March 30, 2020
Why is ecommerce winning against retail?

Why is ecommerce winning against retail?

Hi everyone
This is Riccardo Osti and I help world best brands improve their consumer
experience. Today’s video is quite different, as it is about the competition
between online and offline. It’s under everyone’s eyes the e-commerce is winning
the battle against retail, at least in consumer electronics, fashion, cosmetics
and other key verticals. Don’t get me wrong… more than 90% of total sales are
still made offline but if we look at categories categories historically with low margins,
like consumer electronics, this competition is already going towards a
precise direction, where e-commerce will take the lead. When we say e-commerce it
still sounds like something new, however, we should keep in mind at companies like
Amazon or Ebay were founded almost 25 years ago, 3 years before Google…! And
therefore ecommerce is not that new. Ok but, why is ecommerce leading retail in
certain categories? I would define the key reasons being: Price… products online
are almost always lower than what we can conveniently find in our geographical
area. E-commerce companies run on lower costs compared to retail, and this is for
sure reflected on the final price, it becomes very attractive for us, the
customers. Number 2: Availability. It is not possible for classic retail to have
the stock that you can find on Amazon. If you’re looking for something specific, or
something hard to find in your region, then you most likely find it online.
Number 3: time-saving. Most of the people that are shopping online are trading
immediate gratification of guessing the product straight in their hands, for time
and price savings. You can look at the success of Amazon Prime for example, or
here in the Netherlands, to companies like Coolblue, that offers 2- hours delivery. You can basically order during your lunch break and have things
delivered to your office in the afternoon, going home with your purchase.
Next one, is Product Reviews. This is probably why the most important reason
why we shop online. Is there any retail store where you can
ask hundreds or thousands of customers about their experience with a
product? Obviously not… but at the same time you can easily read reviews online
right next to the buy button. Reviews have become the most important driver
for purchase both for online and offline, in fact many offline buyers
reviews online before going to the physical store. So… how can classic retail
compete with e-commerce? It’s all about the experience, the sensations, the
emotions of buying offline. Brands that invest in the in-store experience will
be able to compete, and in certain categories, will continue to win against
online. Unfortunately, the majority of traditional retailers doesn’t seem to
care much about this. A few days ago I went to Mediamarkt, here in Amsterdam,
just to buy smartphone. I had to wait 20 minutes before someone was able to help
me out. The salespeople seemed almost bothered to see
customers entering the store, as this was more work for them. Last week I was in
Italy and I entered media world to purchase a Chromecast Audio. After asking 3 people that didn’t know about the existence of this product, I finally
found the expert who told me that it has been discontinued by Google, and
therefore they didn’t have it. This is obviously not the case as this device is
currently sold everywhere, but Mediaword So, my question is… how can retail
compete against e-commerce if traditional stores cannot even provide customers
with the basics, such as: don’t keep me waiting,
smile and don’t lie? Offering a great in-store experience is essential for
retailers to survive. Customers will still go and buy offline
if they would find attentive service, honest and expert advice, and warm human
interaction. If you think about that, you will realize that retail is not suffering
the competition of e-commerce because of price, or at
least, not mostly because of that… but essentially because retailers are
missing out on the good customer experience. Let me what you think, write
in the comments below, subscribe to my channel, see you next time!

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