Online Trade and Stationary Trade -- How Retailers Can Combine the Two
The apparent rivalry between online and brick-and-mortar retail raises an important question: must they be competitors? While online shopping offers convenience and speed, physical stores remain relevant for certain product categories. The answer lies in hybrid approaches that leverage the strengths of both.
Online and Brick-and-Mortar Retail in Figures
Sales data reveals dramatic growth disparities. Between 2012 and 2018, online revenue nearly doubled from approximately €28 billion to €53.6 billion. Meanwhile, traditional retail grew modestly from €445.4 billion to €525 billion. Despite absolute growth in physical retail, the percentage increase significantly trails e-commerce expansion, fueling concerns about retail's future viability.
Rivalry Need Not Be
Certain product categories -- groceries, cosmetics, furniture -- remain strongholds for physical retail. However, clothing, books, and electronics increasingly migrate online. Rather than viewing these channels as mutually exclusive, retailers can adopt hybrid approaches.
Multichannel Strategy
Retailers operate across multiple distribution channels simultaneously -- physical stores, online platforms, catalogs, and marketplaces like eBay and Amazon. This approach transforms online presence from threat into revenue generator. Major fashion brands including H&M and Zara exemplify successful multichannel implementation.
Crosschannel Integration
This extends multichannel by enabling "click and collect" and "order in store" services. Customers can purchase online and retrieve items from physical locations, or vice versa. Such flexibility provides convenience while preserving traditional retail benefits like immediate product examination and hassle-free exchanges.
Curated Shopping
This service merges online convenience with expert consultation. Customers complete questionnaires detailing style preferences, which stylists use to assemble personalized outfits. Companies avoid expensive urban retail locations while retaining expert staff. Outfittery successfully targets male customers through this approach.
Advantages and Disadvantages
Online Trade Strengths
- Shopping from any location
- No operational hour restrictions
- Direct price comparisons
- Expanded product selection
- Personalized marketing opportunities
Physical Retail Strengths
- Direct product interaction
- Immediate sales assistance
- Social shopping experience
- Simplified returns
- No shipping costs
While online retail's growth trajectory substantially outpaces traditional retail, physical stores retain substantial market share. Hybrid models -- multichannel, crosschannel, and curated shopping -- successfully bridge both sectors, creating mutual benefits rather than destructive competition. Complete elimination of physical retail remains unlikely in the foreseeable future.
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