Category Archives: online retail

Virtual Stores Prove a Hit

The virtual store wall in a South Korea Metro Station by Tesco/Homeplus was last year big hit. Now the concept has evolved, and World’s first virtual shopping store – using the walls of Seonreung subway station in downtown Seoul – displays over 500 product, ranging from food to tissue papers.

Customers can choose the delivery time and date – for orders placed before 1 p.m delivery can  be effected the same day – and delivery cost is the same as  more traditional online stores.

“A major perk of this concept is that consumers don’t have to be anywhere near the virtual store to place an order. So, if you want to order replacements of a bottle of water that you have in your hand, you don’t have to stop by the subway station’s store. You just have to scan the bottle’s barcode with the Homeplus app., and then the products are delivered later to home or office.”- Quoted Sitch News

We are sure consumers in Far East markets – like Korea and Japan – welcome this kind of technology and are at their ease with mobile barcode scanning and m-payments, but what about all the other markets? Would for istance consumers in France or Spain quickly adopt this kind of purchasing behaviour? What is your opinion about this?

Are pop-up stores a way for fighting retail recession?

We have already talked about pop-up stores a while ago, but a recent news about Walmart opening pop-up stores hit our attention not because of their being “pop-up”, but because the American giant decided to create small pop-up stores to face the upcoming holiday demand, driving it from a physical location (the pop-up store) to Walmart.com. While Walmart customers will be able to purchase high margin gift solutions directly from the store, they can also pick up items ordered from the retail giant’s website and pick them up in the store with no delivery charge under the Site-to-Store and Pick-Up Today programs.

The stores, located in Souther California,  which bear signs reading Walmart.com, opened November 2 and are expected to remain open through December 31. Unlike its recently launched Walmart Express or its Neighborhood Market small-format stores, this new concept does not feature food or other convenience products.

“This is just a small test we’re conducting during the holiday season to offer local customers easier, more convenient access to quality products at everyday low prices,” Wal-Mart spokesperson Lorenzo Lopez toldCSP Daily News. “These small stores, located in the Topanga Mall in West Los Angeles and Horton Plaza in San Diego, will offer customers access to more than one million general merchandise items currently available through Walmart.com.”

He added, “The store will display key holiday items such as toys, electronics, gaming and home theater. These items can be picked up at the Walmart.com store or nearest Walmart store via the Site to Store and Pick Up Today options. Products can also be delivered to customers’ homes via the standard shipping options currently available through Walmart.com. Customers will also have an opportunity to purchase a small selection of items at the store, mostly accessories.”

Lopez said, “We’re always looking for ways to better serve our customers, so it’s not uncommon for us to test different formats to learn how customers respond to products and services. These stores are just another way to give customers a continuous experience by bringing together our stores, our brand and our footprint through eCommerce.”

A growing number of shoppers are in fact using technology to research and purchase gifts. These test stores are an interesting way to let shoppers research and buy online with the option to “get it now.” The highly targeted assortment and short-term leases are a low-risk way for Walmart to reach new shoppers and capture shopping occasions it may not otherwise have access to. Maybe most importantly, the pop-up stores could drive shoppers that don’t currently shop at Walmart (or Walmart.com) to the retailer’s website.

A comparative analysis about Multichannel Retail in US and UK

Last month Econsultancy surveyed 2,000 consumers in the UK and 2,000 consumers in the US, to unearth attitudes to multichannel shopping and service.

The majority of consumers would find it useful to have a choice of retail channels, and a significant 33.5% felt this was very important. The results were very similar for both US and UK respondents, so the charts show aggregated data.

How important is it to be able to purchase from a retailer using different channels?

Quite a difference between US and UK consumers, with the latter far more likely to reserve items for in-store collection. Many of the biggest multichannel retailers in the UK are offering this service, (Argos, John Lewis, Halfords etc) with some success. For example, Argos’ multichannel sales grew to £1.9bn in the year up to February 26 2011, representing almost half (46%) of its total sales. The reserve and collect iPhone app accounted for 1% of total sales.

Do you reserve products online before collecting them from an offline store?

The use of mobile when shopping offline represents a growing challenge for retailers, as these stats show.

Use of Mobile Websites

US consumers are slightly more likely to use barcode scanners and compare prices via mobile, but a significant minority of US and UK respondents are using mobile as an offline shopping aid. Multichannel returns The vast majority of both US and UK respondents expect to be able to return items bought online to a local store.

However, as Snow Valley’s recent Online Returns Report found, just half of the multichannel retailers studied allow customers to do this. 

If you buy something online, do you expect to be able to return it to a local store?

Use of catalogues Percentage of customers that have used catalogues at least once in the past year before buying online or in store – aggregated US and UK results. (Source: Econsultancy)

Mobile consumers do prefer in-store purchasing, a research says.

According to JiWire’s research 79% of mobile consumers are ‘comfortable’ making purchases from smartphones or tables, even for products over the $1,000 threshold. Mobile shoppers are most likely to make purchases under the $1,000 threshold with about half saying they’ve made purchases over $100. Only 20% report making a purchase over $500 through a mobile device.

However, more important than those actually making mobile purchases is the fact that researchers believe mobile shopping is actually leading to more in-store purchasing. While many mobile shoppers logon to branded websites, many may be simply looking for product information, pricing or to check the availability. From there, they are going to brick-and-mortar stores to complete their purchases.

“What we are seeing with the evolution of mobile commerce is how the combination of mobile and location is transforming shopping behavior, enabling mobile advertising to drive in-store, brick and mortar consumer engagement,” said David Staas, Senior Vice President of Marketing with JiWire. “We are seeing this trend take place across a broad range of retailers and service providers, from national brands to local mom and pop deals.”

Researchers found:

• 31% of mobile shoppers research mobilly and then buy in-store
• 40% of mobile shoppers research mobilly then purchase via PC/desktop
• 20% of mobile shoppers research and then purchase via mobile

In addition to researching purchases, mobile shoppers are looking for local store locations, looking for daily deals or coupons and even sharing deal or product information with friends through email and social networks. (Source: Bizreport)

AR is running fast towards the fashion Retail industry

GoldRun is a new platform for retailers that matches mobile, Augmented Reality and social. Enjoy this video, comments are welcomed!

New Technologies for internet sales of beauty products

Irina Barbalova, Head of Beauty and Personal Care research at Euromonitor, explains how the beauty industry spreads its message using new technology. As internet sales of beauty and personal care (BPC) products increase, companies are looking for new ways to interact with consumers. With consumers sharing their experiences all across the web on social networking sites, some companies are more receptive to social interaction than others. A fear of negative reaction is keeping some companies off of sites such as Facebook and Twitter. However, smaller niche brands have accepted social networking as a means to spread their brand when marketing budgets are small. (Source: Euromonitor)

How to implement grocery retaling and e-tailing in India

We found this article by Avinder Batra, published on IndianRetailer.com very interesting because of its very detailed approach to the implementation of a home delivery service for those small groceries retailers that are facing the competition with by multinational like Wal-Mart. This is also a business model which is very sustainable, by lowering CO2 transportation emissions and by mainting vital the traditional small retail grocery business.

Batra identifies a big trend in the grocery business- home delivery- due to two main reasons:

-High fuel price: Indian families are not interested in spending time on these products
-Families want more leisure time for themselves: Since both the partners are working, shoppers find this activity as waste of time to collect groceries in weekends

“When most of the big retailers are fighting for larger space, opportunities can be foreseen where you do not have compact space and can still run successfully through Etailing the Grocery model” Batra says.

The solution could be a mix of website, mobile, IVR.

High rental costs have made the retail business cumbersome for the independent players.  As told by Ragib Hussain, VP, Vice President Strategy at e.Soft Technologies,  “This type of model does not need much of investments. Etailing models (having virtual shop) can help retailers in expanding the business thus by covering larger area & reap good volumes.”

Small independent retailers need to increase their customer base: Online services and then home deliveries would fetch revenues only when you have large customer base. Margins are the rewards which an investor gets and this is what he has to work on to have with minimum liable cost.

Develop tie-ups/partners: Developing partnership agreements with the kirana shopkeepers and others nearby shops in the area that would reach the consumers through home delivery systems. This should  be the initial step of building a strong network in the areas concerned you want to cover.

 Also, it would decrease the liability on the retailer—warehouse cost, maintenance cost, procurement cost, etc. 

Develop your own site and make a strong viable back-end system for smooth functioning of the business model: either by creating your own hosted website or by opting for cloud services, this is a very important step. Cloud services would play a vital role to make updated connections with your suppliers, logistics suppliers, CRM updates and drop shipping suppliers. Because time is a critical factor, efficient distribution is of utmost importance. Technology plays a key role in enabling an efficient dairy distribution model.

 This is the back bone of the whole concept when the business starts working and it is the most challenging part of the business to make real-time connectivity with them.

Home delivery services: By tying up with the partners in the local areas, investor can direct the orders to those shops and through delivery boys; the task can be executed smoothly. This would even increase the revenue prospects of the local partners.

 If the business model is churning profits, there is no harm in having your own warehouses and company owned shops in the localities. This could be the way to expand your business model and make it stronger.

Each small outlet should be centrally connected to the warehouse to record the sale and updates are on real time basis. This would help to replenish the goods which are going out of stock.

Delivery system: Tempos and other mini trucks can be used to provide deliveries in the located areas if orders come in bulk in particular area. (Source: IndiaRetailer.com)

Online shoppers welcome home grocery delivery

Though few retail grocers offer home delivery of web orders, a survey from the Food Marketing Institute, a grocery industry trade organization, suggests that consumers respond more to web grocers that offer to deliver online orders compared with grocers that require pickup at their stores.

In 2010, 32% of consumers responding to an FMI survey said their primary grocery store offered online ordering, and 28% said they had done at least some online ordering at those grocers. 4% said they shopped online at those grocers one to three times per month, and 2% said at least once a week. But 22% said they shopped online at those grocers less than once a month, with another 73% saying they never shopped there online.

By comparison, the FMI survey showed that only 17% of respondents said their primary grocery store offered home delivery—but 13% said they ordered home delivery one to three times per month, and 5% said they did so at least once a week, higher figures than for when home delivery was not an option. 17% said they ordered home delivery less than once a month, leaving 65% saying they never did.

Regardless of the demand for it by consumers, however, home delivery of groceries isn’t for all retailers, experts say. “Home delivery is only going to work for really big folks with profitable online grocery operations offered in places where the retailer has a reasonable density of customers,” says Jack Horst, a retail strategist at retail industry consultants Kurt Salmon.

The category of “really big folks” surely includes Amazon.com, the largest web-only retailer, and Wal-Mart Stores Inc., the world’s largest retailer and the leading U.S. grocery merchant. Both Amazon and Wal-Mart are experimenting with home delivery of groceries.

Amazon’s program, dubbed AmazonTote, has been tested by the company’s employees in Seattle for the past six months or so. In its infancy, the service entails weekly delivery of groceries and other items to the user’s home, with the groceries bagged in reusable tote bags, all free of charge.

According to The Financial Times, the service is linked to Amazon’s Fresh grocery delivery service, which currently only operates in the Seattle area but is available to all consumers in that area.

Fresh offers fresh produce and meats in addition to non-perishable grocery items; the service goes beyond food, too, ranging from pet supplies to beauty products and other Amazon.com categories. Granted, the convenience is reflected in the price — would you pay $2.50 for a single grapefruit under any other circumstances? — but you get what you pay for, which in this case amounts to a lot of time and energy saved.

On the other side, the “Walmart To Go” test , just launched in California last Saturday, allows customers to visit Walmart.com to order groceries and consumables found in a Walmart store and have them delivered to their homes, a company’ spokesman said. Products include fresh produce, meat and seafood, frozen, bakery, baby, over-the-counter pharmacy, household supplies and health and beauty items. Wal-Mart also offers a Pick Up Today service, which is limited to select electronics, video games and appliances.

What Amazon also needs to fear is a new initiative from the company called @WalmartLabs.  According to GeekWire, this new Silicon Valley-based arm of the company is stating it has pretty lofty goals: “Walmart plans to expand the @WalmartLabs team and expects this new group will create technologies and businesses around social and mobile commerce that will support Walmart’s global multi-channel strategy, which integrates the shopping experience between bricks and mortar stores and e-commerce.”
In other words, exactly what Amazon does, except with the integration of brick and mortar stores.

Walmart seems to be turning its collective eyes towards technology more and more as of  late, the only real question is what took them so long.  If the discount store giant starts pouring its massive resources into more technology integrations, releasing its own products and taking on the likes of Amazon, we could see the company slowly take over eCommerce just as it did with the retail world.

The majority of grocery retailers still prefer store pickup of online orders, as MyWebGrocer* CEO Rick Tarrant says. But if the Wal-Mart and Amazon test will prove to be successful, we are pretty sure that at-home delivery will be the next big trend.

*MyWebGrocer, a provider of e-commerce and digital marketing technology and services to more than 110 grocery retailers, has supermarket clients including ShopRite that offer home delivery in some markets

Business Retail: a global view

Retail is big, but how big it is and is it equally distributed worldwide or are there countries where retail is at its best?  

The last CB Richard Ellis Survey  about the business of Retail, reveals how fluctuating this market is, measuring how the most important 323 retailers changed their strategies in 73 countries during the last year.

The survey findings are very interesting, showing us that Dubai is the most favorite city for both American (61%) and European (63%) retailers, while only 23% of retailers from the Asia-Pacific area are present in that city – not because of lack of interest, but just because the Asia-Pacific consumer market is the fastest growing, therefore retailers from those countries do not need to branch out abroad.

Retail expansion rate saw a decrease during 2010, only a 2%, compared with 4% in 2009 and 12% in 2008, with new target countries being India (8 new retailers) and Turkey (7). United Arab Emirates (UAE), Kuwait, Ireland, Romania, and Belgium all attracted six new retailers.

Online retail is becoming more and more important for retailers: 82% of the brands in the survey do have an online catalogue, even though only a smaller percentage (46%) offers to consumers the chance to purchase goods online, with Value&Denim being the most active (43%) followed by mid-range fashion  (26%) and Luxury & Business Fashion (32%). To have an online retail shop is the favored choice by those brands who already have a physical store (46%), while in more advanced market such as the U.S.A., there is a slight percentage of online seller (24%) who do not have a physical store, and that are using online sales platform to test the market before opening a physical point of sale.