E-Commerce: How can physical retailers survive the apocalypse?



THE proliferation of e-commerce companies, such as Amazon, Ezbuy, Lazada and Lelong in Malaysia, has set off an alarming trend — the desertion of retail spaces. Malaysia is still a long way from the retail apocalypse facing brick-and-mortar retailers in the United States, such as Toys “R” Us, but retailers will do well to arm themselves ahead of the digital revolution.


For many retailers, the answer is seemingly obvious: go digital. With the low cost of setting up a website vis-a-vis rental, many have hopped on the bandwagon and invested in e-commerce only to realise later that the digital marketplace is highly competitive with low margins.


They are confronted with a logistical nightmare and the overwhelming realisation that many e-commerce retailers go unnoticed simply because they appear only on the second page of search results, and gain salience only when investments have been made.


How can physical retailers survive this retail apocalypse?


First, recognise the advantage physical retailers have over online merchants — the ability to create immersive experiences that promote emotional attachment between customers and the retail space. Take Ikea, for example. Ikea understands the value-added tactile dimensions it provides customers through its showrooms. This enhances the shopping experience for the many who need a sense of place and relativity to grasp how comfortable they are with a certain design or layout, one that is best illustrated physically. Ikea bucks the trend by retaining its traditional showrooms which it continuously redesigns, giving customers a reason to regularly make the trip to its store in Damansara.


Ikea is strategic in using its physical spaces to communicate brand values, reduce purchase-associated risks, increase post-purchase satisfaction, and importantly, provide customers opportunities to immerse themselves in the retail space and entice them to prolong and savour the enjoyable experience. This elevates the retail shop into a place of meaning and sentiment for customers.


Second, leverage the human touch provided by knowledgeable retail staff in contrast to the one-sided engagement allowed on digital platforms. With the use of online chat bots that respond to customer queries in real time, customer engagement has fallen short of the in-store version. By equipping physical retail spaces with expert staff, companies have capitalised on this shortfall to provide a human connection that is well versed in products, from origins to the product composition and user benefits.


They serve as critical touchpoints in allaying purchase anxiety and improving post-purchase satisfaction by reaffirming the customer’s purchase or helping customers find the right product to satisfy their needs.

Third, capitalise on e-commerce’s Achilles heel in its inability to provide consideration factors crucial to high-involvement purchase decisions. While smart devices allow for purchases anytime anywhere, this can turn into a constraint for products that are to be used long-term, vary in quality, or require touch and feel.


Two dimensional digital screens hence significantly devalue the purchase experience for convenience’s sake.


Physical retailers can identify areas of importance to customers that cannot be provided by digital platforms, to maintain relevance. For instance, makeup companies develop physical shopping spaces enabled by augmented reality that allows customers to visualise how the makeup would look on them prior to a purchase.


Finally, a look on the flip side can provide an appreciation of the online shopping experience that has both provided benefits and alleviated pain points faced by customers. However, it is important to understand that these online solutions may not be exclusive to online.


Retailers should first explore innovative solutions to achieve the same results, thereby preserving and enhancing the shopping experience rather than removing it altogether. When innovatively applied, technology can turn pain points into avenues of differentiation from competitors.


Not all products necessitate an extended purchase journey and retailers must decide if what they sell is worth the customer’s wait and their own investment into crafting an enjoyable purchase journey.


Ultimately, it is the unique and enjoyable experiences that they crave for, something that is potentially better sold instore than through the screen, that drive the journey to the store.


(Credit to E-Commerce: How can physical retailers survive the apocalypse?, New Straits Times Malaysia)

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