The Mutual Benefit Of eCommerce And Physical Retail Relationships

The flow of commerce from online to offline (and vice versa) continues to be a trending topic in retail industry news. Nearly every retail brand, if it wants to be viable in the current market, needs to have a strategy for taking customers from online to offline platforms and the ability to convert sales at both ends of the spectrum.

This week, we look at a few stories in retail news that raise interesting questions about who is succeeding — and who isn’t — in the O2O game.

Online Brands Seek To Prove Themselves In The “Real World”

The latest research out of the U.K., conducted by Royal Mail, suggests that nearly 40 percent of online brands are attempting to branch out into brick-and-mortar spaces. As InternetRetailing reported in a recent article, several well-known and well-established online U.K. retail brands are making moves to find high street retail space.

One such brand that recently made the move to physical retail space is Watchfinder, a retailer of used luxury watches, which has been in the digital space for more than 10 years. As InternetRetailing points out, while the brand has all the right ingredients in its online mix (earning it upwards of 12 million hits on its site a day), it lacks the “face” of the brand that people can interact with in real time and space. Physical stores, the article goes on to note, offer indicators of trust far more rapidly than online — from positive customer service to presentation of products, to quality of stock and being able to see other trusting customers in store.

Watchfinder opened its first boutique in London’s Royal Exchange, alongside other notable luxury watch retailers, such as Omega and Tiffany & Co. Through its buttoned-up, in-store experience (complete with glass display cases and formally dressed staff), it is able to communicate the same exceptional service of the traditional premium watch retailers that it calls neighbors. But the retailer hasn’t totally abandoned its digital roots: IPads can be found throughout the space, displaying the full online inventory and keeping the brand’s omnichannel avenues wide open.

eCommerce Platforms Offer Small Retailers A Leg-Up On The Online Competition

The Economic Times reported earlier this week that Alibaba-backed, India-based eCommerce platform Paytm is teaming up with offline brick-and mortar retailers, allowing it to list its stores in the eCommerce marketplace and giving online customers the opportunity to fulfill their orders through the merchant of their choice. Paytm will also offer the ability for customers to select “pick up in store.”

“We will help these retailers create brand stores on Paytm and enable their offline channel to come online,” Amit Bagaria, associate vice president and mobile and electronics head at Paytm, commented to The Economic Times. His company has already partnered with nearly 5,500 stores, including 4,000 brand-exclusive mobile device stores and 1,500 large appliance retailers.

In addition to the ease of getting their products in front of Paytm’s large consumer base, retailers will also benefit from analytical data, which the eCommerce platform will provide, as well as other tools to help the stores create relationships with their newfound online customers.

“Hence, we will provide them with the data based on their virtual brand store, where they can create content and talk about the brand,” said Bagaria, adding that the company is moving away from a flash-sale model and will work on helping brands connect with their potential customers.

In an increasingly crowded online marketplace, these types of services have the ability to give smaller merchants a leg-up on the competition. But the benefits run both ways, as Devangshu Dutta, CEO at retail consultancy Third Eyesight, points out in the Economic Times article.

“The hybrid model [offline-to-online] helps eCommerce companies to co-participate in the business opportunity,” observes Dutta. “The benefit of having offline retailers on board helps them have distributed inventory and thereby improve their flexibility of doing business.”