written by
Kyle Widrick
Kyle Widrick
Global Trends
2017-01-25

An American’s perspective on the ever-changing world of online vs offline commerce

An American’s perspective on the ever-changing world of online vs offline commerce

Offline versus online commerce is a debate that rages today in the business world. Offline retailers argue that their business is still relevant (and growing) while ecommerce contenders claim that the old world of high-street retailers and foot traffic is a thing of the past. But who is right? Will online outstrip offline, or can the two coexist happily, each offering a complimentary experience? Let’s dive into some recent key trends on this topic:

It has never been easier to launch a brand online

The simplicity of launching a brand online is an irreversible trend. Platforms like Shopify have pioneered a new age of commoditization in the ecommerce world that allows entrepreneurs to create an online storefront and be shipping products in a matter of days/weeks. Learning the basics of how to launch a simple website on platforms like Shopify is helpful for most working in ecommerce today. For an entrepreneur this may be a path toward a successful business, for competing brands and brand managers this is a look at what is likely to continue to be up and coming competition.

 

Offline don’t ignore online

Both online and offline retailers agree that walking into a physical store is still a key part of the customer journey. But it is the harmony of the two elements which is crucial to offline retail’s evolution. A good example of this is Facebook’s launch of tracked ads for Facebook stores, allowing advertisers to map their physical store location. When a user who clicks on the ad visits the bricks-and-mortar store, Facebook will be able to tell using phone location services. This data will be made available to advertisers – allowing them to connect the dots between online advertising and offline purchasing. Technologies like iBeacons allow for digital interaction with customers in-store, offering them discounts depending on which products they’re looking at. Digital POS systems can now provide retailers with the customer data that eCommerce businesses have exclusively enjoyed for so long.

 

Online don’t ignore offline

Online retailers are also starting to recognize the benefits of joining forces. Take cues from Alibaba’s recent bid to take private a leading Chinese mall retailer, Intime Retail. The move will integrate the vast Alibaba ecommerce assets and ecosystem with the brick and mortar locations & improve this offline shopping experience by offering customers perks like the option to pay electronically at the cash registers, have items paid for in the store and shipped to your home & even set up Pokeman Go augmented reality events to drive awareness and foot traffic.

 

Contraction of retail locations to stay agile and keep up with consumer interests

Legacy retailers and brands are starting to close down ‘excess’ locations and streamline focus on customer loyalty and connection. Watching legacy US retailers such as Macy’s planning to close now 100 retail stores, shows the inevitable slide and contraction of too many physical locations. L’Oreal is a good example of a legacy player that is working hard to focus on ecommerce as a priority, and invest in smaller more innovative companies in a bid to stay agile and keep up with consumer interests.

 

Online supporting emergence of niche brands

It is becoming apparent that smaller, niche brands are starting to chip away at the market share of global household names such as Pampers, Kelloggs and Gilette. Niche brands are quick to harness the combination of new technologies and non-traditional advertising and sales channels to deliver cheap and relatively fast go-to-market strategies. Niche brands are more agile and are quicker to tap into market trends.

A good example of this is the launch of the incredibly successful Dollar Shave Club, a subscription based online service for razor blades. Gillette addressed this with the launch of their own Gillette Shave Club. While this niche brand didn’t pose a real threat to Gillette’s 70 percent share of the global blades and razors market, this challenger brand did force Gillette to rethink their strategy. 

 

The CMO’s job is certainly getting tougher. Information today is moving faster and across more platforms than ever before. Having a keen understanding of current and future best-in-class tech enablement platforms and how to best target your customers, whether online, offline or both, is a critical component of continued success.

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