Digital Marketing & Sales

Dot Com and traditonal businesses: are strategies converging?

B2c eCommerce is increasingly significant. It is estimated that in 2017 the value generated by online purchases worldwide will exceed 2,000 billion euros, with 750 bil€ in China (14% penetration of online sales over total retail orders), 550 bil € in USA (15% penetration), and with 500 bil € in Europe (9% penetration).

At worldwide level eCommerce is experiencing a period of broad transformation and entrepreneurial dynamism. Proof of this is in some events that characterized 2017. On one hand we have witnessed the creation of strategic alliances between big eCommerce merchants and various operators (other merchants, traditional retailers and service providers) with the goal of developing technologies (Walmart and Google, Amazon and Microsoft) or of expanding commercially (Amazon with Whole Foods Market, Alibaba with Intime, eBay with Flipkart). On the other, 2017 has been the year of heated debates on the effects of online technology on traditional commerce. The success of certain eCommerce initiatives has in fact strongly impacted the survival of some names of the traditional retail industry, including those unable to design effective online – offline hybrid solutions. In the USA, for example, it is estimated that 8,640 sales points will close by the end of 2017 (compared to 2,056 of 2016, 5,077 of 2015, 3,084 of 2014 and 1,766 of 2013) and 10 retail chains will face bankruptcy.

For traditional retailers it seems therefore necessary to push towards an idea of commerce that is developed through a complex transformation and revision of the relationship between Businesses and consumers to a multichannel design. But the uncertainty of which strategy to pursue is still strong. Is it best for traditional companies to partner with the big Dot Coms, as Whole Foods Market did or as is rumoured Carrefour will do, or invest to face them head on following Walmart’s example?

At the same time it is interesting to point out the strong focus of big Dot Coms towards the traditional world, with the opening of physical/temporary stores and/or the acquisition of/participation in groups or retail chains. Here too, development directions are not clear. If the online sector is gradually gaining share over offline retail and stores keep closing why are some of the big Dot Coms investing in it? What goals are they pursuing with physical infratructure? For some Dot Coms the store can play a key role in developing the customer relationship. A physical location is needed not only to eliminate some barriers to buying of web shoppers, such as the fear of not being home for the delivery or the need to touch and try a product prior to purchasing it, but also to develop value added delivery services based, for example, on promptness (delivery in a matter of hours leveraging the extensive stock of the sales network).

Our perception, stronger than in the past, is that we are facing an important time of instability that is not easy to understand and therefore tackle. This appears to us even more true for the Italian market where many traditional operators – manufacturers and retailers – have just been waiting and watching with a passive attitude the changes taking place, so much that the gap that has developed is now difficult to bridge.

Valentina Pontiggia

Valentina Pontiggia

eCommerce B2c Observatory Director
Valentina Pontiggia

Latest posts by Valentina Pontiggia

You may also like
Advertising and new ePrivacy policy: the data node and the issue that could penalize small publishers
New store formats? Experimenting galore!
1 Comment
  • Jan 9,2019 at 2:20

    I am no longer positive the place you’re getting your info, however great topic. I needs to spend some time studying much more or understanding more. Thanks for wonderful information I was in search of this information for my mission.

Leave Your Comment

Your Comment*

Your Name*
Your Webpage