ecommerce is reinventing retail

posted in: Nundinae | 1

Future Shop is experimenting with a new concept store. Their typical stores are 27,000 square feet, and they have opened (until now) three small-format stores with 8,000 sq. ft (3,000 sq. ft. of retail space and 4,000 sq. ft. of warehouse inventory).

These stores are specially designed for the so called “connected customer”, that is a customer who prefers to buy online and pick up in store. They can reserve an item online and pick it up within 20 minutes. In the near future these stores will try a new concept, called ship-from-store.

As shopper traffic in stores is declining, and ecommerce sales are increasing, this is a way of joining both worlds.

HeadCount, an analytics firm in Edmonton, says that in the first nine months of 2014, shopper traffic to stores fell 7 percent from a year earlier. Retailers are not suffering too much yet because of the sales gain of 4 percent in the same nine-month period. Reason is fewer browsers and more shoppers who research online before hitting the store to make purchases.

Customers don’t want to pay for shipping; and some type of products are not suitable for online purchase as people prefer to “touch” it before buying it, so these small stores or pick-up places are convenient.

Companies need to invest more in their ecommerce stores, as companies like Amazon are forcing rivals to do so. Amazon represents 5 to 7 percent of total ecommerce retail market in Canada. Just consider that its closest competitor, Wal-Mart Canada, stocks 150,000 items… and Amazon stocks 50 million items.

Wal-Mart is testing its “Grab & Go” service in 10 outlets in Canada, allowing customers to buy online and pick it up in lockers in a store accesible with a code sent to them. And this is a powerful strategy for more sales, as we always forget something in our shopping list…

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