E-commerce, retail’s catalyst!

29.01.2020

I had already ventured into the public with the following thesis many years ago:

“E-commerce acts as a catalyst, the good guys win more, the bad guys lose faster.”

In 2020, the consequences of this thesis are more far-reaching than any expert could have imagined just a few years ago.

Every online retailer has at least as much reach as the largest chain stores in the country
But what does this mean for the individual retailer? Even in the early days of e-commerce, theoretical coverage was published and highly praised because everyone who “goes online” was defined as a potential contact and customer for online shops. Those times are long gone because the reality of retail means that retailers reach almost 90% of German households through product listings on Amazon, eBay, real.de and Rakuten. For many retailers, running their own online shop meanwhile ranks as a second or third priority.

The winner takes it all
While years ago growth was primarily limited by the number of available stationary touchpoints and retailers were reliant on opening their own shops or shop-in-shops or finding distribution partners for their own products, this situation has changed with far-reaching consequences. For although growth opportunities were limited in the stationary world, competition was also, as a rule, almost exclusively regional.
This situation, which many retailers now describe as “the good old days”, has changed dramatically. This is because the new gain in growth opportunities goes hand in hand with an increase in competition, not only nationally, or European, but worldwide.
The result of this development is the following: for all intents and purposes, the name at the top or holding the so-called Buy Box is the only one who sells, the others sell nothing — the winner takes it all — the good ones win everything, the bad ones just watch!

New skills, great opportunities — retail is detail
We call the current development the “democratisation of retail”, because the consumer meanwhile decides which product is the best and no longer the manufacturers’ advertising. Never before in the history of the retail industry has the “better product” had such great opportunities to dominate against all competitors and branded goods, never before have consumers been able to influence the success or failure of products so much with ratings.

“At a trade fair I was asked by retailers for my opinion on which would be the 3 most important factors for trading success:”

1. Perfect product marketing processes
Retailers must know how to stage products, communicate the benefits and advantages, create the perfect product image and find supporters in addition to as many reviews as possible. Nowadays, this is mainly done through social marketing and influencers, which exist for every budget.
However, product marketing also includes the processes surrounding the product system, e.g. in marketplaces, the advertising opportunities and the monitoring of listings, prices and the competition.

2. Perfect order and logistics processes
The worst thing that can happen to your retail business is to be overwhelmed by success. There are many examples of great offers that went “viral” and then the incoming orders could not be served fast enough. A luxury problem, you think? Not at all, because poor delivery capability or order processes are the breeding ground for negative product marketing, bad reviews, poor ratings, forum entries and the end of the article or even the supplier.

3. Product selection and purchase
Why does the purchase come at the end, doesn’t everything start with the purchase? Quite the opposite! In a stationary world it was different, a bad product presentation could not lead to a national shitstorm and locally it was almost impossible to be so overwhelmed by success that there were thousands of dissatisfied customers all over Germany/Europe, the world. Marketing and logistics are learning curves that retailers have to accomplish and require a lot of knowledge. If this knowledge is available, then the right products can be searched for. The right products are usually not so far away or at the beginning already in the private label with China import but in the selection of the suitable speciality, novelty and skilful collating into bundles.

Retailers don’t just have to be good, they have to be excellent!
This brings us back to the initial thesis, the good guys win more, the bad guys lose faster. That’s why a visit to the IAW trade fair is such a great decision for retailers, because in our e-commerce arena we bring experts to the stage who will help you remain excellent in marketing and order and logistics processes, specially geared towards SME retailers — the trade fair itself and our RESTPOSTEN.de platform are a treasure trove of retail offers that promise low purchase prices, sales and earnings.
For us, the IAW is an important part of the answer to retail’s most important questions today.

Guest contribution by Stefan Grimm (RESTPOSTEN.de, Co Founder & CEO)

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10 ‒ 12 March 2020, Cologne, Halls 6 and 9

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