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The importance of the physical store in the e-commerce era

By 05/09/2019 No Comments

E-commerce, or online commerce, is a branch of the retail sector that continues to grow, with an interannual increase that, in Spain, has ranged from 25 and 30% over the last two years. The trend is undoubtedly on the rise, as since 2013, the first year that the CNMC has data, there has not been a single negative figure.

One would think that with the increase in e-commerce, physical stores would gradually lose relevance; but we would be actually completely wrong. The rise of e-commerce has brought an opportunity to transform the physical store into something else, something that big brands like Apple or Xiaomi have been taking advantage of for some time.

Towards a new scenario

Today’s consumer is informed and demanding, and physical stores must be up to par. In their design and construction, new professional competences come into play, related to creating a commercial space that responds to the wishes and needs of the consumer. The process of loyalty towards the brand is evolving: customer service is becoming secondary and moving towards the background, as the ability to connect with the customer through emotion and personalized experience becomes the central focus. Today, the consumer wants more than a good product.

Today’s consumer is better informed, and is connected to the internet in real time.

Multichannel customer with an internet presence

Today’s consumer is also a multichannel customer: he makes purchases online and in physical stores interchangeably. New personalized experience strategies, such as making free Wi-Fi available or providing screens where the customer can order online after seeing the product in the store are becoming increasingly common.

The consumer is connected and present online: another dynamic created in the coexistence between e-commerce and traditional stores is to seek the integration of social media and online interaction. QR codes that accompany the product, screens where you can rate the service, campaigns and contests on social media…

Inside the store: a better shopping experience

Updated stock, order picking and no queues

Far from taking away the importance of the physical store, electronic commerce brings with it a series of advantages. On one hand, it requires and at the same time makes it easier for the store to have the updated stock, which is essential when it comes to informing a customer about the availability of a product. On the other, it improves the shopping experience through the increasingly common online order collection points, a fast collection method in which the consumer has already made all the decisions and the store has already prepared the purchase before he or she has set foot in the store. As a result, the queues at the checkout are reduced.

More commercial space – less storage

At the same time, the stock that a store needs to have stored is reduced, as, by increasing the bulk of online orders, more products are stored in large warehouses outside cities. This means more square footage for the store’s commercial space: a direct improvement to the customer’s shopping experience. Warehouses are moved to industrial areas, where logistics has also underwent a big transformation related to the same changes.

The bulk of the stock is moved out of the store.

Visibility at street level: brand positioning

The technology brand Apple proved it a long time ago: the physical store is an important part of brand positioning. What was once seen by some as a step in the wrong direction, criticized for the high costs of opening stores with such few products and so focused on aesthetics, turned out to be one of the most successful strategies of the company for customer outreach. So much so that it has had numerous followers, including the Chinese brand Xiaomi and the internet giant Google.

Why does a manufacturer of smartphones and tablets whose bulk sales occur online open new physical stores?

Physical stores are still the fastest and most effective way for brands to reach the consumer, also offering a unique shopping experience that the internet cannot imitate. There is no better way to teach and sell a product than through the senses: colors, smells and music go hand in hand with the interior design of the store, which must respond to the tastes and needs of today’s customer in day.

The physical store is an important part of brand positioning. In Éxico we are experts in Project Management within the retail sector.

New challenges for Project Management

With the rise of electronic commerce and the need to adapt commercial spaces, Project Managers working in the retail sector have seen their jobs evolve: not only must they be able to plan and coordinate work, but they need to also have competences related to new technologies and know well the new consumer habits of customers.

The design of the store’s commercial space must adapt to the marketing strategies that use digital screens and online outlets; something that opens the door to a new professional profile in the field of architecture and interior design.