Discuss // Is e-commerce going to a mixed, online/offline, model?
Is e-commerce going to a mixed, online/offline, model?
You see tons of brands that started online now dabbling in having an offline presence - bonobos, warby parker, polyvore and even Storenvy. Is it purely brand building or is retail a model that just naturally has to have a mix of online/offline for one brand and what do people in commerce think is the right mix?
Owner, BizClarity and Venture Capital & Private Equity Consultant
"Omni-channel marketing" is the term. In the future, nobody will remember why we thought of offline and online separately. Big retailers are merging their online/offline pricing, promotions, databases, and management structure, etc. The idea is that acustomer can fulfill any part of the shopping process either online, offline, or both. Apple is the model for this.
Of course it will take years for omni-channel marketing to tricky down to smaller companies, and there will always be a place for pure plays--but they'll be increasingly rare.
This trend is not new. It has a name: ROPO (Research Online Buy Offline).For some categories of products, typically those considered either 'sensible' (life insurance) or 'expensive' (cars) there is often a trend to research information online and buy offline. This trend may also apply to the clothing industry, particularly among certain target segments who visit clothing websites with an eye on 'scouting' out new fashion trends before heading to the brick and mortar location to try on the item. With mobile phones, this mindset has the potential to become even more relevant because of an increased connection between online research and the act of purchasing in the minds of consumers. In fact, research on mobile devices has the potential to immediately generate an offline sale if the right information can reach the right audience at exactly the right moment. For a retailer like Bonobos, the interaction between online and offline is highly relevant as a result of the desire of consumers to 'try on' clothing before purchasing their products (perfect fit matched offline and access to more choices online).
Here's what I've found in talking to enterprise brands as well as small
startups. At the enterprise retail level, 93% of revenue is generated at
the brick and mortar level. Some things we prefer to see and touch. Brick
and mortar generally will see a "multiplier" effect of 3-4x on digital
media, meaning, for every $1 converted in digital, they should see a $3-$4
conversion in-store from the same digital ad.
Even Amazon is starting to recognize this, with a showroom being built in
Williamsburg, Brooklyn. Apple proved the point that stores sell more
product -- I believe they hold either the top or near the top spot when it
comes to revenue/sq ft. for retail.
Smaller retailers know that physical wholesale helps get their product in a
place where consumers can touch and see it live, but also know that at some
point you want a more curated experience to represent your brand, hence
opening a store, especially in a high volume, high tourist, urban setting.
Hope this helps.
Expert at "Strategy IN Action", in a world of "Strategy AND Action" and, even worse, "Strategy INACTION"
Online market place platforms will increasingly provide only "price and product discovery" - for sellers/ providers who today don't know who wants their product/service and when! and vice versa. Fulfillment will increasingly shift to offline, at least in India, where lower cost, neighborhood, mom-and-pop stores are still very common.
Yes, it has to be mixed. Retailers need to have stores for luxury and high-end products. Customers are likely to pay for a product in which they have tried rather than the one displayed in the retailer's website. Its online division can take care of products that are of regular requirements. For instance, if you are buying a pair of socks or handkerchief etc, these are regular needs of the consumer and buying such products online would save a lot of your time and money.
The more we advance in the new days, the less general strategies will work everywhere.We are facing an era with less common sense. There are good exemples in companies working fantastic only online, offline or both. Try to find where in the consumer journey your business will work better. Size, market, service or product, midia investments, if you are in abig or small city, everything needs to be consider defining your choices. Online or offline, the shopper experience is by far the most importante issue we should worry about it. We`ll make mistakes, learn and correct as fast as possible. Don`t plan it all, the world is changing to fast.
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