Whenever people hear the word retail, they immediately think Amazon. It has become a mantra among young and aspiring e-commerce entrepreneurs. Before the internet era, however, traditional retail reigned supremely. Companies had their clientele, their suppliers and their warehouses. Stores, at best, had only one point of sale (POS). Customers would come to your store mainly through word-of-mouth. They would come to your shop, look for items they were interested in, buy and leave. And that was it.
Sure, you made some bucks, but you had no idea how to make them come for more. Plus, what if you could sell more and more items? Well, you could, but your brick-and-mortar shop simply wasn’t designed to serve in a digital world. Amazon founder Jeff Bezos understood the need for a store of everything. Sir Tim Berners-Lee invented the World Wide Web in 1989, and the world as we knew it was never going to be the same again. The opportunities presented by the invention of the web were immense. The idea of selling online seemed ludicrous and downright preposterous. People want to see, touch things before they even consider buying them. The human nature hasn’t changed so much. Right? Wrong. Enter online retail.
With more and more people spending time online, it makes sense for companies to invest in cutting-edge web and mobile e-commerce applications. There has been a dramatic shift in the way people buy. Traditional retailers, sales people had one major advantage over buyers; information asymmetry. That is, sellers had more information than buyers over the items they were selling. The motto was ‘Caveat Emptor’ or ‘Let the buyer beware.’ As customers have access to vast a trove of information, that is no longer the case. Now, the motto is ‘Caveat vendor’ or ‘Let the seller beware’. Up until the early 1990s, retailers had all their stock on the sales floor. It was hard enough to make an estimate of the stock needed, let alone predict customers’ behavior and preferences. That was the pre-internet era, though. Companies can now can sell across multiples online channels, set up e-commerce platforms, CRM applications, taking online retail to a whole new level.
Online retailers are taking full advantage of the latest developments in software technology. Let’s face it. No matter how successful they might be right now, traditional retailers know that they need to adapt to the changing business landscape. Even Wal-Mart, the world’s largest traditional retailer, is taking huge steps into adopting a solid online strategy. In addition to their offline stores, the company plans to offer roughly 96 % of deals online during the Thanksgiving Day. People are shopping more and more from their smartphones. Mobile commerce is proving to be lucrative for small, medium-sized and large online retailers. Retail has undergone a paradigmatic shift, and businesses are adapting to the changes accordingly.
Traditionally, brick-and-mortar firms have relied on word-of-mouth to ensure business continuity. As long as they offer quality products and a great customer service, they can stay in business. Here’s the catch, though: any time a customer stops at a physical store, they simply buy and leave. Now, unless the store has a CRM platform, a website, or a wide social presence, such firms cannot gain valuable insight into their customer’s buying history, needs and even hidden preferences. One-time customers don’t add that much value to companies. Having said that, the number of companies implementing CRM platforms, and building bleeding-edge, yet user-friendly web and mobile applications is going through the roof. Heck, most companies now are building mobile-first apps. Since the number of mobile search queries on Google surpassed desktop search queries, it makes sense for firms to have a solid mobile marketing strategy. Customer Relationship Management (CRM) platforms excel at providing an outstanding customer experience.
Open-source Marketing Automation platforms are perhaps the best tool at gathering and analyzing customer data. These systems allows companies to track leads, create landing pages, send personalized content to each lead, etc. What is even more important, you can actually carry out fine-grain analyses about consumer behavior and preferences, tailoring offers to each client, based on their specific needs. Predictive analysis is the holy grail of retail. No more waiting for customers to come to your store, or worse, pestering them with annoying commercials. In-store purchases are still dominant, but online retailers are catching up.
No one knows for sure where retail is headed for, but the trend is clear. Online will take over retail, sooner or later. It’s just a matter of time. When time calls for change, do it.
As the saying goes “When facts change, I change my mind”.