needed, and a matter of survival. To that end, brands must combine digital marketing and phygital data analytics in order to connect online and offline experiences. To differentiate themselves, brands must deliver a seamless customer journey. Tomorrow’s hybrid business, which will combine technology with human interaction, is thus gradually taking shape.

 

 

1 Survey carried out by Xerfi in 2016

2 Survey carried out by OpinionWay for the Paris Retail Week in 2017

 

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