New normal: For some, it’s not eCommerce instead it’s Compelled Commerce
During my last vacation, I wanted to buy a mixer grinder for my Mom, I went online and researched different products and nailed down to a couple of them. Then after discussing with my mom and wife I decided to go to the shop and buy it ( the instant gratification thing).
I went with them to one of the oldest and biggest brick & mortar electronics retailer in our home town. We straight away asked for the product which we were looking for and the front office allocated a saleswoman to us and she took us to the third floor of the shop.
She showed us the product, it was the same but the price in the shop is much higher than what I have seen online. Then I asked her is this the final price, she said “ Yes sir! this is the discounted price ”.
I pulled out my phone and started verifying the price online. We saw the price in the online platform is much lesser. I showed her the price online and the discounted price she mentioned was the listing price in the online site. Plus they are now selling on a 30 % discount on top of that. Hence I asked why is this so, you don’t have to give me the same price as online but the difference is so huge.
She got irritated and said “ Then sir please buy from there and she started walking to the ground floor” and she continued “e-Commerce is so simple they just list the product and send it to the customer when someone buys it. We cant do that as we have additional overhead charges”
After hearing that comment I decided to get rid of my instant gratification feeling and buy online.
A year later, now the same retailer is forcing themselves to be online. Now they are realizing that listing online and selling online is not that simple.
The pandemic has pushed almost every retailer out of there comfort zones and almost everyone is trying things online, many started listing their products in online market places, and others have started working on their websites.
We should consider these groups as “compelled commerce” and not eCommerce. Because they didn’t want to do it earlier or was not ready to covert the brick and mortar concept to a digital-first mentality. Now they are forced to do eCommerce and hence we should call them compelled commerce.
Will they all succeed? What all they should consider doing before jumping into eCommerce.
Small businesses can right away start the eCommerce journey but it’s not that easy for the big brick and mortar only retailers.
You might be wondering why? If the small players can do it then why can’t big players who are already in the market for such a long time with these many networks of stores?
When you decide to move on to (or forced to ) eCommerce don’t start looking at the competition and see how their sites are looking like, what functionalities they have, and then try to copy those. Because they might have invested in proper eCom platforms a long time back and they will have proper back end systems to support those.
Almost everyone thinks eCommerce as what you see on the website, but the fact is the devil is in the backend. Which includes backend systems and backend operations, you will realize this only after starting the operations.
So when you are forced to start suddenly you won’t have the backend systems or operations ready. All of these have to be handled manually.
Doing a manual operation of listing products online, updating stock, price, and all operations until last-mile delivery packing is easy for a small business. Because they have a fewer number of products, and less number of locations to manage. But for a brick and mortar retailer, this is exponentially higher plus they will have one or more backend systems already existing. This makes it extremely difficult to manually manage everything.
So what should you do,
Look at your customers and see how can you offer your products to them by keeping the same advantage or edges you have in the physical stores. Give priority to this and start building a decent frontend experience.
Along with this, you need to look at the skeleton of your eCom infrastructure and see what all weapons you have in your arsenal. How can you use them to compete with your competition? Do you have the budget to build that? If not then think about what best can you do with the current systems. Because almost every business will be cautious in spending money right now.
Take a look at the 10 basic things a brick and mortar retailer has to do before they decide to go online
- Understand your product
- What is your buying pattern?
- What is the frequency of replenishment & newness?
- How you buy your product
- As packets
- As individual items
2. Do you have product data saved in your system if Yes, what is the quality of that
- Product content
- Photoshoot
- How to get items for photoshoot
- Do you need multilingual content
- How to set up a photoshoot pipeline
3. Store and Warehouse Operations
- How you store your products ( Physically in the warehouse)
- How many warehouses/Stores you have
- How are you handling replenishment cycles
4.How your operations are right now
- How you store your products ( Physically in the warehouse)
- How many warehouses/Stores you have
- How are you handling replenishment cycles
5. Platform and Integration for eCom
- E-com Platform
- How to integrate with your eco-system or do you even need integration
- What all backend systems do you have
6. For a quick launch which all systems have to be manually updated
7. Payment
- COD
- Credit Card
- Click & Collect
- Payment gateway
8. Fulfillment Location
- Store fulfillment
- Warehouse fulfillment
- Fulfill from both ( This is not advised without integrating the systems)
9. Carrier partner for delivery
- Forwards
- Returns
- Packaging
10. Customer care
- Most of the brick and mortar retailers won’t have customer care
- Set up a customer care
Take a look at what a brick and mortar retailer has to do before they decide to go online. These are just the basics you need to think of before going live. Along with this exercise you have to do competition analysis, but keep in mind that you cannot outrun them because you are doing “ Compelled commerce”.
If you have a long term plan for eCom and compelled commerce being your very initial crude version then it is still ok strategy to start with. If it is not this way, then all Compelled Commerces are going to Rest in Peace.
