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How e-Commerce stores have started opening up physical stores and physical stores went digital

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Over the past few years, e-Commerce has picked up significantly around the world as people are opting to find more convenient and in a lot of cases, cheaper ways to shop. With the COVID-19 pandemic, the growth of e-Commerce was exponential globally (read more about that in our blog “How Covid-19 increased consumerism despite many losing their jobs and streams of income”). The push to go digital has been great for brick and mortar stores. Snap lockdowns, social distancing rules and globally the risk factor of going out for non-essentials (and even essentials) continue to pose a risk for community health. Many stores have therefore opted to open up digital stores. Almost everything these days exists digitally and if your business isn’t shoppable online in these times, you probably aren’t going to be able to sustain it for much longer. Checkers60 were pioneers of online trade in 2019 (read more about that here), but other grocers and even pharmacies are now forced to head in the same direction.

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Why are online stores looking to open up physical stores and why are physical stores opening up online stores – The bid for hybrid shopping is here.

According to Repsly, online retail startups who often pride themselves on being nontraditional are now working to bring back established brick and mortar stores while maintaining their fresh image online and even typically launching new products online first, rather than in-store.

Similarly, Repsly also reports that physical stores have also had to start leveraging the trend of online shopping. For most retailers, their big retailers use their stores as fulfilment centers.

Thus, combining the two and creating a hybrid-like model whereby consumers can shop online, but collect in-store gives major retailers the best of both worlds. The Mr Price Group has done this exact hybrid model of order online, pick up in-store, incentivising store visits through quicker collection and free collection as opposed to longer wait periods and fees associated with delivery.

Online Shopping - IMM Blog image

This article suggests that the move for online stores to go brick-and-mortar lies within the fact that 85% of consumerism occurs physically. However, this now dated article (2019) does not consider the implications of in-store shopping in relation to COVID-19.

In spite of this, it goes on to explain that online retailers have many reasons for adding an offline presence due to the buying culture that still exists, the experience customers enjoy when visiting a store and the necessity in reaching a wider, but to an extent more targeted clientele.

In some situations, shopping in a store is also quicker (from an instant receipt of goods perspective) and more convenient (from a touch, feel, try and choose perspective) than shopping online. In addition, physical stores serve as local distribution centers for online retailers.

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Conclusion

For any retailer, big or small, the COVID-19 pandemic has posed a number of threats to businesses. Many businesses liquidated, but also many started to spring up as people began to look for new ways to earn money. For brick and mortar stores, the cost of maintaining shops open while there were no customers buying in-store was a forceful hand to go digital. Since consumers have now primarily gone towards and are still growingly leaning towards online shopping, it is only sensible for the survival of retailers to exist online and for their product catalogues to also be present online.

Likewise, for online retailers, opening up physical stores gives way for storage capacity and can act as fulfilment centers, but also expand their customer reach for shoppers who typically prefer in-store shopping.

In conclusion, a hybrid of this model may prove to be the most effective.

Depending on the business itself, giving consumers the best of both worlds and catering to all kinds of shoppers is always better.

Online Shopping Conclusion - IMM Blog Image

Blooming Business – NETFLORIST

Blooming business: NetFlorist has a rich, 20-year e-commerce history

NetFlorist was the talk of social media on this year’s Valentine’s Day, for all the wrong reasons. But this was just a blip on the e-commerce company’s history. Michael Bratt spoke to the company’s managing director, Ryan Bacher.

Having geared up for 45 000 deliveries on the day of love, load shedding and heavy rains severely impacted NetFlorist’s operations. Non-delivery of orders or the delivery of sub-standard gifts left many consumers fuming, and they weren’t shy about relaying their experiences on social media.

The backlash was handled very professionally by the brand, with Bacher issuing a video apology, which was posted on social media, and the company responding to all complaints.

“My gut is we haven’t recovered as a brand,” Bacher honestly responds, “because we upset our customers… I don’t know that you can always recover. All we could do was control how we tried to recover and learn from this and ensure we plan better for next year,” he adds.

This incident was a knock to NetFlorist, which has built itself up to become one of the largest e-commerce retailers in South Africa. Marketing has played a huge role in the brand’s growth over the years, and it’s interesting to see how their strategy has evolved.

The evolution of NetFlorist’s marketing

In the early days, NetFlorist didn’t use any brand marketing, instead relying on affiliates (partnering with large companies) to gain traction.

“We lost our brand in that space, but we were so new to the e-commerce retail journey we didn’t understand that the brand is important,” comments Bacher.

These relationships later morphed into co-branded environments, before NetFlorist launched its own brand journey. Radio was the chosen medium to begin with to get the message out, but nowadays Google AdWords dominates, followed by digital and social media, radio and out of home billboards and vehicle branding.

Having had a childhood friendship with current FCB Africa CEO Brett Morris, NetFlorist partnered with the agency for advertising campaigns. Bacher stresses that this was an important step, as FCB really understands the essence of who NetFlorist is, and that great creative is vital for marketing success.

“From day one it’s really been about getting NetFlorist to become a household name through the marketing. There obviously have been changes in strategy and product innovations and many other developments along the way, but the marketing has always been true to building the equity of the brand,” explains Morris.

This has led to a situation that Bacher describes as “the brand being bigger than the business”.

“Our brand has been overweight in terms of the success of our business. Our name is everywhere and people think it’s this giant business, but we’re relatively small. We’re lucky to have a brand that’s punched above the business, because people need to trust us to deliver and a brand helps that tremendously,” he elaborates.

Realising that NetFlorist would probably never have big advertising budgets, Bacher and Morris had to ensure that the end product, of whatever was being spent on marketing, stood out. This was where creativity and humour were incorporated, with NetFlorist becoming known for its mischievous, irreverent, tongue-in-cheek tone in adverts, which entertain.

Harold, based on the father of a friend of Bacher and Morris, has become synonymous with the brand and its advertising, arguably reaching the same level of celebrity status as Steve from FNB.

Complaints about adverts 

But many times, this advertising approach has landed the brand in hot water with consumers lodging complaints with the Advertising Standards Authority. The most recent one happened at the beginning of this year, with NetFlorist winning that case.

“We won the case, but we pulled the ad. We’ve done that before quite a few times. We’ve never lost a case against our ads, but we always pull the ads. If it gets to that stage we do that, because our aim is not to offend,” comments Bacher.

Morris says that NetFlorist is a fantastic client to work with because “they are not afraid to have a point of view and are brave enough to put their point of view out there. We have had some criticism in the past for being a bit too risqué, but you can never please all people all of the time,” he says. “As the saying goes, if you stand for something you may have some people for you and some against you and if you stand for nothing you will have nobody against you… but nobody for you either.”

Differentiating selling points

NetFlorist currently does on average 3 000 deliveries a day, with two thirds of those being same day. Same day delivery is a key differentiator for the brand, as is personalisation of gifts (across 1 000 different products), which is the fastest growing part of the business.

“What we try and do is provide what we think our customers want, even if it’s hard, because it raises the level at which competitors are going to have to take us on. For example, we moved the same day delivery cut-off time from 12:00 to 16:00 and we also introduced home delivery,” explains Bacher.

Future plans

Bacher says the business will continue to be the best it can be, with personalisation remaining a key driver. On the floral side, there are two focus areas over the next year; the introduction of home delivery and the scaling up of wedding deliveries.