The retail apocalypse may finally be upon us. As the world grapples with the coronavirus, eCommerce executives have to deal with all the changes that have taken place (and those to come). Now, more than ever, eCommerce is changing from one day to the next.
In recent months, many people have lost their jobs and household liquidity has dropped exponentially. It is a reality that we cannot ignore. Fortunately, there are other “new realities” taking shape for eCommerce leaders. In this post we leave you three e-commerce strategies to consider to better face the uncertainty of the coronavirus.
# 1: Adopt a Marketplace Strategy
Marketplaces such as Amazon have been experiencing huge spikes in traffic and orders in recent months. Scores of people flocked to Amazon for essential products during lockdown and have already made recurring purchases on the platform a routine.
Retailers should consider accelerating any initiative to launch their own marketplaces during this crisis. That is, they should seriously consider testing a marketplace model in which they invite third parties to sell on their platform.
A well positioned brand in this is H&M. Within its catalog, it has a chain of low-cost stores, Afound, with a presence in northern European countries, implemented a marketplace strategy a few months ago. Now, at afound.com consumers can purchase the products sold by them and, at the same time, different items sold by other brands.
There are other retailers, only with an online presence, that are responding to the coronavirus by supporting smaller companies. Despite the anticipated decline in sales and profitability at the beginning of the lockdown, Zalando stepped up to help small businesses, with their physical stores closed during lockdown. Zalando allowed them to list their inventory for free on the web, without charging them sales commissions for 2 months. In this way, these offline retailers benefited from online sales and, surely, they were “captured” to continue selling in Zalando in the future.
For this and other reasons, another strategy is that smaller brands should consider partnering with large online retailers or marketplaces.
According to the report “Reimagining Commerce” carried out by the Episerver ecommerce platformWhen consumers have a specific purchase in mind, this is what happens:
- 43% of consumers go directly to Amazon or another marketplace.
- Another 43% of consumers visit Google first and search for the product.
- Only 10% of consumers go to a small eCommerce or directly to the brand’s website.
Another brand that has taken an innovative approach to marketplaces, and has changed the behavior of its consumers, is Heineken. This iconic brand started producing a new beer to sell online only, BeerWulf, without the Heineken image. This ecommerce allows you to buy BeerWulf and other craft beers to complement the offer. In addition, they sell Heineken household faucets and other dispensing systems. It is not a coincidence. It is a very smart decision for a brand, it has created a direct channel to the consumer, but at first glance, it seems that it was a marketplace alien to them. In this way, it does not interrupt other distribution channels.
In summary: If you are a medium to large company, consider launching your own marketplace model to compete with Amazon and better serve your customer. If you are a small business, consider listing on Amazon or other large online marketplaces. If you want to go further, follow in Heineken’s footsteps and launch your own direct-to-consumer channel. No matter where you look at it, you need a marketplace strategy.
All of these examples were implemented with the Episerver platform. In the peninsula, the only Episerver partner in Spain is Incenter.
# 2: eCommerce on the Fast Track
In this second strategy, ecommerce managers should also consider the possibility of accelerating online investments as soon as possible. Rather than launching into a large project, it is best to create very small pilots that help solve the customer experience and operational challenges caused by the coronavirus.
One example is investing in omnichannel. As offline traffic has been super reduced and inventory has remained in stores, we have to encourage consumers to make purchases online and thus obtain benefits for both: Companies will get rid of part of the inventory in the store and customers will be able to receive their orders faster, since they will be sent from a store close to their home. This is especially interesting for companies without a mature omnichannel technology. In this way, they benefit from the fact that their own store employees are also warehouse personnel, obsolete inventory moves faster and they do not need a logistics warehouse.
Retailers, large and small, including food and catering stores, need to innovate and do it now. Pick-up options on the street (click & drive) and delivery from the store are two strong candidates for omnichannel. The collection in the street allows us to buy online and come to pick it up, in case we live in an area where there is no home delivery. When you arrive at the supermarket parking lot, an employee will put the purchase in the trunk of your car. Some Spanish supermarkets such as Carrefour or Lupa have already been doing this for a few months.
In fact, it is very curious to see how it happened in some countries at the beginning of the pandemic: The government itself forced supermarkets to have an online click & drive sales and / or collection service in less than 1 month. And thanks to platforms like Episerver, they succeeded. Vision, clear communication and the will to cut internal bureaucracy as much as possible is needed.
# 3: prepare for permanent changes
This is clear: The coronavirus has changed the way we live and work. Will the offices become nostalgic relics? Will Home Schooling Be the Future? Those responsible for eCommerce need to prepare for the new expectations of consumers.
Many retailers and brands have already adapted to changes in customer behavior by offering free and faster shipping to incentivize online orders versus buying in physical stores.
During the pandemic there were also more payment facilities, price transparency and flexibility in general. This is a point that we should take as an advantage over the competition and continue to offer it to our customers once the pandemic ends (or when we finally reach a point of “new normal”).
Ultimately, this chaos can create opportunities, if we are willing to see it that way. Uncertainty brings out weak spots and encourages teams to work more creatively than ever. Challenges that were previously seen as obstacles will no longer be such. To apply all these changes, it will be interesting too know the types of ecommerce on the market and choose the one that best suits our needs, in case we want to make radical changes, such as migrating ecommerce software.
Necessity is the mother of invention and retailers and brands need to reinvent themselves, now.