Commerce in full transformation - Step 2 - Are retailers good e-merchants?
With a 14.1% share of the consumer market[1]e-commerce is one of the big winners in the health crisis. However, we are far from the rate seen in the United Kingdom (over 26%) or the United States (nearly 20%). Even if a slowdown seems to have been observed this year, the scope for growth in e-commerce in the coming years is perceptible.
For physical commerce, e-commerce is a competitor but increasingly an opportunity. This opportunity can be seen in several ways of approaching the digitalisation of commerce.
First of all, it is a question of providing the consumer with easier access to products. The health crisis has led to the use of click & collect or home delivery, which many consumers have discovered. The current energy crisis will be a new factor that will encourage consumers to reduce their travel. They will continue to consume, but perhaps differently.
E-commerce will also be a way of getting products to the consumer in a shorter time. For the company, it offers multiple opportunities in terms of marketing and knowledge of the customer and his expectations.
Click & collect: a winning model
Click & collect is the third most popular delivery/collection method for e-consumers, after home delivery and relay points. Its advantages are numerous. For the consumer, it represents a saving of time and the certainty of travelling without the risk of not finding the product they are looking for in the shop. For the retailer, it means optimising logistics costs by pooling deliveries. But above all, click & collect is an opportunity to bring customers into the store and to benefit from a re-purchase rate often higher than 15%. From an environmental point of view, click & collect means fewer deliveries and a pooling of e-commerce delivery and shop supplies. It is therefore not surprising that the brands are all seizing this opportunity. Fnac Darty's ambition is for click & collect to account for half of online sales by 2025[2].
Click & collect is available in several different offers. The use of shop stock makes it possible to offer a promise of very rapid availability. The professional brand Tereva offers click & collect in only 10 minutes! But to be effective, the point of sale must be organised with a no-waiting counter or automatic withdrawal lockers.
The use of warehouse stock has another advantage: it provides a wider catalogue of products than in the shop. Here too, the point of sale is the terminal link in a more extensive logistics chain. It is up to the point of sale to take advantage of the customer's visit to the shop to provide them with the best experience and to arouse their interest in purchasing additional products. The time, if it ever existed, when a retailer's e-commerce customer was a second-rate customer is long gone!
The locker connects in the city
Click & collect is inside the shop but is increasingly remote and robotic. This is the principle of the pedestrian drive developed by Auchan, which is attached to a local supermarket, but also of the new Delipop concept. These are automated multi-brand pedestrian drives. Some towns, such as Montbard, have set up connected lockers that allow consumers to order products from their shopkeepers and collect them from these lockers 24 hours a day[3]. A good solution to save time but also to continue to buy from their usual retailers.
Ship from store relies on proximity
Studies on the expectations of e-consumers show that they want to save time and prefer home delivery. But why have a product delivered from a warehouse hundreds of kilometres away when the desired product may be available in a retail outlet close to the consumer?
The answer to this question lies in a different organisation of stocks. First of all, the shops' stocks must be unified in order to know where the required product is, as close as possible to the consumer. The customer can order on the internet and be delivered from a shop which then acts as a warehouse. A product that is not in a shop can also be searched for in another shop of the brand and delivered to the consumer. The Courir chain, by unifying its stocks and allowing its sales staff to have access to the various stocks, has thus made it possible to widely deploy this solution. Ship from store already represents 18% of its digital sales.[4]
Reducing delivery times, but also distances and consequently the environmental impact, are the key arguments of a ship from store solution deployed by certain retailers such as Electro Depot, in partnership with Woop.[5]
The success of these click & collect or ship from store solutions depends on several factors, in particular
- A dense network of stores. The greater the number of shops, the more sense there is in local sales.
- A transformation of the retailer's profession. They must manage new customer expectations and new IT tools.
[1] Source FEVAD - 2021
[2] Source strategic plan 23-2-2021
[3] The public good 1-5-2022
[4] Source LSA 30-5-2022
Source Voxlog 20-1-2021