We want to give special thanks to Varvara Dyudina & Raphaël Delannes, the two students who co-authored this post.

By the end of 2021, more than half of all retail transactions will come from eCommerce platforms. 

According to EMarketer, eCommerce in China will account for 52.1% of the country’s retail sales. It is a massive boost from just 44.8% last year. 

China will become the first country where most retail purchases come from online platforms. Researchers also forecast 58.1% of Chinese transactions coming from the eCommerce market by 2024. 

Huge online shopping and online payment platforms have emerged with the growth of Chinese eCommerce. Companies like Alipay and WeChat Pay are now a payment standard in the Chinese market.

So what does this mean for eCommerce entrepreneurs and retail managers, exactly? 

They should look closely at the Chinese market as it could impact global retail.

This guide will cover the state of Chinese eCommerce and the main actors involved. Then we will go over the key dates and trends for eCommerce in China. And later, we will discuss how it could become the blueprint for 21st century retail.

China’s success in developing its eCommerce market is unparalleled. 

In the United States, eCommerce purchases in the retail industry only amount to about 15%. European countries are even less involved in eCommerce at 12.8% percent.

Who Are the Main Actors of Ecommerce in China?

In the past decade, many platforms have emerged to handle the demand of Chinese consumers who shop via online marketplaces.

There are several actors, but one thing to keep in mind about the Chinese e-commerce market is that it’s highly concentrated.

As of 2020, the top three e-commerce players (Alibaba, JD.com, and Pinduoduo) concentrated 90% of all e-commerce in China. Compared to the US, this is a very high concentration, where the top three players (Amazon, Shopify, eBay) concentrate “only” 50% of the market.

Taobao (Alibaba)

Owned by the e-commerce giant Alibaba, Taobao offers both C2C and B2C sales opportunities for users. That is what sets it apart from many other Chinese eCommerce platforms,

Taobao is a genuine and well-established eCommerce marketplace founded by Alibaba. It allows users to build their online shops and sell through Taobao. 

Small and medium businesses can also sell on Taobao. Though large companies are more appropriate for Tmall, a marketplace is covered below.

Tmall (Alibaba)

Also belonging to Alibaba, Tmall is the biggest B2C online retail platform in Asia. 

Part of Tmall’s popularity comes down to the fact that you can buy anything on its website. From not-so-great low-quality wholesale items to sophisticated, luxury, high-quality products. 

At the same time, the requirements for the merchants to enter the platform are stricter. For example, only “validated” is allowed to guarantee the quality of the service.

Think of Tmall as China’s Amazon.

Pinduoduo

Pinduoduo or PDD is another eCommerce platform rising to fame in China. 

This platform is successful because it provides customized recommendations for consumers. Search-based eCommerce platforms do not usually offer personalization features.

Pinduoduo has excelled in providing personalized customer journeys. Users can even use their friends’ lists and favorites to access tailored recommendations.

Another value proposition unique for Pinduoduo is the group buying option. We will cover it in more detail later on. 

JD.com

JD.com is one of the largest retailers in China and a Fortune Global 500 company. In addition, it is well known for platforming cross-border sales. 

Like Amazon, JD.com is responsible for much of the platform’s inventory. They also fulfill orders in-house through a massive first-party logistics network. 

The JD.com business model has lower margins than huge enterprises like Alibaba. However, it also ensures better quality control over products and delivery speed.

Kaola

Kaola is the go-to platform for Chinese consumers purchasing products from Western countries. 

This cross-border eCommerce website sells products from foreign brands. In addition, it allows sellers to market their goods through various Kaola-based marketing channels. 

These channels include online forums, various portals, and several advertising options. 

Little Red Book (Xiaohongshu)

Little Red Book is a Chinese social shopping network based in Shanghai. 

This unique and disruptive platform has over 100 million users. It caters to individuals who want to find the hottest beauty and skincare products. It focuses on products from international brands that are not available in China. 

Tons of brands around the globe sell on Little Red Book, but it isn’t that much of a shopping platform. Instead, it’s a place where users can post reviews and tips on products they’ve used.

VIP.com

VIP is an eCommerce website based in Guangdong. With an impressive 52 million users, VIP is the third biggest eCommerce platform in China. 

There are a few different reasons why VIP is so successful. In particular, its focus on international sales and discount sales models.

VIP Shop, the owner of VIP, is currently also building a financial service platform. The latter’s purpose will be to handle.” online payments and insurance.

Suning

Another example of a large retailer in China is Suning. It is a B2C retailer with a massive online eCommerce platform and 9,000 stores around the country. 

Suning sells all sorts of physical products and services and content merchandise.

Douyin (Tik Tok)

A relatively new competitor in the Chinese eCommerce market, Douyin is the sister app to TikTok for the Chinese market. 

It’s an eCommerce platform that focuses on live streaming to sell products. 

It became famous after staging an offline event, “ecosystem conference.” The event challenged many Chinese Commerce giants, including Pinduoduo and Alibaba’s platforms.

Key Dates for Ecommerce in China

China has its specific holidays and festivals that set the pace for brands to launch their promotional campaigns. Therefore, it is an excellent chance to attract as many customers as possible.

Chinese consumers are particularly attracted to discounts. That fact makes these campaigns truly important for the merchants.

There are a few key dates in the Chinese calendar to consider if you want to succeed in eCommerce in China. 

Single’s Day is The Biggest Megasale Event in the World

Single’s day is a 24-hour super discount period on November 11th in China. It was initially launched by Alibaba and followed by all the significant players of e-commerce in China. It’s similar to “Black Friday” in the United States. 

“Single’s day” has become a very appreciated and anticipated event in China. It is also a crucial period for local companies. 

On 11.11, consumers tend to purchase products they would not in standard time. The practice of buying a year’s worth of ordinary daily life items is also mainstream.

12.12 or Double 12 Festival

The 12.12 festival is a sequel to Single’s Day (11.11 day). It was launched to benefit smaller Alibaba vendors that couldn’t compete against more prominent brands during Single’s Day.

The festival has rapidly become another famous shopping festival in the country.

Chinese New Year

New Year in China is one of the most, if not the most, events of the year. It also has the particularity of being one of the biggest shopping festivals. 

It is common to return to your hometown during this festivity to celebrate it with your family. So, weeks before the Chinese New Year, there’s a rise in consumption as people buy presents to bring home to their relatives.

Golden Week 

In China, the national holiday is also known as the Golden Week. It is one of the most extended holidays in the country after the Spring Festival and takes place from October 1st until October 7th. 

People usually travel during this week, while consumption skyrockets in the country.

This also illustrates itself within eCommerce in China. For example, Tmall Global saw a 79% spike in sales during the golden week of 2020 (compared to the same period in 2019).

How Did Ecommerce in China Grow So Much?

Many factors are involved in the most recent boost in digital transactions. But most evidently, it can be attributed to the COVID-19 pandemic. 

Writer Owen Matthews in his article broke down the pandemic’s influence on China’s online market as a whole.

“COVID-19 stay-at-home orders were a huge boost for eCommerce in China as elsewhere,“ the article reads, “Although the country’s overall retail sales are down, Chinese consumers will spend 144.44 trillion yuan ($20.8 trillion) on retail eCommerce in 2020, up 16% from 2019, according to Emarketer.com. Chinese e-commerce companies have also adapted rapidly to the COVID-19 reality, both by supporting government initiatives — for example, JD.com deployed autonomous vehicles to deliver essential medical supplies in Wuhan — and by launching new services such as contactless delivery to make it easier for consumers to continue shopping during lockdowns.“

The growth of Chinese eCommerce companies is simply astounding, seen by the sheer size of numbers during Singles Day. 

In 2020, Alibaba and JD.com racked $74B and $41B, respectively. So to give you some perspective taking the combined global revenues from Amazon and during Black Friday 2020, it is 7x and 4x, respectively.

Chinese eCommerce companies have been going above and beyond regarding tech innovations. The aim is to create a more dynamic experience for consumers. 

Today Chinese eCommerce companies are as competitive as the whole Chinese market. Alibaba ruled it with an iron fist with a market share of 81% no more than a few years ago. 

Now, other online platforms offer innovative technologies and better customer service. As a result, Alibaba’s market share dropped to about 55%, where it currently stands. 

Competition has allowed eCommerce companies to take advantage of new technologies. 

Chinese companies pushed innovations like live shopping, digital payments, group coupons, and deals. Later, they started merging social media and eCommerce and instant messaging integrations. 

While other countries are still sticking to point-and-click eCommerce, China has a thriving and competitive market exploring the boundaries between shopping and real life.

Mcommerce is the Cornerstone of Ecommerce in China 

According to the Bernstein Ecommerce Outlook, the Chinese market had around 900M internet users in 2020. 

Let that number sink in. 

There is no single country in the world with as many internet users. It has almost three times as many users as the US and nearly twice as many as the EU. 

But you have to consider that the high growth of internet penetration in China came at the same time with the invention of the smartphone. 

China is the world’s leading smartphone market, so smartphone penetration is very high. According to Bernstein, 90% of Chinese users access the internet through their phones. 

This, in turn, encourages them to conduct their purchases through their phones. As a result, since 2015, more Chinese consumers have made purchases via phones than via computers.

Several factors make mCommerce particularly popular in China:

• Mobile payment apps such as WeChat Pay and Alibaba’s Alipay.  They make it very quick, easy, and convenient for buyers to pay for items using their smartphones;
• Multi-functionality. Social media apps are utilized for many everyday functions. You can book appointments, order food, plan overseas trips and pay bills. WeChat allows to do all these within a single app; 
• Cost-efficiency. Investment in mobile has become more attractive in recent years. The reason lies in the lower costs of mobile networks and falling cost of mobile devices;
• Better access. Mobile allows people living outside of the main cities and towns to have brands they would not otherwise have.

Another major factor is that western buyers embraced e-commerce long before smartphones emerged. With the internet being late to come to China, many Chinese netizens have bypassed desktop use. 

As a result, mobile internet access has a more prominent position in China than in Australia.

5 Trends Driving Ecommerce Growth in China

We have established that the growth of e-commerce in China is unparalleled anywhere else in the world. 

There are specific structural differences with other markets like the US, like the share of mobile e-commerce and market concentration. These differences encourage players in these countries to argue that China shouldn’t be the blueprint for 21st century Retail.

But despite these differences, there is no doubt that underlying innovations are pushing the growth of e-commerce in China.

Let’s look at five of these trends fueling the growth of Chinese e-commerce. 

1. Live Shopping

One of the biggest trends shaping eCommerce in China has to be live shopping. 

In an interview with Financial Times, technology entrepreneur Dan Dan Li noted the similarities between the old-school American shopping channel and the newly emerged trend of selling products via mobile video demonstrations. 

Live video is a massive part of China’s eCommerce apps like Douyin, Taobao, JD.com, and Pinduoduo. But Lin noticed that in the West, the nature of eCommerce is still very static and unchanged.

“Almost everything else is mobile-first,” said Li in the FT interview, “Entertainment is mobile-first, social is mobile-first, but eCommerce [in the US] is in the Stone Age.”

These dynamics can cause a significant change in other countries. For example, China’s growth in eCommerce has been casting a shadow on American and European markets for some time now.

2. Omnichannel engagement

Another quite popular trend in Chinese eCommerce is the use of omnichannel marketing. 

Omnichannel marketing is something that marketers are starting to pick up on in the US or Europe. 

In China, it’s already been an established must-do for eCommerce entrepreneurs. A cross-channel strategy isn’t just effective, but it could also be inexpensive. 

A unified approach to content creation across different marketing channels can result in significant synergies. Thus, reducing the cost of organic social media marketing and search engine marketing.

3. Social commerce

Social media shopping is another hot topic for Chinese eCommerce. Experts forecast such sales to reach $363 billion in 2021, tripling the results of 2018. They are also expected to account for 13 % of total eCommerce sales this year. 

Online social networking became an essential part of our lives, and advertisers took over social media platforms. So the latter’s transformation in an ecosystem for eCommerce was a question of time.

The multi-functionality of Chinese social media encouraged the development of social eCommerce. 

Mini Programs introduced by WeChat boosted the trend. These subcategories ease the experience for both merchants and customers. 

The Programs also became popular with residents of smaller cities who tend to use cheaper mobile data providers. It is preferable to have a single app for them instead of downloading several new ones.

Digital payment options like WeChat pay also contributed to the social eCommerce trend. As a result, customers can have a smooth, unified experience without exiting the platform.

4. Group buying

The growing popularity of group-buying also answers the Chinese eCommerce peculiarities. 

Pinduoduo is a significant contributor to the trend. Its unique value proposition made it the fourth largest eCommerce platform in China. One of the key features was the engagement of customers from rural areas. 

Group-buying implies bulk purchases by a community. But, first, a community leader creates a WeChat group to disseminate product offerings.

Then, he organizes bulk orders of different products directly from brands and distributors. First, the order arrives on the name of the leader. And later, he distributes individual orders among the community.

Such a method engages around 100-150 customers at once. It allows community members to benefit from low-cost delivery. It also helps to order items not available in the local stores.

5. Low-tier markets

One more trend occurring with Chinese eCommerce entrepreneurs is targeting low-tier markets in China. 

It makes sense to market and sell to consumers in big cities like Beijing. 

But consumers in smaller towns deal with lower living costs. Thus, they have more disposable income. Therefore, marketing to this demographic is clever as the Chinese market is big enough.

Is Ecommerce in China the Blueprint for Ecommerce in Other Countries?

Here is the million-dollar question: Could China’s eCommerce model become a global trend? 

Prominent American and European corporations have often underestimated Chinese companies. So the possibility of them adopting Chinese eCommerce trends seems a bit iffy. 

It doesn’t help that the Chinese market has few connections to other markets. But, again, it can be partly explained by the distance and protectiveness from the government. 

While this seems grim, a lot is still up in the air. It looks like China could be the blueprint for eCommerce in other countries. 

A whopping majority of retail sales are occurring through online platforms. It isn’t only inspiring for eCommerce entrepreneurs. It could very well become a reality in other countries.

As we’ve established, there are structural reasons why the Chinese e-commerce market might be unique. There is an unparalleled penetration of commerce, and the market is highly concentrated.

But players worldwide take a page out of the Chinese e-commerce playbook. Instead, players like Amazon or L’Oreal are dabbing into live shopping or social commerce outside the Chinese market.

So despite the structural differences, it is worth looking towards China for inspiration in the coming years. Or at least the most prominent global players are doing it. 

Do you want more insights into E-commerce, Omnichannel Retail, and Digital Transformation? Subscribe to ApocalypseRetail to get insights sent directly to your inbox. Our content is designed for top business schools, retail managers, and eCommerce entrepreneurs who want to survive in the ever-volatile retail industry. Subscribe to our newsletter to join the fight against the Retail Apocalypse!

The post Will Ecommerce in China Dictate the Model For 21st Century Retail? appeared first on Apocalypse Retail.

We want to give our special thanks to Soyeong Lee & Nicolas Oulianov, the two students who co-authored this post.

Conversational commerce is an e-commerce trend that has gained lots of traction lately. Since 2015, when Chris Messina from Uber coined the term, it has become omnipresent. However, conversational commerce is no longer a trend but an industry standard.

As a retail professional, you may not know what conversational commerce is. But as a customer, you sure do. Today, this form of commerce is everywhere. And customers expect companies to use it both in standard and creative ways.

This article tells you what you need to know about the new standard of commerce. We also show you inspiring examples of companies using conversational commerce. Finally, learn how to get started with this new form of commerce right now.

What is Conversational Commerce?

Conversational commerce is when customers can chat directly with your brand from anywhere. For example, from a messaging app, like Whatsapp, Facebook Messenger, Wechat, KakaoTalk… Or through a voice assistant: Ok Google, Amazon Alexa, Siri.

Customers can initiate a conversation with a company via a real human or a robot to engage or complete a transaction:

• Ask questions about the product
• Get a custom pricing
• Order products and pay securely
• Follow their delivery
• Ask for help or customer support

And much more.

The exact format of conversational commerce varies from company to company. For example, a live chat on your website lets the customer talk to a salesperson.

But this form of commerce can also get very technical. For example, it can be a chatbot on Facebook Messenger, from which the customer can order and pay right away. 

Chatbots understand users’ intentions with artificial intelligence, machine learning, and natural language processing. Then, with automated responses, chatbots offer quick responses to most queries.

For example, Pizza Hut developed a Facebook Messenger chatbot from which you can order food.

Facebook or Twitter users chat and order custom pizzas right from the Pizza Hut chatbot. The bot can remember their previous orders or customization for future purchases.  

The Pizza Hut chatbot also keeps customers aware of their latest promotions and provides easy access to the FAQ. 

Is Conversational Commerce a Fad?

The short answer is no, all the contrary.

Customers’ expectations of conversational commerce solutions are growing. This is because messaging apps are getting huge.

In China, people are already chatting with 1.5 billion businesses on the messaging app WeChat. Today, Whatsapp has 2 billion users, and Facebook Messenger has 1.2 billion. 

The demand for conversational commerce is real. Customers expect to reach out to your brand like they do with anyone on the messaging apps they use daily. Not through contact forms or phone calls.

Messaging apps are more casual and convenient. 71% of consumers say they are willing to spend more time with a brand on messaging apps than on the phone.

Is Conversational Commerce a Threat to Retail?

This form of commerce increases personalization in the shopper’s experience. And Brick and mortar lose some of its key advantages. A customer noFor example, a longer has to go to the store to get the customized recommendations of a connoisseur.

Conversational commerce’s ubiquity sets new standards for the whole retail and e-commerce industry. 

Customers are likely to complain if no instant messaging is available. They will publicly unleash their outcry on social media and destroy a brand’s reputation in a flash. 

But conversational commerce is also an incredible opportunity for traditional retailers. For example, the popular clothing retailer H&M created a chatbot to promote its e-commerce and physical stores. 

H&M sells many different clothes, and customers can quickly get lost on the website. So H&M developed the Kik chatbot, which recommends different clothes based on the user’s taste and preference. 

The chatbot asks customers to choose photos of clothing they like and to describe their aesthetic with keywords, like Boho or Grunge. Then, the chatbot suggests articles to buy according to their style profile.

Notice H&M’s use of conversational commerce is much more visual. This sort of commerce doesn’t mean you’re limited to text. You can use visual cues like emojis, gifs, and pictures to engage with customers.

How Conversational Commerce Can Make E-commerce Websites Stand Out?

With conversational commerce, you can increase conversion rate, customer retention, and brand advocacy. Indeed, this sort of commerce provides highly desired customization of the whole shopping experience.

But you have to do it right.

Conversational commerce can improve and ease out any step of the customer’s journey. The most standard ones help customers get information about the product and handle customer support after the sale.

For example, L’Oréal, helped by Haravan, added an automated virtual assistant called Mr. Bones. The bot embodies its brand Kiehl’s Vietnam. On Facebook Messenger, the bot took care of customers’ inquiries, and shoppers could buy right from the chat.

L’Oréal Kiehl’s Vietnam solution to generate conversations increased revenue by 22%. As a result, it became the first conversational commerce retail channel in South East Asia.

Is Voice Commerce the Future of Conversational Commerce?

In the future, a transaction initiated via a conversation will be using voice commerce.

With voice commerce, everything is done with voice by talking to a voice assistant like Ok Google, Siri, or Alexa.

But this is not something for the future. It is a very real solution we have at our disposal, which is only waiting to become a mass adoption solution.

For example, with Amazon Echo, shoppers can track their delivery. Then, with a voice command, the voice assistant Alexa will reply by listing their ordered items. They can also order a Domino’s pizza without having to take out their credit card. 

Voice commerce is relatively new. But it’s expected to grow as people use voice assistants more and more, especially since they are already available on any smartphone. 

In 2020, 38,5% of the US population used a voice assistant at least monthly. It’s 12% more than the year before. This is the highest growth in the use rate ever, caused mainly by the lockdowns in the US. 

The customer behavior is shifting. As a result, voice commerce will likely become very, very big.

How to Get Started?

You don’t have to be a big company to start doing commerce via automated conversations. Small e-commerce businesses can begin with conversational commerce right now. All they need is to create an account on social media and chat with customers.

But as you get more customers, tracking every conversation becomes near impossible. So instead, you can use more advanced solutions to reduce your workload and improve customer satisfaction.

These advanced solutions also let you be present on many channels. Like Facebook Messenger, Whatsapp, or voice assistants. Then, a bot or your salesperson replies to them from a single interface.

Here are six solutions to get started with conversational commerce as an e-commerce store:

• Zendesk: customer support and B2B sales
• Intercom: Facebook Messenger and bots for marketing & support
• Birdeye: customer feedbacks and reviews
• Tidio: enhanced and personalized live chat  
• Botnation AI: DIY Facebook Messenger chatbot

Conversational Commerce is Not a Silver Bullet

To deploy a successful conversational strategy for commerce, you should first think of its purpose. For example, when and why would a customer want to talk to your brand? What is the level of service the customer would expect?

Once the purpose is clear, map out the existing communication channels you have. See how you can already improve existing touchpoints with your users or even remove them. But to be sure to succeed, you need solid fundamentals and an omnichannel strategy.

Likewise, don’t put poor conversational experience for the sake of it.

Everyone hates bad chatbots and no customer will buy more just for having a chatbot.

To prevent this outrage against your chatbot, be open about what the bot can and cannot do. If there is an issue, allow the customers to reach out to a human.

Conversational commerce solutions can make a good customer service experience even better. But it will not fix your internal operational issues. 

Using chatbots and creating conversations with customers, you can create new opportunities for your business. But to be sure to succeed, you need strong fundamentals and an omnichannel strategy.

Do you want more insights into E-commerce, Omnichannel Retail, and Digital Transformation? Subscribe to ApocalypseRetail to get insights sent directly to your inbox. Our content is designed for top business schools, retail managers, and eCommerce entrepreneurs who want to survive in the ever-volatile retail industry. Subscribe to our newsletter to join the fight against the Retail Apocalypse!

The post Conversational Commerce: Everything You Need to Know to Implement it in 2022 appeared first on Apocalypse Retail.

Black Friday has become a day that, for many people, symbolizes a celebration of consumerism. It is the unofficial start of the Christmas shopping season that has become a landmark event for retailers. 

For some retailers, it comes with increasing profits. For others, it can become a logistical nightmare. 

Their aggressive discounts and promotion strategies send consumers into a frenzy. 

Everyone has seen the pictures of people camping outside stores before opening, and even cases of people trampled by crazed shoppers.

But looking beyond consumer craziness, Black Friday and other mega sales events have been a target of critics for more sustainability in Retail. 

These critics argue that mega sales events encourage excessive and often unnecessary consumption, which has severe environmental and social impacts. 

Let’s look at what mega sales events are, how they started, and how big they have become. We’ll also look at these events’ environmental and social impact and what Black Friday alternatives exist for more ethical consumers. 

Why is it called Black Friday?

The Philadelphia and New York police in the fifties named the day after Thanksgiving Black Friday. 

As a US holiday that occurs on a Thursday, many people would take that Friday off work to have a long Thanksgiving weekend with their families. 

During Thanksgiving, most people exchange gifts, so retailers would stock up in certain products the month before the holiday. 

In the beginning, retailers used Black Friday as an opportunity to clear out excess inventory by discounting it. By clearing out excess inventory, retailers could make room for new products within stores for the Christmas season. 

So it was during the fifties, shoppers began to flock into the city to start their Christmas shopping. 

As consumers gathered in the city to find the most discounted items, the event started requiring more police enforcement. The police had to work longer hours and handle the chaos; they dubbed the Friday after Thanksgiving Black Friday.

But the dynamics of the event have evolved over the years. Black Friday stopped being a stock-clearance event for retailers and started to include high-demand items to attract more shoppers.

On top of this, Retailers started to entice shoppers with more aggressive discounts and significantly increased their advertising of the event. 

It was really in the 1980s that Black Friday became a frenzy in the US. 

People would queue outside department stores for hours or overnight to be the first ones into the shops. Security and law enforcement had their work cut out trying to contain the crowds fighting each other to get their hands on a discounted TV. 

Seeing the potential for increased sales, retailers kept investing in Black Friday, and the trend started spreading worldwide. 

And other mega sales events started popping up.

What are Black Friday Equivalents as mega sales events?

As Black Friday became a staple of American Retail, other mega-sales events started popping up worldwide. In some cases, these events are pushed by a single company or were based in a single country. 

With the rise of e-commerce and a more interconnected Retail, most of these events have become global. 

With Retailers everywhere aiming to take a cut of mega-sales events, some events have become very popular. But there are really three mega-sales events that are comparable to Black Friday in terms of size and reach:

1. Cyber Monday or Black Friday Weekend
2. Singles’ Day or 11-11
3. Prime Day

What is Cyber Monday or Black Friday Weekend?

Cyber Monday happens on the Monday just after Thanksgiving and just after Black Friday.

With the frenzy of Black Friday and the resources it takes in terms of law enforcement and consumer protection, cities have begun regulating Black Friday. 

In some cities, not all stores were allowed all day, and retailers had to follow specific rules for what could be advertised as a Black Friday deal. For example, to be considered as a Black Friday deal, some items needed to have a minimum amount of stock or an unchanged price for some time before the discount. 

The idea was to protect consumers from false advertising. 

But with the rise of online shopping and many stores wanting to avoid the Black Friday crowds’ craziness. 

In 2005, the National Retail Federation in the US officially dubbed Cyber Monday after a trend that retailers began to recognize a few years before. 

Online Retail is not bound by the same constraints of physical Retail to have a limited stock per store or fixed opening hours. 

So Cyber Monday allowed retailers to continue Black Friday deals one more day, with a less stringent regulation as fewer public resources are required. 

Today, most retailers mix deals between Black Friday and Cyber Monday. The event has really become a Black Weekend, with sales running for four days.

For some retailers, revenues generated during Black Weekend can concentrate up to 20% of their entire year revenues. So this weekend can literally make or break a year’s performance for these companies. 

Some e-commerce pure players have even started to push deals during the week with what they call Cyber Week, a term that appeared in 2013. 

What is Singles Day or 11-11?

As profitable ideas are quick to spread, other countries started to catch on to the benefits of mega sales events. 

The original idea came from an unofficial holiday in China to celebrate people who are not in a relationship. 

The date was chosen on November 11th as 11-11 as the number 1 symbolizes an individual or a single person. The number 1 also resembles a stick used in Chinese slang to refer to an unmarried person. 

Paradoxically, the date has become a massive event to celebrate weddings and give gifts which have greatly benefited online players such as Alibaba or JD.com. 

This massive online shopping event recently surpassed Black Friday and Cyber Monday sales as the world’s largest mega-sale event. 

With Chinese companies becoming global, the Singles’ Day event has spread to the rest of Asia and elsewhere. 

Companies like Lazada in South East Asia, MediaMarkt in Europe, or Aliexpress (a global arm of Alibaba) have made Singles’ Day campaigns across different countries. 

These companies have pushed to make this event an actual global mega-sale event. 

What is Prime Day?

Amazon has been one of the biggest retailers benefiting from the Black Friday and Cyber Monday sales. 

But same as any other retailer in the consumer goods industry, Amazon is highly dependent on the holiday season during Q4. 

In 2015, Amazon introduced the concept of Prime Day with a single promise: “Offer Black Friday deals in July” exclusively for members of their loyalty program.

Of course, Prime Day is an opportunity to attract shoppers during the “slow-season” of Retail during the summer. 

It is also a great way to offer an additional incentive for amazon shoppers to subscribe to their loyalty program, Amazon Prime.

But from a strategic standpoint, it has two additional benefits for a company like Amazon. On one side, it allows the company to absorb fixed costs during the off-season as most of the operational structure is under-utilized. On the other side, it is a great way to test new features and processes before the high season. 

Amazon has continued pushing Prime Day sales every year since 2015 and has deployed it in every single country they operate. 

Mega-sales events have become critical dates in global Retail. 

But as consumers become increasingly aware of the impact of mass consumption, many people ask if these events are compatible with more sustainable Retail.

Are mega-sales events compatible with sustainable Retail?

There are critics of Black Friday and other events in some European countries for being “too American.” These critics are easily dismissed, and these events have found many supporters across Europe

But these events are also being criticized as being the flagships of overconsumption. 

Black Friday and mega-sales events are the flagships of overconsumption.

As consumers become more socially responsible, they realize that there is an impact of having mega-sales events. 

It is impossible to separate the environmental cost of mega-sales events from the impact of general overconsumption.

Mega-sales events are built around heavy marketing campaigns and the scarcity factor of limited-time deals. 

You could argue that the entire event is built around pushing consumers to buy items using time-sensitive deals. But, in turn, these deals inevitably promote waste as people buy things they don’t need and unnecessarily use more resources. 

Supporters of mega sales events say that they give people with limited means access to products they wouldn’t otherwise be able to buy. 

They will also argue that Retail companies need these events to clear out stock or reduce dependency on the high season. 

Let’s not forget that this was the reason Black Friday started.

But the reality is that Black Friday has turned into a much bigger event with higher marketing spend and shopper frenzy, far from its original purpose. 

Today, Black Friday has become a race to increase revenues, extending deals as much as possible to promote consumption. 

There is nothing sustainable about overconsumption. 

Black Friday and mega-sales events have a tremendous impact on retail employees.

Black Friday and other mega-sale events are a logistical nightmare. 

For online and offline retailers, preparing for a mega-sale event can take an entire year. 

There is stress involved in preparing for the event. Stress comes from making sure you have the right amount of stock at the right place, pushing aggressive marketing campaigns, and working much longer hours than usual.

But there is also the stress of dealing with frustrated customers, which have even put lives at risk. There have been reports of brawls, fights, and even deaths related to Black Friday in the US, Brazil, or Mexico. 

With the rise of social media, more and more videos surfaced of brawls in 2017 and mall shootings in 2019. 

These events alone are enough to make people question if these mega-sales events are sustainable.

Questions come not only from an environmental point of view but also from a corporate social responsibility standpoint. 

Retailers should ensure the safety of their customers, as well as the security of their employees.

Ensuring customers’ safety has become a challenge during these events, especially during the effects of the Covid19 pandemic, with social distancing guidelines and other public safety measures.

So on top of questions regarding overconsumption, Black Friday and other mega-sales raise questions as public safety hazards. Which in turn raises questions about the sustainability of these events over the long run.

With the pandemic, some of them really thought it was the perfect storm to kill Black Friday once and for all. 

The impact of Covid19 on Black Friday: longer deals and more online shopping

The Covid19 pandemic did have an impact on overall retail sales, forcing the closure of stores.  

Public safety measures inevitably hurt the overall number of shoppers during Thanksgiving weekend. 

But Black Friday remains a huge Retail event worldwide. 

How big was Black Friday 2020? It slowed a bit but remains huge!

Thanksgiving weekend includes the five days between Thanksgiving and Cyber Monday, including Black Friday. As a result, these five days have become a single mega-sale event worldwide.

According to the National Retail Federation, Thanksgiving weekend attracted 186.4 M shoppers in the US in 2020. This number is down from 189.6 M in 2019 (-1.7% ’20 vs ‘19), but up from 165.8 M in 2018 (+12.7% ’20 vs ’18).

In terms of revenues, Thanksgiving weekend totaled $58.1B in 2020. This number is down from $68.6B in 2019 (-15% ’20 vs ‘19), but up from $51.9B in 2018 (+11.9% ’20 vs ’18).

So, it becomes clear that in 2020 the growth of Black Friday was slowed by the pandemic. But the reality is that most consumption instead transferred online, with a massive increase in e-commerce sales during the pandemic.

The Covid19 has far from killed Black Friday; instead, it has transformed it.

Black Friday and Cyber Monday are becoming global events for online shopping.

The covid19 pandemic had a negative impact by slightly reducing the number of shoppers in the US in 2020. But it had another significant effect on how these shoppers made their holiday purchases. 

According to the NRF, online shoppers during Thanksgiving weekend in the US increased by 44% in 2020 compared to 2019. If you consider only Black Friday, the number of online shoppers during this particular event surpassed 100 M for the first time ever.

If we analyze Black Friday and Cyber Monday numbers globally, online players are evidently thriving during mega sales events. 

During Black Friday and Cyber Monday, Amazon totaled $4.8B in Gross Merchandise Value globally, up 60% from 2019. Another player that thrived was Shopify which racked up to $5.1B in Gross Merchandise Value globally, up 75% from 2019.

The interesting part about Shopify is that the company generated triple-digit growth in European countries where Black Friday has been most criticized. Shopify sales grew in Italy +211%, Germany +189%, and UK +122%

Interest for Black Friday in 2020 varied globally

Perhaps one of the best ways to measure where Black Friday has the most strength is by looking at online searches.

According to Semrush, Black Friday’s global interest varied considerably between countries. 

Online searches for Black Friday-related keywords grew by +34% in countries like the US and Australia, with a peak growth in searches in Brazil, where it reached +48% in 2020. 

On the other hand, interest in Black Friday seems to be stalling in European countries. The countries where interest for Black Friday dropped the most were Germany, France, and Spain, where searches dropped by -16%, -4%, and -2%, respectively.  

Covid19 transformed how traditional retailers addressed the pandemic.

Giant retailers with physical stores used the opportunity in 2020 to change how they operated during Black Friday. 

To promote public safety and limit the number of people in stores, retailers like Walmart, Target, or Home Depot made significant changes to their black Friday deals. 

Instead of concentrating on a single weekend, they pushed for month-long deals or divided into smaller sales events during the season. 

These companies, which have many shoppers visiting their brick-and-mortar stores, worked to offer a safer shopping experience. 

The main changes from brick-and-mortar retailers during Black Friday 2020 included: 

• longer opening hours, 
• limiting the number of shoppers per store, 
• promoting curbside pick-up
• making deals available for several days to avoid in-store congestion. 

Walmart, for example, divided Black Friday 2020 into three separate events and opened their stores at 5 am during these events. As a result, the campaign was called “deals for days.” 

So, the reality is that big Retailers are moving away from Black Friday, but not because of corporate social responsibility. Instead, they are moving away from Black Friday to reduce the risk of a single concentrated event which has become a logistical nightmare. 

How big are Singles day and Prime Day?

Short answer: they are huge, and they keep growing.

In 2020, all the major players involved in these events broke records in terms of gross merchandise value and the number of products sold. 

During Single’s Day 2020, Alibaba and JD.com made more than $115B in revenues, with Alibaba making $74B (+26% vs. 2019) and JD.com making $41B (+33% vs. 2019). At the height of the event, a record number of 583k orders per second were recorded. 

Yes, you read these numbers correctly. In 2020, these two companies alone generated more volume than the entire US Retail thanksgiving weekend 2020 combined! 

During Prime Day 2021, which was held at the end of June, Amazon totaled $11.9B worldwide, up 7.6% from 2020. To give a sense of the event’s magnitude, the company founded by Jeff Bezos shipped more than 250M items during Prime Day 2021.

In other words, the global volume for Prime Day 2021 was almost 2.5x as big for Amazon as thanksgiving weekend 2020. Very few companies can create a global mega-sale event of their own and make it even bigger than Black Friday. 

Despite the environmental and health concerns, 2020 Mega-sales events broke records worldwide. 

One could even argue that despite a slight decrease in foot traffic in 2020 due to the pandemic, Black Friday and other mega-sales events are bigger than ever.

And forecasts for 2021 predict an even higher volume as consumers are flocking back to the stores.

But if we consider searches related to Black Friday, keywords related to sustainable black Friday alternatives are increasing sharply. 

According to Semrush, online searches for “shop sustainably” and related terms grew by an average of over 650% between 2020 and 2019. 

It seems that consumers are more interested than ever in looking for Black Friday Alternatives. So, what can consumers do?

Brands are offering Black Friday alternatives to answer consumer interest in sustainable shopping.

It’s clear that when consumers start to care about something, brands follow. 

A 2019 survey from Hotwire found that 47% of internet users worldwide claimed to have switched to a different product or service because the company that made them violated their values.

In this sense, brands worldwide embrace the rising consumer interest in Sustainable Shopping, which illustrates a significant shift in consumer behavior. 

To attract a more environmentally conscious consumer, certain brands are launching Black Friday alternatives. 

Some of these alternatives can be considered as pure green-washing campaigns. 

Companies are readjusting their strategies instead of competing during Black Friday, which is a logistical nightmare and has high traffic-acquisition costs. 

Some companies argue it’s driven by a mission to stop hyper-consumerism as flash deals often lead to rushed purchase decisions. 

But these companies are not stopping sales. They are making longer, less aggressive deals, benefiting their bottom line while getting great PR

True hardcore sustainability stems from only buying what we need and then making good use of it for as long as possible. 

This makes it challenging to balance the temptation for increasing sales with taking environmental actions.

We have selected a few alternatives that seem to stick true to the core values of retail sustainability: environmental and social responsibility.

5 Black Friday alternatives to empower ethical shoppers

First and foremost, we understand the best alternative to black Friday is simply to not purchase anything during that period. 

But since it is just before the holiday season, chances are you are looking for gifts to give, or maybe for items you need.

Here are what we think are the Black Friday Alternatives for sustainable shopping available today. If you have any other, don’t hesitate to tell us! 

1. Buy Nothing Day

As we just said previously, an authentic hardcore approach to sustainable shopping would be to boycott Black Friday entirely. And not just Black Friday, but all mega-sales events during the year which promote hyper-consumerism.

In this sense, the most obvious alternative to Black Friday is simply to buy nothing on that day.

This movement was born in 1992 in Vancouver, Canada, which has since spread to multiple countries in Europe and America. 

On their website, they argue that “The simplest way to celebrate is, of course, to avoid making any purchases on the day. That means dodging the Black Friday sales, no quick trips to the grocery store, no online purchases, etc. “

The passive approach is simply to buy nothing on Black Friday. Still, the Collective has since taken a more militant approach to organizing protests to draw attention to overconsumption.

They have organized credit card cut-ups, where participants stand with scissors on shopping malls, cutting credit cards as a sign of protest. Another creative form of protest is what they describe as the zombie walk, where participants wander around in stores with a blank stare.

2. Recommerce: making retail circular 

Recommerce or Reverse Commerce is a significant trend impacting Retail today. It can basically be summed up as purchasing (or selling) second-hand items. 

Over the past years, certain online players have grown tremendously by allowing customers to sell or purchase their second-hand items. 

Within the fashion industry, players like Vinted or Vestiaire Collective in Europe have demonstrated the true potential of second-hand fashion.

In other industries, some players have taken reverse commerce to the next level. Companies like Craigslist, LeBonCoin in France, or Wallapop in Spain allow millions of transactions of second-hand items from almost any kind.

Finally, other companies have taken full advantage of the refurbishing business model to offer a second life to pre-used items.

A company like BackMarket offers refurbished electronics items to tackle waste in the electronics industry. 

In the car industry, companies like Carvana, Cazoo, or Kavak are refurbishing used cars to extend their life and offer a more sustainable alternative to buying new cars. 

The concept of ReCommerce is not really something new, but with the help of technology, it can reach new heights. 

Sin 1989, the concept of ReCommerce was already at the heart of protests and support songs. 

In the words of Pete Singer in his song to support environmental policies in the city of Berkley in 1989: “If it can’t be reduced, reused, repaired, rebuilt, refurbished, refinished, resold, recycled, or composted. Then it should be restricted, redesigned, or removed from production.”

3. Brands donating proceeds during Black Friday

Eco-friendly veterans, Patagonia, have long fought against the linear economy. Instead, they design products using recycled plastic and repair and resell used goods to stop them from landfills. 

Patagonia was a pioneer in pushing back against the consumerism of Black Friday. Their viral campaign told consumers “Don’t buy this jacket” back in 2011, reminding people only to buy what they needed.

Five years later, Patagonia notoriously committed to donating 100% of their Black Friday sales to grassroots environmental organizations worldwide, which ended up being $10 million, over five times their original estimation. 

Patagonia has been involved in these kinds of actions for a long time. The founder of Patagonia, Yvon Chouinard, and the founder of Blue Ribbon Flies, Craig Mathews, started the 1% for the Planet initiative back in 2002. 

The initiative aims to prevent greenwashing and certify donations that effectively go to protecting the environment. The 1% for the Planet certification is given to businesses and individuals that donate 1% of annual turnover or salary to environmental causes

4. Brands closing stores and telling consumers to #OptOutside

Another outdoor goods manufacturer, REI, has also been battling Black Friday for many years now. 

They close their stores so that their employees can spend the day after Thanksgiving with their families and encourage shoppers to join in the #optoutside campaign. 

The idea is to spend this mega sales day enjoying the outdoors instead of giving in to the temptation of compulsive shopping. 

Even if the campaign was initially created for Black Friday, the #OptOutside hashtag has been used frequently on Instagram with over 18M posts. 

Another brand that took a decisive stance against Black Friday is the US skincare brand Deciem. 

During Black Friday 2019, the company closed all its stores and blacked out its website with a message saying: “We no longer feel comfortable being involved in a single day so heavily focused around hyper-consumerism.”

The brand became known for its stance promoting slow shopping, making less aggressive deals during more extended periods to remove the element of time pressure. In turn, they argue their customers have time to shop more mindfully.

5. Make Friday Green Again Collective

As a response to the environmental impact of Black Friday, there are also European initiatives like the Make Friday Green Again collective. 

The Collective is a group of 400+ retailers and e-commerce players in Europe committed to making Black Friday environmentally friendly. The movement is the brainchild of Nicolas Rohr, one of the co-founders of eco-friendly clothing company Faguo. 

All members decided to opt-out of Black Friday discounts. These encourage consumers to buy on impulse instead of what they need. 

Instead, their campaign aims to make consumers think about their clothes’ environmental impact during their whole life cycle. 

Their message was to use Black Friday not to shop but rather as a day to review our closet to see what we can still use, recycle, repair, or resell. 

This way, we make sure we extend the life of our existing clothes before giving in to the temptation of significant discounts. 

Many of the brands that collaborate with them are moving from fast to “slow fashion” or “slow shopping. They educate consumers to buy fewer items but of better quality and more responsibly made.

There is an undeniable rising interest in sustainable shopping. With more and more consumers asking questions about what they’re buying, who they’re buying it from, and their values, retailers can benefit from taking note.

Nevertheless, it is also clear that Black Friday and other mega-sales events are still a massive deal for the global retail industry. 

Some brands are making small, superficial efforts to make their overall campaigns more sustainable to answer consumer demands. Other smaller, more militant brands are taking measures to the next level to educate consumers and boycott Black Friday. 

Only time will tell how consumer interest varies over time and if the rising critics to mega-sales events make Black Friday finally stumble. 

Do you want more insights into E-commerce, Omnichannel Retail, and Digital Transformation? Subscribe to ApocalypseRetail to get insights sent directly to your inbox. Our content is designed for top business schools, retail managers, and eCommerce entrepreneurs who want to survive in the ever-volatile retail industry. Subscribe to our newsletter to join the fight against the Retail Apocalypse!

The post Is Black Friday Dead Yet? Here are Black Friday Alternatives to Empower Ethical Shoppers appeared first on Apocalypse Retail.

Today, more and more established product brands bypass traditional distribution and take a shorter route to put their products directly in consumers’ hands. 

In particular, Consumer Product Goods (CPG) brands and Fast-Moving Consumer Goods brands are growing their share of direct-to-consumer sales. 

To explain this, one could argue it’s only about profitability, but as we’ll explain in this article, there’s much more to it.

Starting with detailed definitions of DTC, CPG, and FMCG, we’ll then dive in and explore why DTC is an excellent strategy for brands dealing with CPG or FMCG. 

By explaining this strategy, we’ll cover how the growth of direct to consumer is one of the root causes of the Retail Apocalypse.

What is Direct-to-Consumer, DTC or D2C? 

Direct-to-consumer is a retail strategy that brands can use to access consumers directly, without going through distributors. 

These distributors can be online or offline, but they will generally take a margin to sell the products in exchange for their services and access to consumers. 

In a direct-to-consumer business model, a brand will control the entire purchasing experience with the customer without any middlemen or distributors. 

Direct-to-consumer can also be referred to as DtC, DTC, or D2C.

What is the difference between DNVB and DTC?

You’re likely familiar with Peloton, Bonobos, Dollar Shave Club, or Casper. 

Who hasn’t thought about sampling the five pairs of glasses Warby Parker allows consumers to try before buying?

Whether you need designer glasses or a fresh razor to show up in your mailbox, these digital native vertical brands (DNVBs) offer textbook examples of how DTCs should operate. 

DNVBs are products of the digital age and, by definition, are DTCs. In other words, DNVBs are just direct-to-consumer companies born in the digital age. 

Here’s how a DNVB model starts:

• Born on the internet
• No initial brick-and-mortar storefront 
• Source products directly
• Sell products directly to consumers
• Uses technology to scale 

Unlike traditional retail businesses, DNVBs control everything about product distribution in a vertically integrated company. So, to sum it up, it’s Direct-to-Supplier and Direct-to-Consumer or D2SD2C if you like to shorten words.

Today, instead of solely describing a method, the term DTC defines a specific distribution channel. In this case, DNVBs are part of the DTC business, but they do not stand alone in the DTC space. 

More and more established brands are joining the DTC party!

What are Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG)? 

Let’s start with the basics: do you eat Oreos or Pringles? or have you purchased toothpaste, deodorant, or dog food? 

All of these are classic examples of consumer packaged goods (CPG), but only some are examples of fast-moving consumer goods (FMCG)

Overall, you could use the same term in retail, but if you want to get technical, the main difference is the purchase frequency. 

FMCGs are technically a subset of the CPG category. However, FMCGs are, by definition, consumer products that are purchased with a relatively high frequency as consumers use them every day. 

Great examples of FMCG are toothpaste, potato chips, or shampoo, which are products that consumers tend to repurchase frequently for daily consumption.

On the other hand, CPG includes a broader scope of products with a short shelf life but is not as fast as FMCGs. 

For most people, these two categories include the same types of products, and the only nuance is in how short is the shelf life.

CPGs and FMCGs include products consumers use every day and need to restock regularly, including the following categories:

• Food items
• Beverages
• Cleaning products
• Personal care items
• Over-the-counter drugs

From a retail standpoint, CPG and FMCG products have a few characteristics:

• High volume
• Short shelf life
• Low price per unit with low contribution margins per unit
• Low engagement and effort to choose the product
• High repurchase frequency

The Growth of Direct-to-Consumer Removes the Toll of Middlemen in Traditional Retail Distribution

In a nutshell, every CPG or FMCG goes through a similar process. 

These products go through multiple channels before consumers ever see them on a store shelf. 

Here’s what the CPG supply chain looks like:

1. Manufacturer
2. Importer
3. Distributor / Wholesaler
4. Retailer
5. Consumer

The path from the brand to the consumer reads like a long and winding road. 

Eventually, products will get to the consumer, but many middlemen are involved in the journey. 

Of course, you have to consider that every middleman in the process takes a cut of profits, reducing margins for brands. 

This is where direct-to-consumer increases margin by streamlining the entire process. 

When a brand moves away from the traditional third-party method of getting products to the marketplace, they eliminate all middlemen involved. 

1. Manufacturer
2. Own Store (online or offline)
3. Consumer

As you can see, you’ll find no middlemen as products get to consumers directly from the manufacturer via the brand’s own store network.

Today’s Consumer is Ready for a Direct Relationship with Brands

DNVBs do many things right, but their obsession with the consumer’s experience is an area that established brands are looking at closely. 

Modern consumers have much broader access to brands thanks to online shopping and technology. 

The modern consumer is omnichannel in their behavior, meaning that they jump seamlessly from one channel to the other.

In this sense, the traditional retail experience is not enough to attract consumers and generate long-term retention.

Consumer values continue to evolve, along with their expectations. And today’s consumers value convenience and unique experiences more than anything.

So, to make them happy, brands should strive to reach consumers in every channel and offer them a unique experience to ensure repurchase. 

Customer studies, focus groups, and other types of market research cannot substitute for regular real-world consumer interactions.

In a more traditional retail distribution approach, CPG and FMCG brands have limited interactions with customers. Instead, it’s the retailer that develops a direct relationship with consumers through its distribution network. 

In other words, brands are removing the middlemen, the big box stores, the discount department stores, or the hypermarkets. 

By creating a direct relationship with consumers, brands get first-party high-value data to deliver value to each unique consumer. This is the foundation of a 360 view of the customer.

E-commerce is Paving the Way for the Growth of Direct to Consumer

We’re no longer living in the dawn of the digital age. 

Companies that haven’t embraced the power of digital channels are missing out on a new kind of relationship with consumers. 

It’s no longer about having an online presence. 

Having a website is not just about brand awareness and storytelling. Most brands realize that their websites are a powerful tool to build a direct relationship with their customers.

In this sense, brand websites are becoming their online store-fronts to interact and engage directly with their customers. In other words, brands are building an omnichannel engagement strategy.

Not only because brands have built their e-commerce stores, but also they have started selling through online marketplaces. 

Marketplace commissions are a fraction of the margins that traditional retailers take when selling to consumers. 

So brands can sell through online marketplaces and increase their profits, even if they don’t own the relationship with the customer.

In the old model, a brand company needed brick-and-mortar stores to reach consumers. The retailer, who played the gatekeeper, controlled what brands and products they allowed shoppers to buy. 

The physical store became the focal point, which meant the retailer, not the brand, owned everything about the consumer’s shopping experience. 

Through the help of e-commerce, brands are embracing the growth of Direct-to-consumer to control the entire narrative. 

Direct to Consumer is a Smart Move for CPG and FMCG Brands 

There is an undeniable advantage for any brand of cultivating a relationship with end-consumers. By focusing on gathering data from customer touchpoints, a brand can better understand its customers.

According to a study from Brandshop, 88% of consumers prefer buying directly from a brand if they are given the option. 

Consumers expect an engaging shopping experience when they buy from the brand’s online store and physical stores.  

But for CPG and FMCG, there is a strategic advantage to growing their D2C business. 

When they cut out the middlemen, they take away their tolls and increase their margins. 

Sourcing products directly from the manufacturer and selling them directly to consumers can significantly increase their margins. 

Those additional margins mean a CPG or FMCG brand can invest more in marketing than they could if they remained tied to regular retail distribution. 

These brands can increase their customer acquisition costs, as they have all the data they need to understand their customers and increase their lifetime value. 

In turn, a higher lifetime value pays for the increase in customer acquisition costs.  

It is no coincidence that CPG and FMCG brands are embracing the growth of direct to consumer. 

As we’ll see below, some of the most established global brands like L’Oréal, Adidas, Nike, Unilever, and Nestlé are investing massively to scale their D2C business. 

These brands alone expect to generate more than 50% of their revenues from DTC by 2025, if not sooner!

In summary, a DTC business model improves the following aspects for brands:

• Increase revenue
• Increase gross margins
• Minimizes the brands’ dependence on third parties
• Allows deeper relationships with consumers with higher lifetime value

That last point is what drives the success of digitally native vertical brands. 

The Growth of Direct to Consumer is Impacting Traditional Retail 

When a CPG brand moves to market directly to end consumers, there are many clear advantages. 

However, there are multiple casualties in the process. As you guessed, those casualties are the middlemen or traditional retail distributors. 

Traditional retailers are watching their entire business model crumble. 

More than 135 big retailers have filed for bankruptcy since 2015 in the great Retail Apocalypse. Of course, the impact of the Covid19 pandemic accelerated the end of traditional retail, but it’s not the root cause of the Retail Apocalypse. 

These companies built their entire business model upon being the point of distribution between brands and consumers. 

If consumers go right to the source and purchase directly from brands, it means they’re not buying from retailers anymore.

Here’s something else suggested by a 2018 study of DTC models—manufacturers no longer send their hottest new products through retail channels. Instead, they reserve those hot commodities for their direct-to-consumer channels. 

This is a process called selective distribution, in which brands keep the best products within their D2C channels. 

So, if traditional retailers want to survive the Retail Apocalypse, they must lose their dependency on branded products. 

They can either start their private labels and implement a direct-to-consumer approach. Or they can build stronger relationships with customers by offering better retail experiences so that customers continue to purchase from a distributor. 

We’ve discussed DNVBs as an example of D2C, but the growth of Direct to Consumer is everywhere in retail. 

Many established retail brands are investing massively to develop their DTC business. 

Five Examples of Established Brands Embracing the Growth of Direct to Consumer 

Established brands moving to DTC channels include both big and small players. As we’ve said before, embracing DTC channels is a brilliant move for brands.

Here are five established brands that are taking full advantage of the growth of direct to consumer business: 

L’Oréal 

L’Oréal is a global hair and skincare company with many top-of-mind brands. 

The company owns brands like its namesake brand L’Oréal Paris and some global brands like La Roche-Posay, The Body shop, Biotherm, Lancôme, or Garnier. 

L’Oréal is also dedicated to continued expansion in the DTC market. Currently, the brand offers consumers tools designed to help them customize makeup colors online. L’Oreal is also committing to market on Amazon due to the platform’s status as the beginning point for consumers to shop for cosmetics.

L’Oréal is massively investing in its e-commerce infrastructure. In a 2020 interview, former CDO Lubomira Rochet said the company went from zero to 25% of sales from e-commerce since 2010. 

The company has also set a very ambitious target to reach 50% of e-commerce sales by 2023. 

This is a really impressive share of sales to reach in such a short time.

Nike 

Everyone knows Nike. It’s the world’s largest sports brand and is not precisely a CPG brand, but it perfectly fits this list.

By the end of 2020, after a year in a global pandemic accelerating the retail apocalypse, Nike is thriving, and its share price hit an all-time high.

Over the last years, Nike has implemented a “Consumer Direct Offense” strategy, moving from third-party retailers to having a direct-to-consumer approach. 

Nike’s strategy is summed up in the following lines:

• Cut back on wholesale distribution and raise the bar for brand experience with wholesalers, which remained in the network. 
• Invest massively in content on digital channels
• Focus on community building with native Apps
• Deploy customization, data analytics, and logistics  

In 2020, Nike generated 35%, more than a third of its revenue, from DTC. This share is up from 15% back in 2010. Now that is a steep acceleration! 

Adidas 

The second-largest sports brand in the world refuses to be left behind by competitors such as Nike. 

Adidas has set up a strategy to generate half of its revenue from DTC by 2025. This threshold is no easy task, but the brand is investing massively to get there.

The brand has set its sights on doubling e-commerce sales and strengthening its data analytics and loyalty programs. Adidas also promises to refocus on women’s apparel and recently announced a new supportive activewear line designed for women.

Overall, the brand is trying to catch up with the DTC strategy implemented by its largest competitor.

Unilever 

Unilever is one of the world’s largest CPG producers within different categories, from food to cosmetics. 

Among the major brands from Unilever, they own Dove, Q-tips, Lipton, Tresemmé, Knorr, Maille, Hellmann’s, Magnum, or Ben & Jerry’s. 

In 2016, Unilever wowed the world with their $1 billion acquisition of DNVB Dollar Shave Club in the U.S. This acquisition marked a complete strategy of moving into the direct-to-consumer arena from razors to mustard. 

Speaking at a conference, Unilever’s former CMO stated that “Direct to consumer – whether that be content or direct-to-consumer sales – has changed significantly. The opportunity for a company like ours to serve consumers directly is very exciting.”

Nestlé

Along with Unilever, Neslé is one of the biggest CPG producers globally, from food to cosmetics. 

Nestlé owns some of the most influential brands like Nespresso, Nescafé, Gerber, Nesquik, Perrier, San Pellegrino, Nestea, Kitkat, or Purina. 

Nestlé has made two significant acquisitions in the last couple of years, signaling their intent to move into DTC, especially in e-commerce. 

With the acquisition of the U.S. meal delivery company Freshly in 2020, Nestlé moved to have a “better understanding of what and how people eat at home.” You value collecting data in a DTC strategy, considering that Neslé paid $950m for Freshly. 

Continuing in this move, in February 2021, Nestlé completed the acquisition of SimplyCook, a U.K. recipe kit company. 

Do you want more insights into E-commerce, Omnichannel Retail, and Digital Transformation? Subscribe to ApocalypseRetail to get insights sent directly to your inbox. Our content is designed for top business schools, retail managers, and eCommerce entrepreneurs who want to survive in the ever-volatile retail industry. Subscribe to our newsletter to join the fight against the Retail Apocalypse!

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Every retailer, whether online or offline, must deploy an omnichannel strategy to unlock the full value of the omnichannel customer.

The goal of an omnichannel strategy is not simply having an online and a physical store. It is providing a unified and consistent experience across touchpoints in the customer journey to increase customer retention.

Over our last posts, we’ve covered in detail the five pillars of an Omnichannel Strategy, but we’ll do our best summary on this post. 

These are the Five Pillars of an Omnichannel Strategy

A bulletproof omnichannel strategy requires addressing the five pillars of Omnichannel Retail.

The five pillars of Omnichannel Retail are:

1. Omnichannel 360º View of the Customer 
2. Omnichannel Customer Engagement
3. Omnichannel Fulfillment & Logistics 
4. Omnichannel Product Offering, and Merchandising
5. Omnichannel Backoffice: Finance, IT & HR

A company must understand its customers and their journeys deeply, which can only be achieved with a 360º view of the customer across all their company touchpoints.

Once the company has built this view of the customer, they can start deploying the following pillars. 

They can build an Omnichannel customer and content engagement strategy to offer excellent customer experience and scalable personalization.

Then, with an omnichannel fulfillment strategy, the company can offer fulfillment options to meet the customer when and where they want.

To complete this, with an omnichannel product offering strategy, a company builds trust with its customers. 

Finally, an omnichannel back-office structure ties everything together with the proper organization, systems, and structure for omnichannel retail.

After this recap, it is essential to understand that an omnichannel strategy implies a complete transformation of the company.

The Omnichannel Transformation Must Be Met At Every Level Of The Company

We’ve discussed the need to implement an omnichannel back office for companies that want to survive the retail apocalypse.

We’ve discussed a complete change in the culture, organization, technology, and KPIs. 

The final step is that a company must make sure that the transformation happens at every company level. 

From top to bottom, every single company employee must be aligned with the omnichannel vision and have the right processes, technology, and metrics to deploy it. 

The problem is that, according to research, most retailers fail to cover these last steps. As a result, they fail to implement the omnichannel back office, despite the management having the right vision.

As the poll among retail professionals suggests, most retail company CEOs and C-level have understood the need to implement an omnichannel strategy.

But only about half of professionals believe they have the right processes, technology, and metrics to implement the strategy.

Companies must understand that management and vision will only get them so far. 

If they don’t implement the proper omnichannel back office, they won’t lead the company towards a true omnichannel strategy.

Six Steps To Implement An Omnichannel Strategy in Retail

We have provided over a dozen posts explaining the need to implement an omnichannel strategy.

In each post, we have provided detailed guidelines covering the five pillars of an omnichannel strategy. 

When we advise companies on their omnichannel transformation, we find it very helpful to sum everything into six steps every company must follow. 

1. Build a deep understanding of your customer
2. Gather, unify and structure your data
3. Build a detailed map of your customer journeys
4. Build your own omnichannel roadmap
5. Establish OKRs aligned with your omnichannel roadmap
6. Continuous improvement

1. Build a Deep Understanding of Your Customer: A 360 View Of The Customer

Deeply understanding your customer is the foundation of an omnichannel strategy. 

A company must understand who their customers are, how they shop when they buy, and what channels they use?

In the end, they need to understand what is the number one reason why customers buy from them.

2. Gather, Unify and Structure Your Customer Data for Scalable Personalization

Companies must bring the total value of their first-party data. Therefore, they need to have a customer data-gathering strategy across channels. A loyalty program is handy for this.

On top of gathering customer data, they need to structure and unify all the data and connect it to the right content. 

The end goal is to provide relevant, meaningful interactions with customers at every step of the journey.

A Customer Data Platform, Data Management Platform, and Digital Asset Management solution are IT tools that can make the whole process scalable. 

3. Build a Detailed Map of Your Customer Journeys

Once the company clearly understands their customers and has analyzed the data, they can build detailed maps of their customer journeys.

Customer journeys identify behaviors and patterns that will improve the chances of a visitor becoming a shopper. Or a shopper becoming a regular customer.

A detailed map of the customer journeys helps provide the right interactions for customers. The company sends the right messages to move the customer closer to a transaction at every step of the trip.

For this, you must answer questions about your customers and the channels they use to engage with your company:

• What is the number one reason a customer buys from you instead of your competition?
• How do customers discover your brand?
• Ho do they research your producs or services?
• What channels or touchpoints do they use?
• How often do they make a purchase ?
• How much does it cost to acquire a customer, and how profitable are they?
• Would the recommend or refer you to their friends?

4. Build Your Own Omnichannel Roadmap

Every single company will have a unique omnichannel roadmap according to its context and resources.

They will need to assess which features they lack regarding customer engagement, fulfillment options, product offering, and BackOffice.

They can design a roadmap to tackle each of these features in terms of investment and the resources they require. 

To build the roadmap, we generally advise two things:

1. First, organize tasks on what can be done now, in twelve months or three years. Some tasks will require significant resources, so this helps companies focus on quick wins without skipping longer tasks.
2. Second, focus on existing customer pain points rather than providing new experiences. Before launching a shiny new experience, companies should focus resources on ensuring that existing channels provide a great experience. 

5. Establish OKRs Aligned with Your Omnichannel Roadmap

Management by Objectives and Key Results is one of the best methodologies to ensure that all teams are aligned.

Once you have designed your omnichannel roadmap, ensure that your entire organization is focused on deploying that roadmap and measuring the positive effects it generates. 

This methodology helps teams prioritize projects and focus on the right objectives. 

6. An Omnichannel Strategy Reuires Continuous Improvement

As you continuously gather data and analyze your customer behavior, you can constantly improve your omnichannel experience. 

An omnichannel strategy is not just something you deploy once and forget. It’s a process to continuously make changes in the customer journey according to the customer’s context.

With this process, companies can quickly identify changes in consumer behavior and adapt to them. In turn, they are providing the best possible customer experience.

Adding value to the customer experience is a continuous improvement process. If you don’t keep on improving your processes, your competitors will.

In today’s retail, this is the key to surviving the retail apocalypse.  

Do you want more insights into E-commerce, Omnichannel Retail, and Digital Transformation? Subscribe to ApocalypseRetail to get insights sent directly to your inbox. Our content is designed for top business schools, retail managers, and eCommerce entrepreneurs who want to survive in the ever-volatile retail industry. Subscribe to our newsletter to join the fight against the Retail Apocalypse!

The post Six Steps to Deploy an Omnichannel Strategy to Survive the Retail Apocalypse appeared first on Apocalypse Retail.

People often assume that an omnichannel strategy depends entirely on digital channels. But this completely misses the real value of the physical store in an omnichannel strategy.

As we said in one of our previous posts, Omnichannel is one of the most frequently used buzzwords in retail today.

But, the reality is that a true Omnichannel strategy for traditional retailers is not launching a website and selling online. Or, if you are a pure player, opening a physical store doesn’t make you an Omnichannel company.

Selling online or offline are just traits of a Multichannel strategy.

A Multichannel strategy is where a company meets the customers where they are, whether on their website, social media, email, or physical stores. 

The key difference with an Omnichannel strategy is the consistency of the customer experience. 

An Omnichannel strategy unifies a consistent customer journey across every single channel. 

Let’s cover again why all retailers need to implement an omnichannel strategy.

An Omnichannel Strategy is Needed to fill the Existing Friction of the Mobile Experience

A lot of e-commerce pure players can see exponential growth during the years. This has led some to believe they can be pure online players indefinitely.

But if we look closer at those e-commerce players that are a bit more “senior,” most have started opening physical stores.

Amazon and Alibaba, the world’s e-commerce juggernauts, have aggressively expanded offline. Even some Digital Native Vertical Brands (DNVB) have jumped offline in recent years. 

The reality is that even if online retail penetration is growing fast, the offline part of the market is still huge. 

As Jeff Bezos put it in a letter to Amazon shareholders back in 2019:

“Amazon today remains a small player in global retail. We represent a low single-digit percentage of the retail market, and there are much larger retailers in every country where we operate. And that’s largely because nearly 90% of retail remains offline, in brick and mortar stores.”

Even if we consider that a quarter of global retail sales will be online by 2030, that still lets 75% of transactions offline. 

So what is slowing online retail penetration?

Mobile sales are lagging relative to traffic share.

Today, everyone and their mother has a smartphone. Both in developed countries and emerging markets, most adult consumers have a smartphone.

And they use those smartphones to go online to research and discover products or information. Or to chat or browse on social media.

As of 2020, mobile visitors represent almost two-thirds of global online traffic. But the problem is that it only represents 43% of global online transactions. 

There is a clear drop in transactions relative to traffic.

Mobile conversion is also lagging relative to other devices.

Image Source: Apocalypse Retail 2021. Why do Retail companies need to implement an Omnichannel Strategy? Bernstein E-commerce Outlook September 2020

The drop in transactions relative to traffic is essentially due to much lower conversion rates than other devices.

If we deep dive by device, mobile conversion rates are meager compared to other devices. And this trend has been sustained for almost a decade.

Let’s compare conversion rates between devices from 2013 to 2019. In both years, conversion rates are almost 3x lower than desktop and 2x lower than tablet conversion rates.

Indeed, smartphone conversion rates improved more during that period than the other devices. But mobile conversion rates remain way too low.

The reality is that most websites are not designed for mobile-first. 

Most websites are designed for a larger, easier-to-use desktop screen. And when users try to use it on mobile, it doesn’t respond in the same way.

The hard truth is that the mobile user experience is very hard to improve. At least to reach the same conversion rates as other devices. 

So there will continue to be friction in the mobile customer journey which affects almost two-thirds of all online visitors and rising.

But how does mobile fare compared to the physical experience? 

Customers still prefer in-store experience compared to mobile.

If the mobile experience is worse for purchase than other devices, the same can be said compared to physical stores. 

Mobile traffic has increased exponentially, but the shopping behavior still favors offline stores. 

Customers prefer to discover and shop for products in offline stores. Most product discovery is still offline, and customers will do most of the research on mobile devices.

In the end, even if mobile transactions are on the rise, most customers still prefer to shop offline. 

The reality is that the physical experience offers something unique.

The value of the physical store and why all retailers must implement an omnichannel strategy

The Physical Store has a Unique Value Proposition 

The most bullish e-commerce advocate will say that the physical store is dead. But when we started Apocalypse Retail, we were convinced this statement is wrong. 

We don’t mean to give false hope to traditional retailers. 

A lot, if not most, of legacy retailers, will perish in the Retail Apocalypse. But this doesn’t mean the end of brick-and-mortar Retail. Instead, it means the end of legacy brick-and-mortar Retail.

When analyzing online and offline retail customer journeys, it is clear that companies don’t have to choose between one or the other. 

Both have entirely different value propositions. 

The online experience offers convenience more than anything while the offline experience offers… the physical experience. 

The offline experience offers human interaction, touching, trying on, seeing, smelling a product. These are all real, value-added experiences that profoundly impact customers.

The physical store has a unique value proposition that is not going to disappear. 

The physical store must reinvent itself.

Most legacy retailers have been overconfident about the value of the physical store. And this has led them to keep using the same brick-and-mortar strategies that worked for the past 30 years. 

But by doing so, they have been ignoring a massive shift in consumer behavior. 

Consumers crave convenience more than anything. And the online experience is built to provide consumers with convenience. 

The physical experience, by definition, requires a physical effort. So the physical store will never be able to compete in terms of convenience.

To survive the Retail Apocalypse, the store must reinvent itself. The physical store must be built and designed on everything that won’t be able to be provided online. 

The unique value proposition from the store is its core strength. 

As we said before, physical stores offer human interaction, touching, trying on, seeing, smelling a product. Retailers that understand this will change the way they approach physical stores.

But unfortunately, legacy retailers still approach the physical experience as they’ve always done. They continue looking at the store as a point of sale measured in terms of Sales/m2.

This completely fails to understand that customers are not exclusive to single-channel journeys. Retailers try to cram as much stock as possible in stores to maximize profitability per m2. 

But a physical store is, above everything else, a customer touchpoint. And thus, it should be treated as a marketing channel. Marketing in the sense that it should be designed to attract visitors.

Whether the visitor completes the purchase online or offline is irrelevant. It should be a seamless customer journey. 

The physical store provides a showroom where the customer can get everything they can’t get online. The whole package to try, test, and experience the product.

The rest of the journey will always be more convenient online. So, stores must be built and designed to maximize the customer’s physical experience. 

Pure Players are Jumping Offline with a Different Approach to the Physical Store

As we said before, most e-commerce pure-players are jumping offline once they reach a certain point. 

Amazon, for example, has invested massively in its offline expansion. Not only the Whole Foods acquisition but opening multiple Amazon Go stores with connected carts.

But the approach to physical retail is completely entirely different from the one used by traditional retailers. 

Off-course, e-commerce players are looking to increase revenues when they jump offline. But this is only part of the offline strategy. 

The offline strategy from e-commerce players is built on two things:

1. The physical store is a data acquisition channel
2. The physical store is a marketing channel

1. The Physical Store as a Data Acquisition Channel

Amazon is one of the best examples of this strategy. 

Imagine you have one of the most powerful customer-data-gathering empires in the world. But this empire is built exclusively for online transactions.

As Jeff Bezos stated, Amazon only represents a fraction of the entire Retail market. And almost three-quarters of all retail transactions will still be done offline by 2030. 

So even if they perfected an online data-gathering platform, Amazon “only” has access to a small part of the customer journey. 

Now, imagine tracking a customer in your offline store with the same level of detail you can track them in an online store. 

Knowing which products they viewed, which ones they added or removed to their cart, when they entered or left, etc. And connect this offline data with the online data you already have of the same customer. 

The potential to have an accurate 360º view of the customer is limitless. 

This is the way a company can offer relevant, consistent content across channels. And increase their customer retention rates, revenues, and profitability in the long run.

This explains why Amazon is aggressively expanding offline and, as of 2021, the company already operates more than 600 physical stores in the US.

2. The Physical Store as a Marketing Channel 

E-commerce pure players much smaller than Amazon are also opening stores. 

DNVBs such as Casper, Bonobos, or Le Slip Français in France have opened physical stores. But they have centered the entire offline experience on everything that their online stores could not offer. 

The stores are designed as showrooms that offer a consistent value proposition to customers. 

In the same way that these brands have disrupted their consumer categories, they are doing the same thing for offline retail. 

For a DNVB, the physical store is, above all, a marketing channel. And they will treat it with the same data-driven approach that they use for every digital marketing channel. 

The end goal of physical stores is to acquire more potential customers and raise brand awareness.

If the visitor converts offline, it’s a win-win, but if the visitor at least gives their contact info, it’s also a win. 

They have just captured a lead. And they will use their deep understanding of the digital funnel to try and convert that lead into a customer. 

In the end, it’s all about making sure that the Lifetime Value (LTV) of the Customer is higher than its customer acquisition cost (CAC). 

If the CAC also includes the cost of a physical store, it’s because these brands are betting the LTV will also be higher. 

DNVBs have understood the fundamental truth about Omnichannel Retail: The value provided by a unified customer experience across channels is greater than the sum of its parts. 

Do you want more insights into E-commerce, Omnichannel Retail, and Digital Transformation? Subscribe to ApocalypseRetail to get insights sent directly to your inbox. Our content is designed for top business schools, retail managers, and eCommerce entrepreneurs who want to survive in the ever-volatile retail industry. Subscribe to our newsletter to join the fight against the Retail Apocalypse!

The post The Real Value of the Physical Store in an Omnichannel Strategy appeared first on Apocalypse Retail.

Omnichannel commerce is a critical way to give your customers a seamless shopping experience. Whether shopping in a store or online via tablet, mobile, or computer. In every touchpoint, consistency is essential. 

When shopping, it is normal for the customer to research their purchase. They may compare different models a few times across devices. 

As they research before making a purchase, customers rely on consistency to establish trust. This consistency is required on price and product offering. 

To consider implementing an omnichannel strategy, a company must address five key pillars. 

The five pillars of omnichannel retail are:

1. Omnichannel 360º View of the Customer 
2. Omnichannel Customer Engagement
3. Omnichannel Fulfillment & Logistics 
4. Omnichannel Product Offering, and Merchandising
5. Omnichannel Backoffice: Finance, IT & HR

An omnichannel product offer is one of the five pillars of an omnichannel strategy. In this post, we’ll dive into how you can build your own omnichannel pricing and product offering to meet the omnichannel customer’s demands.

But first, let’s recap the differences between multichannel and omnichannel retail.

Multichannel Vs Omnichannel

The difference between multichannel and omnichannel retail is consistency. 

Multichannel retail offers products and services across various channels. But this offering is not connected in a continuous path to purchase. 

Omnichannel retail refines the multichannel process. It creates a smooth and seamless customer journey across channels. 

Omnichannel retail allows for more accurate and better quality data collection. It also improves customer loyalty and increases traffic and sales. 

All these benefits are in addition to providing a better experience for your customers. 

The key to success with omnichannel Pricing is to know your customer. Know the behavior to expect, what they look for when researching your product, and what channels they use.

Why should retailers implement an Omnichannel Product Offer?

Humans hate to feel duped. 

Feeling like you have been taken advantage of is one of the worst feelings in human psychology. 

Customers will never forget how your brand made them feel, especially if it creates powerful emotions.

Most companies focus on creating positive emotions, but every company dreads generating negative emotions. 

Today’s shoppers have everything they need to research a product or brand in their pocket. 

Asymmetric information is used to benefit retailers, but not anymore. Today, customers have complete control over information, and that gives them significant power. 

As of 2019, consumers checked their smartphone instead of speaking to a store associate for the following reasons:

• 69% to check customer reviews on a product or service
• 58% to find comparable products or services
• 55% to check product specifications
• 53% to find deals or discounts on specific products or services

The fastest way to lose a customer is to make them distrust your brand. And you lose trust by having different Pricing and promotions across channels. By doing so, you make customers ask themselves if your brand is worthy of their trust. 

Customers do not want to spend time comparing shopping for the lowest cost product. 

Convenience ranks right up with the price in helping the consumer make purchasing decisions. 

Having an omnichannel product offering is not just a matter of building trust. It’s a matter of convenience. 

While online channels have been great for impulsive buys, it has also made research effortless. 

What is an omnichannel product offering?

An omnichannel product offering is a strategy to offer consistent content and Pricing for their products. This consistency is enforced across all sales channels. 

Consistent product content: Provide the same product description and content across channels. This content includes visual content, product reviews, and user-generated content. 

Consistent product pricing: Consistent product pricing has the same pricing strategy across channels. This is not only for regular prices, but also for promotions, discounts, and rewards for customers. 

An omnichannel product offering has a unified strategy across channels regarding:

• Pricing
• Loyalty Rewards
• Promotions
• Product Reviews
• Product Information

Ensuring that your product offering is consistent and available across all channels is a great way to keep customers happy. They should feel comfortable when they make their purchasing decisions. 

That comfort pays off with greater customer loyalty and lifetime customer value.

Multichannel retailing is a step for retailers that want to avoid the retail apocalypse. They need to understand that 21st-century shoppers are present in multiple channels. So companies must be present on those channels.

However, most traditional retailers fail to understand that shopping behavior has radically changed. Digital channels have made it easier than ever for customers to do research. 

Omnichannel retailing understands this. 

In the end, finding all the information on a product is just one google search away on the customer’s smartphone. 

Some companies don’t do it because they think it means a race to the lowest price. But you can have a higher price than your competitors if you provide additional value. 

Omnichannel retailing is not about having the lowest possible price. It is about providing additional value on a unified path to purchase. 

The problem is, most retailers still fail to understand the value of Omnichannel Product Offer. According to a panel among retail professionals about the consistency of their product offering:

• 43% of retailers have inconsistent or very inconsistent Pricing 
• 57% of retailers have inconsistent or very inconsistent Loyalty rewards
• 60% of retailers have inconsistent or very inconsistent Promotions
• 72% of retailers have inconsistent or very inconsistent Product Reviews
• 75% of retailers have inconsistent or very inconsistent Product Information

What are the Benefits of Providing Omnichannel Product Offering?

1. Building trust with the customer

The most crucial benefit of an omnichannel product offering is building trust with your customers. 

Trust is vital for long-term relationships and will yield a positive return on investment. A customer is more likely to pay a higher price for a product if they trust the brand. 

Building trust is important for any company, but it is critical for retailers.

2. Lower customer acquisition costs

When customers trust a product or brand, they are more likely to recommend it to their friends. 

Companies that implement an omnichannel product offering understand the value of word-of-mouth. Customers can be your most crucial marketing asset… if they have positive things to say about you.

Building trust not only helps you build loyal, long-term relationships with your customers. It also enables reducing customer acquisition costs as existing customers become fans.

3. Higher scalability

An omnichannel product offering also makes for easier internal processes. A consistent price and content strategy makes the product life cycle faster and more scalable. 

Consistency helps your teams avoid Pricing or content mistakes. Product teams must gather feedback from their commercial teams on Pricing. 

A consistent pricing and content strategy allows commercial teams to focus on selling the product instead of reworking content.

4. More powerful campaigns 

Consistent product pricing, promotions, and rewards across channels are crucial to powerful campaigns. It allows retailers to build consistent messages across channels. 

Most customers browse multiple channels daily. So a consistent campaign across channels highly increases the chances of customers remembering your message.

5. Better comparisons with your competitors

A retailer must keep an eye on Pricing and promotions from competitors. And it needs to keep an eye on prices across all channels. 

By doing so, the company can make adjustments to inventory and forecasted sales. 

Consistent Pricing and promotions across all channels allow for better comparisons with competitors. Having different prices and promotions on sales channels makes it very difficult to have an accurate comparison.

What is Omnichannel Pricing?

Today, customers can showroom or webroom in their customer journey. 

Showrooming is the practice of looking at something in person, then ordering it online. 

Webrooming is when a customer sees a product online and then heads to the store to purchase it. 

But a company that offers different prices across channels will lose on both customers. Customers lose faith in retailers that offer different prices across channels. 

Before having smartphones, channel-specific Pricing was less of a concern. But as customers become omnichannel, companies must also become omnichannel. 

Different prices by channel damage your reputation. And a company that continues doing it will lose the trust-goodwill from customers.

What are Omnichannel Promotions?

Building an omnichannel promotion comes with its own unique set of challenges. Most challenges come from legacy organizations not suited for an omnichannel strategy.

Silo structuring makes it challenging to create continuity across various channels. By having a transversal organization, a company ensures that all parties understand the goals and purpose of a campaign. 

Who must be included when launching a promotion? All teams from Marketing, Sales, IT, Product, Customer support, and Local store associates must be included in the discussions. 

This sounds messy, but with the right organization, it is fully scalable.

A deep understanding of your customer needs is key to launching the most efficient promotions. Companies need to gather data about their customers and understand their behavior.

For example, a promotion to gather leads from customers can help build a solid first-party customer database. 

But most retailers push this type of promotion exclusively online: “10% if you subscribe to our newsletter!”. 

This type of campaign is excellent for online lead acquisition. But the true power of omnichannel promotions lies in deploying them across channels.

Expanding this type of promotion to offline channels will increase your lead-gathering capacity.

What are Omnichannel Product Reviews?

Too often, product reviews are handled exclusively by customer service teams. But they should also be considered as a marketing tool between brands and customers. 

Social proofing represents a crucial touchpoint to build trust with customers. Product reviews must be nurtured and displayed on all channels to build a powerful reputation. A company that displays positive reviews for products and stores can see an uplift of 18% in revenues.

Product reviews are essential to provide information to customers. And companies can also receive input and have a conversation with their customers. 

Consider product reviews a vital source of data as peer-to-peer trust has a tremendous impact on buying decisions. 

The local consumer review research shows that almost 9 out of 10 customers value online reviews as they would for personal recommendations. So product reviews and social proofing are almost equal to word-of-mouth. But it is much more scalable!

Treat product reviews as the critical marketing analytics tool that they are. 

In an omnichannel approach, product reviews stay in front of the mind of the consumer. 

A negative review read online can influence an in-store buying decision. Think carefully about how you will react to negative reviews. Have a policy in place to handle them and don’t make it difficult for the customer. 

Trouble resolving the issue encourages negative comments on social media so instead, be ready to reach out personally to the customer to address the situation. 

Finally, take each negative review and learn from it. Use it to improve your product, processes, or fulfillment.

What is an Omnichannel Loyalty Program?

A loyalty program is how most legacy retailers built their customer databases. But in today’s retail, loyalty programs need to be adapted for an omnichannel strategy. 

A loyalty program where some benefits or rewards are exclusive to a single channel is a thing of the past. 

The lifetime value of an omnichannel customer is higher than the lifetime value of a customer exclusive to a single channel. This increase in lifetime value is why retailers must implement omnichannel loyalty programs.

A loyalty program offers access to special discounts, promotions, or events. These benefits must be provided on every channel. In exchange, retailers get the customer’s data. If appropriately used, this data will repay the investment in an omnichannel loyalty program.

An omnichannel loyalty program implies that it is accessible to anyone at any time. 

Rewards and benefits from a loyalty program should not be just for customers close to a store. They should be for any potential customer. 

It is frustrating to miss out on special deals and discounts as a customer because they are not in every channel. 

A company shouldn’t make its loyalty rewards based on pricing discounts only. A loyalty program should offer exclusive or early access to products or events. 

This helps build and nurture the relationship with your most loyal customers. When doing this, companies must identify their customers to track and segment their database correctly. 

By doing so, companies can identify their loyal customer’s purchasing patterns. And they can also make an effort to “reactivate” customers who haven’t bought for some time.

An Omnichannel Product Offer answers the four factors influencing a purchasing decision

Most legacy retailers have been moving into the digital space at a slow pace. However, 2020 and Covid19 accelerated the need for companies to move online. 

Unifying the digital and physical experience has become a crucial consideration. 

Customers are already used to buying online. And they expect a seamless online shopping experience. 

Delivery options and store pickup have become prevalent in today’s retail. Today’s consumers are jumping from one device to another and from one channel to another. 

Consumers today make their purchasing decisions based on four factors:

• Selection
• Price
• Content
• Convenience

Omnichannel Product Offering ensures that these factors are met on a consistent basis at every step of the funnel.  

Customers will see a consistent selection, price, and content across channels. All of this, on top of availability on all channels to provide maximum convenience. 

Trust is built by offering the same product, whether your customer is shopping online, in person, or clicking through an email. This trust removes the need to check the competition. 

There is no need to visit multiple stores and wait for price drops when there is trust. 

What are the Difficulties of Implementing an Omnichannel Product Offering Strategy?

An omnichannel product strategy isn’t easy to implement. It requires discipline and continuous improvement. 

To implement omnichannel pricing effectively, a company must have a pricing tool. 

Omnichannel Pricing is not a strategy where you set it and forget it. It is vital to have accurate forecasts and inventory management. 

From significant events, such as Black Friday, to more specific events, such as fluctuations in inventory. 

Companies need to factor in any change in competition to adapt stocks across channels. Retailers need robust operational control and suitable systems to manage omnichannel Pricing. 

But apart from the complexities, the omnichannel product offering has two main drawbacks

1. First, it consumes a lot of time and resources to be implemented. Most of the time, it requires specific skills that can’t be found in-house. 
2. And second, an omnichannel product strategy is not always flexible enough for seasonal or local shopping habits. 

In the time it takes to implement an omnichannel product strategy, companies can implement hybrid pricing. 

Hybrid Pricing implements single omnichannel Pricing, but few exceptions in specific situations. 

Hybrid Pricing is a good compromise for retailers impacted by seasonal price changes or very local consumer habits.

Just keep in mind that every difference that exists between channels is a step back to multichannel retail.

How to implement omnichannel product offering?

Here are the two main issues every company must address when trying to implement an omnichannel product offering.

Establish seamless communication across your customer touchpoints

Deciding where to offer your product can be a challenge. 

A pain point for many retailers over the past year was that they had options for getting their products to consumers. In particular, those companies that only had physical stores or relied too heavily on their physical footprint. 

Multiple sales channels allow a continued revenue stream if one channel dries up. 

When choosing channels to provide sales, you need to really understand your customers. And meet your customers when and where they are.

Companies should be easily accessible in every channel and customer touchpoint.

The primary customer touchpoints that every retailer must address include:

• Traditional brick-and-mortar stores and pop-ups.
• Sales reps in store
• Mobile or Desktop Website
• Mobile apps
• E-commerce marketplaces
• Social media platforms. 

Once you decide what channels you need to use, you must unify your marketing efforts. An advertising strategy for your products must be consistent across platforms.

If a potential customer sees an ad offering a product at one price, then receives an email offering something different, trust is broken.

Another issue is coupon codes and other promotions that don’t work correctly. An email promotion sent with an expired coupon code is a terrible experience. 

Commercial teams across channels should be aware of your campaigns to maximize their output. 

It is frustrating to go to a store and see that promotion is only available online. Or that the store associate wasn’t even aware of the promotion.

Personalize the Customer Experience

While consistency is key to omnichannel Pricing, that doesn’t mean you should treat all your customers the same. 

Segmenting your customers allows you to target each where they are most likely found. Segment by demographics such as generation, income range, online behavior, and region. 

Segmentation allows you to create specific marketing plans while maintaining your omnichannel presence. 

Once segmented, consider where each group is most likely to look for your product. For some, it may be in-store. Others may perform a Google search. Finally, some may not search for it but would be interested if it popped up on their Instagram page. 

After coming up with a plan to market to each segment, think of every step of the customer journey. 

Should you have a feature to sign up for email offerings on your website? Or have a banner at the entrance of your store?

The customer journey is not a straight path. Customers move between digital and physical methods seamlessly.

Success will come to companies that meet customers when and where they are.

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In particular, the shifts in consumer behavior over the last two decades. In this period, there has been a massive shift in access-to-market for Brands. 

Traditional brick-and-mortar Retailers have (mostly) failed to adapt to this shift. As a result, traditional retailers have legacy IT systems, outdated acquisition tactics, and rusty supply chains.

Very few companies made investments to update their infrastructures. 

The majority just kept doing the same thing that had worked during the Golden age of traditional Retail.

Then the Covid19 pandemic struck in 2020 and a lot of traditional retailers were spectacularly underprepared to meet the demands of the new customer behavior.

What is the Retail Apocalypse? Understanding the golden age of brick-and-mortar Retail

From the 80s to the early 2000s, wholesale brick-and-mortar Retailers dominated the market. They became what we know as Traditional Retailers or Legacy Retailers.

During three decades, these companies were THE channel for customers to access products and brands.

There was a clear separation of roles. 

On one side, brands that designed and made products. On the other side,  brick-and-mortar Retailers, which provided access-to-market to reach customers.

Traditional Retailers dominated every single Retail category.  If you had a brand and wanted to have mass access-to-market, you needed a brick-and-mortar retailer. Most retailers specialized by category or by target audience. 

Companies like Leroy Merlin, Home Depot, or Bauhaus specialized in the Home Improvement category.  Companies like Galeries Lafayette or El Corte Inglés targeted more premium urban customers instead of a single product category.

Traditional retailers based their leverage on dense networks of physical stores. Networks were built across regional, national, and sometimes international levels. 

Wholesale retailers became the gatekeepers for any brand that wished to sell a product for mass consumption. Retailers which thrived were disruptive and became dominant in their category or region.

They were disruptive in their approach to the customer experience. Generous loyalty programs and return policies helped them build trust with consumers. In turn, they built a strong and recurring customer base.

Their store network allowed them to have a local-based marketing approach. Traditional retailers built their strength on a close connection between store employees and their customers.

This connection gave them significant control over information on both brands and customers. 

Information control turned to higher margins and higher profits.

But in the early 2000s, two significant changes put an end to Traditional Retailers’ dominance. The first one is the significant expansion of D2C commerce, and the second one is the rise of online shopping.

1. The rise of Direct-To-Consumer (D2C) Retail

Brands that had enough pull to attract customers began establishing their own stores. These pull brands began cutting out the “middleman” and started reaching directly to customers.

Apple stores are the perfect example.

By 1999, Steve Jobs had returned for two years as Apple CEO. Unfortunately, he was less than happy with the customer experience provided by Retailers like Circuit City or Office Max.

He believed that the brand needed to have closer control over the presentation of its products. At this point, he built a team to venture into physical Retail. 

By 2001, Apple opened its first two stores in the US, introducing clean, experience-based stores.

In all categories, brands began opening physical stores to reach customers directly. Categories like sports, fashion, luxury, or cosmetics have seen the most significant changes. 

This trend has been accentuated in recent years.

Huge companies like Nike, Adidas, Nestlé, Unilever, or L’Oréal are taking the DTC route. These brands were dependent on wholesale retailers, but not anymore.

According to different reports in Modern Retail, Digiday, Retail Dive, these brands will generate over half of their revenues from DTC by 2025. 

This is one of the root causes to understand the end of traditional Retail and what is the Retail Apocalypse. If you want to read more about established brands embracing DTC, read this post.

2. Technology multiplied channels for access-to-market

Way before the Covid19 pandemic, the internet and, in particular, mobile technology completely disrupted access-to-market for brands.

A new breed of Retailers used technology to implement new fulfillment methods and customer engagement strategies.

E-commerce appeared as a new distribution channel to increase competition for physical retailers. Before e-commerce, it was pretty straightforward for Retailers to identify their competitors. 

At a local level, it’s easy to notice if a newcomer enters the market. It’s also easier to watch aggressive promotions or activities from competitors.

Online Retailing E-commerce changed these dynamics with new players. 

New players such as online pure players, online marketplaces, or DNVBs multiplied competition for traditional retailers. 

Let’s deep-dive into these different types of players to understand their impact on the Retail Apocalypse better.

What is an Online Marketplace?

Online Marketplaces appeared at the end of the 90s but got traction at the beginning of the 2000s. These players used technology to connect sellers to customers.

What is an online marketplace? An online marketplace is a platform that connects sellers of a specific product with customers for that product.

At its core, an online marketplace creates value by offering three services:

1. A robust technological platform able to onboard thousands of sellers
2. High traffic acquisition capabilities on the platform
3. Healthy conversion rates for the products within the catalog

A marketplace operator is not the owner of the product. Also, the operator doesn’t necessarily have the physical stock of the product. 

In exchange for its services, an online marketplace takes a commission per transaction. Sometimes, the marketplace also charges a fixed fee to use the platform. 

An online marketplace can be compared to a shopping mall that runs only online. Still, there are significant differences in the customer journey and monetization business models.

Online marketplaces appeared in the middle of the 1990s. Amazon and eBay were created in the US in 1994 and 1995, respectively. By 1999, the model was exported internationally with the creation of Mercado Libre in Argentina and Alibaba in China.

The Amazon case is a bit different since it started as a Book Retailer Online. 

In its early days, Amazon operated as an online retailer, being the owner of the books it sold. Later, Amazon shifted to a marketplace model connecting booksellers to customers.

During the 2000s, all these Marketplaces consolidated their positions as e-commerce leaders. As a result, most of the growth in their respective retail markets was captured by these players. 

This growth was almost always at the expense of the traditional retailers competing in the same categories. 

In the late 2000s, a new breed of online Retailer appeared: Digital Native Vertical Brands (DNVB).

What is a Digital Native Vertical Brands (DNVB)?

Digital Native Vertical Brands (DNVB) are a new category of Retail companies. Tech companies inspired these companies to disrupt industries through the use of technology. 

The term was coined by the founder of one of the first DNVB to appear in the US. Andy Dunn, the founder of Bonobos, created the company in 2007 to disrupt the men’s fashion industry. 

The trend continued with the appearance of Warby Parker, Everlane, and Casper in the early 2010s.

These brands had a single common principle: using technology to cut out the middlemen. In other words, they are using tech to become direct-to-supplier (DTS or D2S) and direct-to-consumer (DTC or D2C). 

On top of this, these brands use technology as the primary source of customer acquisition. They build potent brands with social media and digital channels.  The end goal is to create fans instead of customers.

The three main composites of a DNVB are:

1. Vertically integrated business: Direct-to-Supplier and Direct-to-Consumer cutting out middlemen. An integrated value chain of Retail processes from design, to production, to distribution.
2. Fully integrated customer journey through tech and data: All touchpoints of the customer journey are unified to create a bond that transcends the purchase. DNVBs not only use tech and data to develop and launch products. They also use it to address and retain customers.
3. Implementation of Growth hacking: These brands went from zero to millions in a few years without traditional marketing channels or big budgets. However, they succeeded in using growth hacking tactics, emphasizing customer retention, notably digital channels for acquisition and brand awareness.

This business model is quite revolutionary. 

The most prominent examples of DNVB are in the US. There is a fantastic, in-depth article about them by CB insights covering their strategies and DNVB success stories.

In France, these brands appeared more recently but have been equally successful and disruptive. Brands like Sézanne, Le Slip Français, and Tediber have grown in popularity. 

These brands cut out the middlemen in their categories in the last five years and built strong communities.

The trend of DNVB disruption has been accelerated with the appearance of no-code e-commerce tools. In addition, software tools such as Shopify or Wix have made it easier than ever to launch an e-commerce company.

These tools provide excellent user experience and complete brand customization. In addition, they need little to no technical skills to start, making them ideal for creating an online brand. It’s no wonder these tools have had tremendous success these last few years. 

In 2020, Shopify generated more than USD 100 Bn in Gross Merchandise Value. This figure is insane for a company that has less than five years. 

And to think that DNVBs are the players who created most of this value.

The retail apocalypse is when competition multiplies and margins start falling

In summary, traditional retailers got challenged from multiple angles. As a result, they are no longer the dominant player to provide access-to-market for brands. 

First, some of their biggest pull brands established direct physical footprints. This increased competition hurt margins for retailers. Second, their access to high-margin products got restricted by brands who prioritize DTC.

On top of this, most Retailers failed to adapt to the technological and operating complexity of e-commerce. As a result, the cost of revamping their Supply Chain and IT infrastructure is considerable. 

Unfortunately, this cost deterred many retail executives from improving their online business.  

For several years, retail executives managed to get decent results from their offline businesses. As a result, very few saw the need to push for digital transformation ten years ago. 

The problem is that their survival now depends on them doing so. And they have to do it in a much shorter time, with a lot more competition from all sides. 

In this post, we have covered what is the retail apocalypse and how to explain the end of traditional brick-and-mortar retail. Over the next post, we’ll explain how small companies can compete with big retailers.

Do you want more insights into E-commerce, Omnichannel Retail, and Digital Transformation? Subscribe to ApocalypseRetail to get insights sent directly to your inbox. Our content is designed for top business schools, retail managers, and eCommerce entrepreneurs who want to survive in the ever-volatile retail industry. Subscribe to our newsletter to join the fight against the Retail Apocalypse!

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It is only an accelerator in a process that began almost a decade before.

The impact of Covid19 on Retail: chronicle of a death foretold

The year 2020 has been a terrible year for traditional retailers. It’s probably one of, if not the worst, years for physical retail. 

Because of the Covid19 pandemic, lockdowns caused an unprecedented dip in physical stores’ traffic.

Only retailers considered as “essential” were allowed to remain open. The rest of retailers faced mass store closures or even total bankruptcies. 

For some companies, Covid19 significantly undermined the chances of surviving the Retail Apocalypse.

Giant retailers like Inditex or H&M have reported hundreds of store closures. For small and mid Retailers, the story is even worse. Without support from states, many businesses have struggled to keep business afloat.

During lockdowns, retailers still had to pay their fixed expenses like rent or employees’ salaries. In Europe, state support allowed covering part of employees’ salaries. This was a huge help for companies and employees. 

But retailers still had to pay monthly rent and utilities. Covering fixed expenses while the primary income source has been shut down is a challenge. 

Without a doubt, Covid19 accelerated the Retail Apocalypse. Still, we shouldn’t talk about the Retail Apocalypse as if it was only related to the pandemic. 

The truth is that Retailers’ underlying problems have been present for a while now. 2020 was the perfect storm to drive poorly prepared Retailers to bankruptcy.

What is the Retail Apocalypse? 

If you google the term “Retail Apocalypse,” you’ll see results dating since 2010. There is a considerable amount of news and stories with this term.

The term “Retail Apocalypse” is used to describe the trend of store closures impacting Retailers. More specifically, brick-and-mortar Retailers. 

The term is a fear-inducing term to drive clicks to headlines. In other words, clickbait (yes, we did it on purpose!). 

The term “Retail Apocalypse” even has its own Wikipedia entry. According to Wikipedia, this phenomenon began around 2010. There have been regular updates for the last decade.

When we built the course for HEC Paris, list and timeline of Retail bankruptcies published by CB Insights. 

This list covers dozens of cases for US retailers which have filed for bankruptcy since 2015. The article provides a sum of causes for each of these bankruptcies. 

In summary, the Retail Apocalypse can’t be attributed to a single year or for a single cause. The US has been hit the hardest as they have the highest share of Retail space per inhabitant.

Yet, France is no exception to the complete transformation of brick-and-mortar models. French Retailers such as Naf Naf, Alinéa, Kidiliz, André, or La Halle have recently filed for bankruptcy.

Brick-and-mortar Retailers have been dying everywhere for the last decade. 

The retail apocalypse has been happening for some time. The impact of Covid19 on Retail has been tremendous but it’s not the root cause of the Retail Apocalypse

But if it’s not due to Covid19, what is the root cause of the Retail Apocalypse?

E-commerce added significant pressure on Traditional Retail before Covid19.

Along with the impact of covid19 on retail, e-commerce has also had a considerable impact on retail. The rise of e-commerce is generally considered the main root cause of the retail apocalypse. 

But this is only partly true. 

What is E-commerce? 

Everyone you know that has access to the internet has participated in e-commerce in some way.

When people think of e-commerce, they usually think of online retail. Purchasing a product via a website and having it delivered straight home is the most common view of E-commerce.

But E-commerce is much larger than just the sale of physical products done online. E-commerce involves any transaction that begins online. 

E-commerce is buying a plane ticket or booking a hotel room (poor examples with Covid19). It also includes transactions for online services such as Netflix or Spotify.

Online penetration of the total retail market was already underway

Covid19 accelerated E-commerce penetration of total Retail. The share of e-commerce as a part of the total retail market has been rising for the last decade. 

Covid19 fast-forwarded E-commerce penetration by two years.

But, as we said before, Covid19 is an accelerator but not the root cause. E-commerce penetration was already expected to reach more than 20% by 2030.

Global e-commerce will grow from 1 in 20 transactions in 2016 to 1 in 5 transactions by 2030. 

If you focus on US and European markets, online retail penetration is even steeper. In these countries, online retail should reach 20% of the Retail market by 2024. 2024 is… tomorrow.

Over the next decade, most of the growth in the retail market will be online

Over the next decade, the Retail market is still expected to grow by 3-5% yearly. During the same period, online retail will grow at double-digit numbers every single year.

What this means is that most of the growth for the next decade will be online. Some would even argue that ALL growth will be online.

If you are a Retailer with a fragile online presence, it will be tough to grow over the next few years. The global pandemic has only accelerated this trend, but it has not been the root cause for these changes.

What is undoubtedly true is that the acceleration brought from the pandemic is here to stay. In other words, habits developed during the pandemic are not just going away. 

According to a study from the University College of London, it takes roughly two months for a new behavior to become a permanent habit, with a maximum of 254 days.  

So we are well over the limit for changes in consumer behavior to become permanent habits. 

Every single category has been subject to E-commerce disruption

Back in 2010, some product categories were challenging to handle on e-commerce. Barriers to online commerce sheltered some categories from disruption for some time.

Logistics’ complexity or regulatory constraints were the most common barriers. Complex logistics sheltered categories like groceries and home improvement. Regulations sheltered categories like pharma or para pharmacy. 

In other categories, disruption was slower as the user experience was not ready for detail-oriented products.

In the last decade, e-commerce players have torn these barriers down. These companies refused to accept that “it can’t be done online.” 

Then came Covid19. 

Since the beginning of the pandemic, every category has seen significant growth in online sales. Online acceleration was steeper in categories like groceries, pharma, or personal care products. 

After the pandemic, no category is sheltered from the rise of E-commerce. But why is the rise of e-commerce accelerating the retail apocalypse? 

The short answer is that most traditional retailers have failed to adapt to the changes in consumer behavior over the last two decades. 

A long explanation will be developed in the next post. We will be covering the root causes of the retail apocalypse and the end of traditional retail. 

Do you want more insights into E-commerce, Omnichannel Retail, and Digital Transformation? Subscribe to ApocalypseRetail to get insights sent directly to your inbox. Our content is designed for top business schools, retail managers, and eCommerce entrepreneurs who want to survive in the ever-volatile retail industry. Subscribe to our newsletter to join the fight against the Retail Apocalypse!

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