Impact of eCommerce on Traditional Retailing

ECommerce was a disruption in retailing. But the traditional brick-and-mortar is such a behemoth that the disruptions created by eCommerce could not have kept it rattled for too long. Traditional brick-and-mortar retailing has begun to make a comeback on stronger terms. Thanks to eCommerce. Traditional retailers are now clubbing the best of both worlds to present a stronger channel strategy. We can call it an omnichannel or multichannel or O2O strategy. However, the focus of this blog is on how online retailing is reshaping traditional retailing. A few major areas of impact are discussed ahead in this blog.

Home Delivery in Traditional Retailing

The introduction of home delivery services is one of the most easily-observed consequences of eCommerce on traditional retailing. Home delivery proved to be a winning mantra for eCommerce. It was a replicable feature and many retail brands and businesses took advantage of this. Today, it is common to see grocery stores, supermarkets, apparel stores, electrical and electronics stores, and many traditionally-offline retail formats offering home delivery services. At least a decade back, customers could not even imagine ‘home delivery’ services becoming a routine retail standard. And this was because of the impact of eCommerce.

Pricing to counter eCommerce

Offline retailers know very well that customers do compare offline and online prices. Even a small difference could make them lose customers to online or offline competitors. Today, retailers are able to exert pressure back to distributors and manufacturers to provide them with more margin space. This has compelled many manufacturers to regulate the prices of their products across various online platforms. The end result is that the online and offline prices of well-known products have negligible differences. Customers have benefitted from this because the offline prices have come down to match online prices.

Big Spaces, Extensive Merchandising

Offline retailing always had the advantage of wooing customers with the physical aspects of shopping. But that was limited only to a few big brands and businesses. Not every retailer thought of having a big store with massive spaces and extensive merchandising. As experienced retail and eCommerce consultants, YRC maintains that eCommerce changed this perspective for many offline retailers. Offline businesses began to realise that one way to win customers back from their online shopping options is to get them back to the stores. Today, more and more retailers are coming up with big formats. For example, grocery stores are getting replaced by supermarkets and dark stores.

More emphasis on Customer Experience and Customer Retention

Sometimes it is a pity to see some retail brands and businesses representing themselves poorly to customers. Hands down on any given day, a customer will choose to be loyal to a brand that ‘tries’ over one riding on high horses. Today, smart business people are aware of the significance of customer experience and customer retention efforts. But was it because of eCommerce? ECommerce was one of the reasons for many businesses. It came and treated customers differently. This was an appealing approach. Businesses that adopted this approach did well. But we must say that realising the importance of customer experience and their shopping journey need not take something external.

Digital Marketing

While digital marketing was considered a requirement confined only to eCommerce, it was soon realised by retail companies that the benefits of digital marketing are also available for offline channels. The need for digital marketing also arose as brands and businesses started going multi-channel. Thus, digital marketing became the new frontier of advertising and promotion. Sometimes it is startling to see how traditional formats like print media and billboards have taken a back seat. While the world may have spent some time with digital marketing, it is early to say that we no longer need traditional advertising formats.??

Focus on Strengthening Operations (Retail SOP Manuals)

ECommerce showed us that an order can be delivered within an hour. This simple-looking statement has so many deeper connotations. We are referring to unmistakable operational speed and precision. Ecommerce may have started with delivery within days. But as hybrid business models like dark stores emerged, the delivery processes made some major evolutionary leaps. The lesson that was to be learned from eCommerce was that the value chain operations could be improved to such levels where the business operations moved like a bullet train. Two big forces behind this are SOPs and automation.

Professional Assistance from Retail Consulting Experts

It was not a long time ago that small and medium retail businesses were hardly seen availing professional assistance from retail consultants and industry experts at a service level. These consultants and experts were always there. But the need to take their assistance was never strongly felt until the situation changed with the arrival of eCommerce. Suddenly, there was an extinction-level threat perceived by many businesses. Consumer behaviour went in favour of eCommerce and there were no easy answers to win back loyalty. Matching the competency levels of eCommerce operations looked like an uphill task that could not be easily achieved. And there were many other such anxious changes. This was the time when it made sense to avail expert assistance from the outside.

Use of retail analytics

Business strategy formulation and decision-making in eCommerce bear the hallmark of the use of research and analytics. Various data points like traffic regions, source of traffic, engagement levels, bounce rates, etc. carry profound meaning to eCommerce brands and businesses. Offline retailers were quick to follow suit. Retailers who started their own eCommerce websites/apps had access to more data for analysis. For others, the in-house retail ERP systems in place do the job. The use of external market research services has also witnessed heightened popularity in the last couple of years.

More openness to automation and technology

The use of automation and technology may not be a new thing for many retail brands and businesses around the world. Brands like Ikea, Wal-Mart, Nike, Zara and many such leading brands are proactively tilted towards embracing modern automation and technology solutions. What eCommerce did was that it caused many MSME retailers to realise the importance of not missing out on technological advancements. It is not difficult to see how the adoption of hardware/industrial or software solutions helps businesses make better decisions, secure process coordination, and achieve enhanced operational efficiency.

Professional HR

Today, so many retail businesses even with small teams have their own HR departments. Is it because of eCommerce? This is not because of eCommerce alone. Over time, businesses did realise the importance of maintaining professional HR standards and practices in their organisations. ECommerce provided the impetus. Offline retailers could feel this need in a myriad of ways. A simple example of this would be the quality of customer support teams. The differences in how an eCommerce brand dealt with its customers and how an offline retail business did the same were stark and loud. Any veteran eCommerce consulting expert could tell this.

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FAQs

How is eCommerce influencing traditional retail? How eCommerce is changing the traditional business model? How eCommerce is changing retail?

Addition of home delivery services, competitive pricing, big spaces, extensive merchandising, more emphasis on customer service, the use of digital marketing, focus on strengthening operations, use of retail analytics, more openness to automation and technology, professional HR, etc.

How is online retail different from traditional retail?

Online retail - Shop from anywhere over internet-enabled devices via shopping websites/apps, no need to visit stores, get products home-delivered, choose from a wide merchandise, etc.

Traditional retail - Shopping by physically visiting stores, the onus on customers to bring home the purchases, limited merchandising to choose from, customers can check products more thoroughly than in online retail, etc.

What are the advantages of eCommerce over traditional retail?

For businesses: Access to wider markets, no need to rent/lease expensive retail spaces, more product offerings to customers, competitive pricing for more revenue, easy maintenance of online stores than physical stores, etc.