30.06.21

Why Are Offline Channels Still Important For Brands?

Retailer's success in the post-Covid world is possible only by creating hybrid offline and online trade models. That's why e-commerce brands have already begun to come out offline.

In May 2021, Google announced its first offline store to sell smartphones, notebooks, and fitness gadgets.

There will also be shopping racks for online purchases. It will be possible to receive a consultation, set up your device, or give back earlier acquired gadgets for diagnostic or repair.

Google explains that many buyers want to hold the device in their hands and test it before buying.

Notably, Google made this announcement almost 20 years after its competitor, the Apple company, opened its stores. They have more than 500 Apple Stores worldwide (270 of them are not in the USA). Also, South Korean tech giant Samsung is equally successful in selling its products offline and online.

Offline or online?

In the last few years, going online was the primary trend of retail development. It was possible to buy everything on the Internet – from clothes to groceries, from cat food to jewelry. Companies that had entered online before Covid-restrictions have not suffered during the pandemic. Those who could establish omnichannel in communication with buyers survived in conditions of long-term restrictions.

The statistics evidence this trend. For instance, in the last year, more than 2,5 trillion dollars was spent on purchases with the help of mobile devices. In 2021, this indicator is expected to rise by 18% to more than 3 trillion dollars. More than 70% of online purchases will be made on mobile devices by the end of 2021.

However, buyers will be interested in visiting physical stores in the changed circumstances of the post-Covid world. For instance, Fabrizio Freda, CEO of Estee Lauder, is confident that buyers will return to physical stores more actively, and it will be the primary trend of 2021-2022.

Despite the sustainable growth of e-commerce, more than 80% of all retail sales in 2020 accounted for physical stores. Some predictions allege that e-commerce will provide 22% of sales to 2023 and 95% to 2040, but it is only a supposition.

Anyway, ideas about ending physical stores and traditional trade centers were greatly exaggerated because they still occupy a critical retail structure. And this role will be even more noticeable in the post-Covid period.

How will the Online-to-offline (O2O) commerce change?

Using digital opportunities for offline businesses' advertisement has a name Online-to-offline or O2O-commerce. But the truth is O2O is an idea that can be used bilaterally - either Online-to-offline or Offline-to-online. O2O–commerce depicts digital communication and online promotion opportunities for offline businesses and envisages using digital promotion for clients of physical businesses (cafes, restaurants, beauty salons).

The O2O idea can change towards integration Online and Offline for consensual and complementary customer service. O2O conception can be perceived on a broader scale – as the existence of few interaction points on the client's way, either online or offline. And their literal appliance can lead to spectacular results.

O2O model in the post-Covid world integrates online and offline and interpenetration that can be expressed in different ways.

Why should you invest in offline stores?

There are few reasons for investing in offline stores. One of them is interest in offline purchases after the pandemic. Offline stores are locations where consultants are engaged and communicate with customers. It can be important in the post-Covid period for people who missed lively interaction.

Offline stores are also points for conducting marketing researches and studying customer habits. It is an additional platform for attracting customers to online stores.

What brands open new offline stores

Big brands began to invest in the opening of physical stores after long-term Coronavirus restrictions. For example, the Sephora brand belonging to LVMN plans to open more than 60 stores this year and more than 200 stands (mini stores) in Kohl's stores to bring their number to 850 by 2023.

Amazon's interest in offline trade has been known for a long time. Last year the company began to open offline food stores Amazon Fresh, and it plans to proceed with development this year.

American Eagle plans to open more than 60 offline outlets. Gap plans to extend from 30 to 40 Old Navy trade outlets and 20 to 30 Athleta outlets.

Thus, e-commerce re-considers its attitude to physical retail. The literate combining offline and online trade, investments in the unique user experience can bring huge success.
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