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Economy

Retailing In The Age Of E-Commerce: Department Stores' New Everywhere Approach

Department stores executives are realizing that only a smart digital strategy can guarantee a future for them. The necessity of 'omni-channel' retailing progressively became obvious for these city-center venerable institutions.

Printemps, in Paris (Frédérique Panassac)
Printemps, in Paris (Frédérique Panassac)
Philippe Bertrand

PARIS - Last January, at the National Retail Federation conference, everyone was talking about "omni-channel" retailing. But what is it? We have come to know the term "multi-channel" retailing, which consists in selling products on the Internet as well as in shops. Now omni-channel retailing aims at taking advantage from all available means for shopping: stores, mobile phones, computers, catalogues, and so on.

It should be noted that august institutions like the French store Printemps, founded in 1865, or the Japanese Daimaru, born in 1717, come up against fierce competition from e-commerce. This can be compared to what department stores had to face in the 1970s when mega-retailers began to boom. Tsutomu Okuda, leader of J. Front Retailing, the Daimaru parent company, didn't hide the truth: department stores' sales dropped by 30% within a 20-year span in Japan.

"Click and collect"

These chains know that their future lies in omni-channel retailing. The best example is John Lewis, a British firm that makes 22% of its sales online. It has been rewarded as the "best e-commerce website of Great-Britain," ahead of Internet-only players, and is considered the most successful example of this kind of 360-degree strategy.

Andy Street, the company's production manager, explains the formula: to have as many products online as in physical department stores, to resist an escalation of discounts, and the possibility to withdraw the products from both the 29 higher-end John Lewis stores and 194 Waitrose hypermarkets that belong to the chain.

This is "click and collect" - a very good way to get people in the stores. Thus, Internet becomes a way to create a link, which can strengthen thanks to the improved contact with the stores themselves.

But according to Bernie Brookes, CEO of Myer, an Australian department store chain, omni-channel retailing also represents a challenge concerning the way to rule the different shopping channels. It also raises the question of the optimization of the stores' surfaces.

Robert Wallstrom, CEO of Saks, thinks that the main difficulty is to "offer customers a unique experience" at stores, and to give priority to services. Indeed, adds Andrew Jennings, German CEO of Karstadt: "customers know all the products and prices nowadays. Their expectations are higher. They take the control."

Read the original article in French

Photo - Frédérique Panassac

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Future

Livestream Shopping Is Huge In China — Will It Fly Elsewhere?

Streaming video channels of people shopping has been booming in China, and is beginning to win over customers abroad as a cheap and cheerful way of selling products to millions of consumers glued to the screen.

A A female volunteer promotes spring tea products via on-line live streaming on a pretty mountain surrounded by tea plants.

In Beijing, selling spring tea products via on-line live streaming.

Xinhua / ZUMA
Gwendolyn Ledger

SANTIAGO — TikTok, owned by Chinese tech firm ByteDance, has spent more than $500 million to break into online retailing. The app, best known for its short, comical videos, launched TikTok Shop in August, aiming to sell Chinese products in the U.S. and compete with other Chinese firms like Shein and Temu.

Tik Tok Shop will have three sections, including a live or livestream shopping channel, allowing users to buy while watching influencers promote a product.

This choice was strategic: in the past year, live shopping has become a significant trend in online retailing both in the U.S. and Latin America. While still an evolving technology, in principle, it promises good returns and lower costs.

Chilean Carlos O'Rian Herrera, co-founder of Fira Onlive, an online sales consultancy, told América Economía that live shopping has a much higher catchment rate than standard website retailing. If traditional e-commerce has a rate of one or two purchases per 100 visits to your site, live shopping can hike the ratio to 19%.

Live shopping has thrived in China and the recent purchases of shopping platforms in some Latin American countries suggests firms are taking an interest. In the United States, live shopping generated some $20 billion in sales revenues in 2022, according to consultants McKinsey. This constituted 2% of all online sales, but the firm believes the ratio may become 20% by 2026.

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