E-Commerce vs Retail: How to Avoid Channel Conflict

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In recent months, the coronavirus pandemic has taken the retail industry by storm, with all non-essential offline stores being forced to close. Before the lockdown, many brick and mortar stores were flourishing; however, measures put in place during the crisis drove consumers to shop online  – highlighting the importance of omni-channel.

Though a growing number of consumers are likely to continue shopping online, there are still many individuals who favour in-store shopping and will likely go back to old ways as soon as they are allowed to do so.

As physical retail stores begin to open their doors again, we’re going to delve into the benefits and weaknesses of e-commerce and retail, and explore how both channels can work simultaneously to create the dream omni-channel retail solution.

E-Commerce vs Retail: The Pros and Cons

Both retail and e-commerce present a range of pros and cons for brands and consumers alike. Let’s take a look at some of the main ones, below.

E-commerce

E-commerce expanded the market for brands, now they can reach customers globally, the shop can be run 24/7 with a low maintenance costs. However, the competition is higher and logistics for delivery and returns needs to be set up well. But the most important is website performance and e-commerce capabilities set up.

benefit for brandsE-commerce pros & cons for Brands

From consumer point of view e-commerce expands purchase options, since it is possible to buy and get the item shipped to the door step. And often there will be a retailer or two who will sell the preferred item cheaper. In this case it is important to check if these retailers are official partners of the brand. However, the most common objection for e-commerce – not possible to touch & feel the product and delivery time could vary from next day to few weeks delivery.

ecommerce for consumers E-commerce pros & cons for Consumers

Brick & Mortar Stores

According to Business Insider more than 4,300 physicals stores are closing in 2020. COVID-19 definitely influence it, but according to Vend “Consumers are making more convenience purchases online, but they’re still making their luxury and experiential purchases in person. High-ticket merchandise categories still call for in-person product interaction, which can only take place in in a brick-and-mortar store. In the fashion category, for instance, over 70% of purchases are still made offline.” So what are the pros & cons of having a physical retail channel for brands?

Brick & Mortar pros & cons for Brands

From consumer point of view 77% of people believe the main advantage of in-store shopping is the ability to touch, try on, and see products – this is especially useful for products like cars, mattresses and technology. Furthermore, Tulip Retail found that 79% of consumers think being able to engage with knowledgeable store associates is important. Things like in-store tablets, AR and digitally-savvy shopping centres are all helping to entice customers into physical stores.

Brick & Mortar pros & cons for Consumers

In today’s retail landscape, we believe it’s no longer about which channel is best but looking at how these channels work together. Consumers want to be able to purchase products in the most convenient way – they aren’t interested in how each channel performs. Adopting an omni-channel strategy is a characteristic of digitally mature, forward-thinking organisations.

Channel Conflict and how to avoid it

Many brands avoid going fully omni-channel because they’re worried about channel conflict – be it from their own channels, or retail partners. We believe that rather than causing channel conflict, adopting an omni-channel strategy can be mutually beneficial for brands, retail partners and customers.

According to Forrester, “Even brands with serious channel conflict concerns have successfully managed retail partner relationships alongside D2C commerce initiatives by being transparent and clearly communicating noncompetitive objectives.”

Brands can avoid channel conflict by implementing a Where to Buy solution on their website. Hatch’s Where to Buy technology gives brands the ability to combine all of their channels (online & offline) to provide the best possible customer experience. On top of this, brands with Hatch’s Where to Buy implementation can track insights and better analyse customer shopping behaviour – this further enables all channels to work together to achieve one goal.

While there are advantages to both e-commerce and retail, we believe that omni-channel is the next logical step for brands to increase sales, improve customer relationships and enhance revenue. With the current peak in e-commerce sales and the likelihood this behaviour will continue, there has never been a more important time to implement an omni-channel strategy. Omni-channel provides customers with an effortless purchasing experience that allows them to shop conveniently from any platform. Omni-channel retail combines the best attributes of e-commerce and retail and puts the ‘which is best’ debate to bed.

For more information about Hatch’s Where to Buy solutions or to request a demo, get in touch with a member of our team.

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