Rewind to the late 1990s and early 2000s and many commentators believed that e-commerce would sweep away many of the traditional high street names in retailing. Why would shoppers even bother going to stores if they could simply buy everything they needed (often at a lower price) online, they argued.
Clearly, such prophecies were over exaggerated. People continued to shop at physical stores for a number of very clear and obvious reasons - they wanted to experience the product, talk to shop staff, shopping was something they enjoyed doing, they trusted the brands above the shop door, they didn’t want to sit and wait in for deliveries, etc etc.
In fact, what is interesting from our perspective is how the traditional bricks-&-mortar retail brands have come to claim e-commerce as their own. True, there are a number of significant pure-play e-commerce players out there (think Amazon, newegg, asos etc), but in most developed markets it is the major high street names which dominate the list of major players in a variety of sectors.
Recent evidence from the UK supports this shift away from pure-play e-commerce towards multi-channel retailing. Electronics retailer Dixons Retail, for example, recently announced that in its year ending 30 April 2011, pure-play e-commerce sales (through Pixmania and Dixons.co.uk) were down by a sizeable 9%. The group’s multi-channel internet sites however sales sales rise by an impressive 12% over the same period.
Some good reasons why multi-channel has clear benefits and why it will continue to grow over pure-play sites:
- Shoppers already have trust in the retailer’s brand. There is greater security over who they are buying from.
- There is a greater range of delivery and collection options - customers can purchase online and pick-up instore if they need the product quickly. This removes the inconvenience of having to wait in for a delivery to arrive at home.
- Most retailers do not charge for delivery if a customer collects from a store.
- It is often more convenient to return an unwanted or faulty product to a store rather than ship it back.
In order to compete it is likely that pure-play operators will increasingly have to ally themselves with a store-based retailer. This will allow them to utilise their partner’s stores as pick-up and return points. There is speculation in the UK, for example, that health & beauty retailer Boots is in discussions with a number of pure-play sites (including fashion retailer asos.com) to provide just such as service.