It’s not all about e-commerce

Opinion – Dr Raymon Krishnan
In retail, the focus today is very much on e-commerce and there is much being said about how it is taking over traditional retailing. Lower costs, a wider selection of suppliers, and options with the convenience of access anytime or anywhere makes buying online an attractive proposition.
Like with many trends, the tide seldom moves in one direction. Take mobile phones for example. At a certain point, the market realised that phones needed to be big enough to be used comfortably and had to be practical. So phones (and not just smart phones) started getting bigger until they were right-sized.
Something similar seems to be happening in retail. In the US, brick and mortar retailers account for roughly half of online sales and related activity. Disruption of traditional commerce models continues to accelerate at an unprecedented pace and retailers are being forced to re-evaluate how they go to market, balancing front-end footprints with back-end fulfilment capabilities and their overall digital presence. At the same time, the uberisation of freight and FaaS (Freight as a Solution) offerings, and warehouse sites that combine prescriptive analytics capability, are resulting in flexible networks and infrastructure capabilities. These developments are elevating supply chains and logistics strategies into must-have, strategic differentiators.
In the experience economy, meeting consumer demand requires a seamless partnership between front-end retail service and back-end fulfilment capabilities. Additionally, retailers cannot rely on just one, ‘go to market’ channel. More and more companies are realising that an omni-channel approach is needed for long-term commercial sustainability. This does not mean that shopping malls are going to have people flocking back to them. What it does mean is that channels and resources to markets will need to be relevant and differentiated as opposed to ubiquitous.
Investing in e-commerce and digital marketing, often with insufficient focus and prioritisation alone is not what consumers want and the simple fact of the matter is that the majority of retail purchases, in virtually all categories starts online and till today, digitally influenced physical store sales are far bigger than pure online sales.
The future of omni-channel will not be evenly distributed across all channels, and challenges will still remain for brick and mortar malls and stores. Retailers need to have a well-sequenced roadmap of digital and conventional marketing, combined with channel integration initiatives rooted in a deep understanding of customer behaviour and underlying economics. The scattergun approach many have taken in implementing an e-commerce strategy has not proven to be successful. A laser focus, targeted at specific groups or areas, will be what results in success through the coupling of rich datasets and consumer insight.
This is good news to me. I am a little old school and still like the personal interaction brick and mortar stores afford the consumer. Being able to touch and feel what exactly I am intending to buy is another plus point, and I am sure I am not alone. E-commerce is not the be-all and end-all and the winning formula will be one that is balanced and measured.
Dr Raymon Krishnan is the president of the Singapore Logistics & Supply Chain Management Society and editor-at-large of LogiSYM.