That electronic commerce is gaining more and more followers is no longer a novelty. But yes it is that many shops have decided to restructure and leave their premises to become totally digital. Some companies are already taking their first steps to become "digital companies with stores".
Although many experts speak of a "retail apocalypse", others refer to a reconversion of retail. The truth is that stores like Sears or Walmart are closing stores in the United States, but there are also cases like T.J. Maxx, which plans to open more than a thousand new stores.
According to Marcos Pueyrredón, vice president of VTEX in Latin America, as well as some stores close, at the same time open others, but with a new format and other retailers.
"We are living an open war between online and offline to define the new value chain towards the consumer, which is very clear in the purchase of Cornershop by Walmart or in the purchase of Linio by Falabella. traditional must adapt and we see that omnichannel is the way, "adds Pueyrredón. And he points out that physical stores are the "great asset" of traditional stores, but they must adapt them to a different format so that they do not die.
On the other hand, Alejandra Fehrmann, CP and CMO of gA, assures that in the retail sector, as in any other industry, the strategies are diagrammed in response to the demands of the environment. "Currently, they are inclined to digital because it is essential to be where the user is and to offer multiple channels to buy," he says.
Businesses have the challenge of adapting to new disruptive technologies such as robotics, artificial intelligence, big data, customer tracking systems inside and outside the stores or data mining, among others. According to a report by gAexplora, Latin America still has a lot to develop with respect to the leading countries.
For Carlos Anino, Head of International Business at Napse, a company specialized in commercial automation solutions, this is one of the main trends in the sector, since the frontier between digital and physical commerce disappeared in the minds of customers, who expect Receive your products with the same efficiency, speed and quality, regardless of the point of contact used.
In Argentina, the big stores are starting to close some of their stores in the shopping malls and began to outline their path towards digital transformation. One of the most resounding cases was that of Musimundo, which closed 10 branches throughout the country due to the drop in consumption last May, when the bank run began.
But it was not the only one. Frávega, on the other hand, canceled five stores in shopping centers, while Walmart loosed part of its branch network and transferred it to Día. The US chain even lowered the blinds of its store in the Dot shopping mall. Carrefour also advanced with the closure of businesses in its adjustment program after requesting a preventive crisis plan from the government.
The contraction in consumption is also felt in the INDEC figures. According to the agency, activity decreased 2.9% in August and 4.2% in July in supermarkets, while shopping shortened 2.6% and 2.5% in the appointed months. The exit seems to be betting on the online channel
Nicolas Obejero, executive director of Retail Garbarino -which has not closed premises in the country-, affirms that "the main strategy of the company to become a digital company comes hand in hand with the incorporation of leaders, of the adequate human resources and of the systems ".
"This implies the integration of platforms and the incorporation of better CRM tools (Customer Relationship Management) and Business Intelligence, putting the consumer at the center and providing an omnichannel experience", completes in dialogue with iProUP.
"The company has been investing in this direction for years and today we have an infrastructure and logistics solutions that represent a competitive advantage, especially for the future," says Obejero, who adds: "This year we launched a marketplace with exponential growth, adding more and more categories and sellers, and we are launching an express delivery service of less than four hours. "
Walmart is another of the firms that is directed in that direction. Hernán Carboni, director of Institutional Relations of the Argentine subsidiary, believes that "the current customer is changing their way of buying and this is one of the factors by which physical stores have ceased to be the only place of purchase."
"Consumers privilege the optimization of their time, the closeness and simplicity of their daily purchases, the choice to buy online is growing more and more, and even the e-commerce platform has become more sophisticated, facilitating and adapting to the needs of customers who claim to buy easily, quickly and safely, "he adds.
In this sense, the company introduced an e-commerce application last year and is opening new delivery points so that customers can withdraw their purchases online in 5 minutes.
"This is an experience that articulates our Walmart.com.ar platform with our official stores in Mercado Libre and the agreement with key partners, such as Mercadoni, to have as a result a broad distribution in extension, efficient and in less than two hours" , extends Carboni.
From Frávega, Juan Martín Romero, who leads the areas of e-commerce, commercial, marketing and technology, says: "We have completely changed the operation and that is precisely our main challenge, if we thought of electronic commerce only, without having the other operation in mind, we would be leaving aside an important leg ".
According to the executive, companies such as Frávega "have an operation set up decades ago with a methodology and stipulated processes that today have changed 100% and that is where the greatest challenge lies." This is summarized, according to the executive, in what is called omnichannel.
"The client should have as few barriers as possible in the purchase process, which is why all the branches and employees must be integrated, and this integration of the entire structure and all the dynamics into new processes and purchasing paths is very complex. it has been going on for many years, "he acknowledges.
For Romero, there are three important pillars where the company is focusing on consolidating integration. "In the first place, we have to adapt and change the point-of-sale, process and logistics technologies, and then we have to restructure what is related to logistics, until now we are used to keeping the products in our distribution centers, sending them to the point of sale and that the client buys it there. Today, 70% of our digital sale is by pickup store ".
The third pillar is cultural. "At the beginning, there was resistance to these changes that were taking place on the part of the branch advisors and other areas where the point of sale impacts, so we had to adapt the culture of the organization to understand this new digital world", adds .
Taking into account the speed required by the rise of electronic commerce, Frávega decided, in a first stage, to carry out an "intermediate reconversion".
"The first four years we had a parallel and separate structure, but integrated to Frávega, it was digital marketing, technology, Business Intelligence, systems, developers and e-commerce commercials, everything was separated from traditional equipment. more than 20% of sales, we started the path of integration between structures, "he explains.
Disappearance reconversion of the physical store?
According to the Argentine Chamber of Electronic Commerce (CACE), the turnover of e-commerce in 2017 increased 52% and nine of every 10 Argentines have already bought online at some time. In any case, says Fehrmann, "the digital world still does not replace the tangible world and we believe that both areas should complement each other, providing multiple alternatives to consumers so that online is an extension of the offline".
According to the gA directive, the challenge lies in convergence. "Traditional retailers will try to integrate digital channels and technologies into their business strategies, while digital retailers will look for ways to replicate the benefits of traditional purchasing". The future of the sector is at a point where both worlds, the physical and digital, they are there to offer the client the best of both experiences, he explains.
And to achieve it, adds Pueyrredón, representative of VTEX, "first you have to understand the dynamics of retail e-commerce, which is process-based - compared to traditional retail, which is calculated in square meters - to be able to serve a client, which is the same, but different, and from there, there are four pillars: infrastructure and platform (technology), 360 marketing, logistics and customer service ".
While Gustavo Sambucetti, institutional director of CACE, stresses that an intelligent strategy would be to bet on omnichannel.
"The idea is not only to improve the product, but the attention in general." Omnichanneling awakens confidence, so the client feels when he receives responses in several ways, and also allows the loyalty of the buyers, who interact with the brand and thus manage to link the virtual world with the physical world, reaching a much more personalized communication, "says the manager.
For his part, Fernando Bosio, General Manager of Mercadoni Argentina, understands that it is about adapting to the requirements of a new type of customer.
"The consumer searches in the online stores as well as in the physical stores: price, variety and convenience, but a more important variable is added: the time savings, and they can choose how and when to receive it", he adds.
For Romero, from Frávega, "closing or not a store does not have to do with a future vision, but with the evaluation of whether it is profitable or not." However, he emphasizes that it is extremely important that they reconvert and that can be a great competitive advantage.
"For us, the stores not only work as a pickup store, but are places where we sell a lot, where we advise the client and are small logistics centers from where to ship products and reach any province in less than 24 hours," Romero says. He adds: "It also happens that the giants of the digital world like Amazon or Alibaba are displaying a physical experience that, in turn, is a challenge for us, because they do so with new rules to which we must adapt with speed and dynamism."
At this point, Hernán Carboni is forceful. "The physical stores will not disappear in any way." The adaptation to digital and omnincanality allows us to have a wide range of consumer profiles, while understanding the current Consumer Journey, where many continue to choose the physical store for their products. shopping, "he says.
"We are committed to investing in the remodeling of our stores so that customers can enjoy a purchase option with the full range of products." Regarding e-commerce, the current consumer encourages us to work more and more on processes and applications that allow them to enjoy a differential, for this reason, one of our main challenges is the improvement of the delivery of online purchases from technologies that allow us to know them better and strengthen the service ".
For the manager of Garbarino, despite the growth of the online is times greater than that of offline, the branches continue and will continue to be a strategic asset, given that 88% of online purchases are made via pickup store.
"The trends show cases like Amazon that buys WholeFoods for u $ s13,700 million because online pure players are needing to have branches and delivery points." We see that the branches are rapidly migrating to a multi-business role, being not only sales points products, but also delivery, travel sales and management of all our financial and insurance products. "
While Pueyrredón, VTEX argues that in Argentina some retailers have already reached the "adolescence" in what refers to electronic commerce. That is to say that more than 15% of its sale is online. But those channels that want to achieve maturity, that is to say reach 25%, will have to face the challenge of omnichannel.
"For that, they will have to leverage in their physical stores, because the last quarter of a mile, delivery, is not so efficient in Argentina and is very expensive, so the pickup store becomes highly relevant in the value chain to the consumer. When you are going to withdraw your purchase, if you have a good experience in the place, upselling (the recommendation of other products) and cross-selling (cross-selling) are between 15 and 30%. buy something else at the store. "
Technology at the service of the store
An Accenture study ensures that users who identify with the purpose of a store or brand are more likely to buy a product or service. In addition, the use of smart technologies allows companies to increase their market between 50 and 125%.
Today, the world has become a large marketplace, where the number of points of sale and purchase have multiplied exponentially, allowing consumers to buy products, services and services according to their needs at any place, time and channel. According to Sambucetti, in the world of electronic commerce, technology becomes a great facilitator for all steps of the purchase.
For Anino, "online commerce interacts with the consumer through different means: social networks, reviews, search engines, ads, it is fast, transparent and works from any device, therefore, technology is a very important facilitator in the digital transformation , but it is only effective if the processes it supports are appropriate to the type of experience that the client requires. "
The challenge is to build a striking, participative, comfortable, agile consumption experience that offers help and adds value.
The future of retail
It is at this point where Alejandra Fehrmann, CP and CMO of gA believes that "it is essential to start the path of Digital Transformation", although it emphasizes that this implies not only resorting to new technologies, but changing thought patterns in people.
"Most likely, those organizations that do not adapt to these disruptions that appear, disappear.Everything in the value chain that does not contribute or is innovative, will not last, especially intermediaries," he says bluntly.
For the executive of Frávega, there are industries that have not yet grasped the need to deploy a strategy aligned with the current consumer.
"The appliance industry is one of the fastest ones to adapt because e-commerce has a lot of penetration, but there is still a long way to go, and for those who are not seeing how things are happening, it will be very It is difficult to continue in the race, as well as a large investment, it is necessary to adapt culturally and processes that take a long time and could put your business at risk ".
Obejero remarks that physical stores will not disappear, but that "they will be transformed and adapted to new consumer behavior". In this sense, he explains that "some will become more exhibition stores, others in pickup stores and others will keep a large volume of people traffic".
In this sense, Carboni, of Walmart, emphasizes that "those who can not immerse themselves in the digital world are losing a new generation of multiplatform consumers and the possibility of rethinking the business in the future with a focus on the diversity of actions and comprehensive campaigns adapted to each consumer profile. "
The retailers that know how to take advantage of this context will be the winners. It is about making the purchase effective where, when and how the consumer wants, without having to use a single channel. The market demands to reinvent itself, to be disruptive and to excel to conquer the buyer. Many are already in the race.
