It seems a slow agony. A gradual process and, at this point, irreversible. It is not a trend that only occurs abroad, but it is becoming evident, every year with greater force, very clearly in Argentina.
The traditional trade, that is to say, the one that realizes in physical stores, is losing ground at a speed that worries to many players of the sector, independently of the heading.
In return, e-commerce has been experiencing explosive growth rates for some time.
Partly because the statistical base on which the comparisons are made year after year is small, but also because of the technological evolution and the confidence that the users were winning when using the credit card as well as other methods of payment in these platforms
Perhaps the most relevant fact is that the speed at which these two contrasting trends are accelerating strongly last year in Argentina, hand in hand with a recession and a rise in fixed costs that especially complicated traditional businesses.
The online modality, although experiencing a slight deceleration in the last stretch of 2018, ended up consolidating another year with positive growth rates.
To put it in perspective, the consumption that the Argentineans make via Internet, through the most popular platforms and the market place that operate different brands, totaled 2018 a figure around $ 234,000 million.
This implied a growth rate of the order of 50% compared to the $ 153,300 million recorded throughout 2017. That is, a couple of points above the variation of the inflationary index.
On the other hand, the sale of supermarkets and shopping centers will close with falls, in real terms, close to 2.5% and 1%, respectively.
Expanding gap
When drawing comparisons with the "real world", one can take into consideration the performance of the shopping centers that operate in Capital and Greater Buenos Aires, whose billing is monitored every month by the INDEC.
Projecting the latest statistics, with data to November, it is estimated that the almost 40 shopping centers that operate in the City and the Greater Buenos Aires, commercialized products for about $ 75,500 million.
This yields two important data: first, although sales grew 23% nominally, they fell sharply in real terms, given that inflation approached 47% in that period.
The second point is that e-commerce in Argentina moves a figure that is currently three times higher than that of the almost 40 major shopping malls in Greater Buenos Aires.
An interesting detail is that in 2013, when the purchase through the cell phone was still not so widespread and the sites of many brands were not sufficiently prepared to offer a good experience to the users, the billing through the online channel and in the Shopping centers had ended in a "tie", with operations for just over $ 24,000 million.
However, that year marked the turning point: for 2015, the gap in favor of e-commerce became almost 60%. `
By 2017, the gap had already risen to 155%. And last year, the difference expanded significantly, reaching triple.
Diego Galeano, account manager of the consultancy Baufest, believes that the latest economic crisis helped give more momentum to the online channel "because people have the possibility to compare and find better prices."
The following chart shows how the gap between both channels was widened:
"E-commerce is a worldwide phenomenon that is growing exponentially, geographical boundaries disappear, competition becomes international and the actors are no longer local, they changed the rules of the business game," sources told iProUP. of Mercado Libre, the main player in the sector.
By the way, the company founded by Marcos Galperin became a benchmark for virtual sales: it is already positioned in the top 10 of the most used applications in the country, being the only electronic commerce.
"Currently, we are the most visited online retail in Argentina: in October of last year, for example, we had more than 10 million daily sessions," they explain to iProUP.
More web traffic, more empty stores
Although the managers linked to the online channel prefer to talk about complementation between the real and the virtual world, the reality is that the boom that is exhibiting Internet sales contrasts with the poor performance of traditional commerce.
And the lower demand has been impacting, for example, on the number of vacant places that exist in the main areas of the City.
A survey, carried out by the NGO Defendamos Buenos Aires in 35 neighborhoods of Buenos Aires and in 34 localities of the GBA, determined that the number of establishments closed in the first month of the year was more than 2,500.
"It was a black January, which gave us an average of 82 closures per day," they warn from the organization.
In this context, Diego Galeano, account manager of the consultancy Baufest. He argues that the traditional trade modality is going through a moment of redefinition here and in the world.
"This crisis is generated, to a large extent, by technological advances, the new and detailed information available about consumers and the change in habits that all this generates," he says.
As a result of this, the expert believes, this sector "is being forced to evolve through profound and traumatic changes".
In a context in which purchasing power and sales fall, this phenomenon deepens.
And they live it from car dealers, who were left with oversized structures for the current level of patenting, to supermarkets and appliance chains, whose large surfaces cease to be profitable when demand plummets.
The challenge: to exploit the two channels
Experts say that, beyond the rise of online operations, there is still a long way to go.
From Mercado Libre, for example, they point out that beyond the explosive growth, e-commerce in the country has an impressive potential: to date it hardly explains 3% of total retail sales.
"It is a low number if we compare it with the penetration levels that electronic commerce has in other countries, such as the United States, where the level reaches 13%, or the United Kingdom, where it reaches 16%. much to do in our country, "they add.
Currently, the items that move the e-commerce ammeter are: tourism, which accounts for around 30% of total billing; electronics and computers, with about 12%, and furniture and decoration products, in the third place, with almost 10%.
In dialogue with this medium, Diego Urfeig, executive director of CACE, highlights that "the first wave of online commerce was dominated by electronics, air tickets and tickets for shows."
"Then came the second wave, which began to expand the range of items, with a greater predominance of clothing, toys, tools and decoration."
Now, the manager says, "what is starting to get stronger and stronger online is the purchase of food and beverages, in fact, it is expected that in the medium term it will exceed the demand for tourist tickets and packages, which it's a very mature category. "
Having so much ground ahead and at the speed that this modality advances, are you facing the final sunset of the traditional canal?
Experts agree that there will be a reformulation of the services area dedicated to trade. They add that there will be downs of blinds and that part of the jobs that today are dedicated to the attention to the presential public will migrate towards the online channel.
In the United States there is a very recent case, which shows the speed with which the changes take place: toys chain Toys R Us went from being a toy empire (with almost 1,700 stores) to succumbing in record time in front of "virtual" rivals, such as Amazon, which went out to offer lower prices and fast shipping.
For the experts, this collapse was, in part, a consequence of the lack of reflexes on the part of the company's management to anticipate and successfully climb the technological wave.
Also in that country, experts see that millennials prefer opting more and more for delivery -through apps- to sit at a restaurant table, a trend that suggests a potential crisis in the long term.
But not everything is so linear, since it is also true that even the giants of the online world are doing the opposite way.
Amazon, for example, recently opened its first physical library in New York. In addition, it inaugurated a chain of supermarkets without ATMs - Amazon Go - and disbursed u $ s13,000 million to buy the WholeFoods organic food chain.
Apple, meanwhile, proved that a well-studied face-to-face experience can become much more profitable and that's why it expanded its own store network to more than 450 throughout the world.
That is why it is very premature for Galeano to speculate on the possibility that the virtual world will end up collapsing physical commerce.
He is one of the many experts who say that, forwards, the key to brands will be to ensure that virtual environments and physical stores coexist efficiently.
However, it does clarify that what will separate the most successful from the rest will be the strategic vision to merge both worlds.
"Reconversion is something necessary, but it must be much deeper than just opening an online channel, the challenge now is to be aware of the experience you want to offer the client," says the Baufest expert.
In Mercado Libre pose a similar view: "The e-commerce is the fastest growing channel and it is natural that companies are becoming and inclining to the virtual world, but we must bear in mind that the key will be the combination of both experiences."
From the leading company in Argentina added to iProUP that "today many shopping processes have an online and offline component, with which the traditional retailer is finding a way to work in both worlds".
Urfeig, from CACE, provides a revealing data, which allows us to understand how these two realities can coexist.
"There is a phenomenon that is occurring after the emergence of Rappi, Glovo and other applications, this is true, but there is a very strong fact that should not be forgotten: the preference to withdraw the purchase in a store continues to grow and today it exceeds the option of home delivery, "he explains.
"The logistics improved and the number of buyers who prefer to receive the product at home increased, but statistics show that more and more people choose to go to a local store on their own, and this is a great opportunity to specify more sales in the physical space, "says the director of CACE.
For the expert, those who extract more profit from this change of habit will be those who better use the information: "The use of data and the level of knowledge that a company may have of the customer who already made an online purchase can turn the visit to withdraw the product in a new opportunity ".
Of course, this, according to Urfeig, will demand investments by the brands. And while it will be a gradual process, do not hesitate to say that it is the way forward.
From Mercado Libre pose iProUP that "the physical store will have a new role in the future." They add that "it's not going to happen overnight," but that, sooner or later, many more companies will have to "reconvert and use the online world as a generator of traffic and sales."
Galeano states that there are already companies abroad that offer different experiences for those who visit their premises: from clothes brands with augmented reality mirrors to test the garments quickly and fun, to travel agencies that read facial reactions to promotions of tour packages.
Although this at first sight sounds very futuristic for Argentina, for the expert the new demand to merge the online experience with the offline one opens opportunities both for big companies and for entrepreneurs.
"Little by little we will see more multinationals open state-of-the-art stores that will coexist with very complete e-commerce sites, but smaller companies will also have advantages, such as the proximity factor, or the possibility of reaching their customers through the social networks, "he concludes.
