Working towards an effective digital transition
More than 50% of stores in France have not yet begun their digital transition. And those which have started to digitalise their business are struggling to achieve a return on their investment. While small and large retailers continue to put up their shutters once and for all due to pressure from the e-commerce giants, it is vital that the traditional traders’ transition to unified commerce speeds up. But not in any way or at any price.
The French remain very attached to their local businesses, whether independent shops or large retailers. In a recent study conducted on behalf of Rakuten by Harris Interactive, 93% of those questioned believe that shops are an important asset in town centres. Although certain concepts have been successful in breathing new life into town-centre or local shops, particularly in big cities, other retailers have had a harder time since the advent of e-commerce platforms. The ready-to-wear clothing sector is especially hard hit. The latest retailer to put up the shutters: Forever 21. The clothing market has seen its value fall by 14% over the last ten years, according to statistics compiled by the Economic Observatory of the French Fashion Institute.
While e-commerce continues to develop and marketplaces are becoming increasingly popular for online transactions, only just under half of retailers have digitised their sales process. With very different degrees of success. A study conducted in the United Kingdom in 2017 showed that only 3% of shops had achieved a return on their digital investments. Online stores or a dedicated corner on an e-commerce platform or digital equipment in stores (hotspots, smart touchscreens, digital cash registers) are some examples of how some brands are going digital. There is so much on offer, and retailers, for whom digital technology is not their core business, often find it all very confusing. So here we look at the main challenges retail companies face with regard to the unification of the sales process, including traffic acquisition, the act of purchase and customer retention.
TRAFFIC ACQUISITION: FOCUS ON MARKETPLACES AND SOCIAL SHOPPING
Marketplaces are becoming an increasingly indispensable player in retailing. The latest barometer survey conducted by the Fédération du E-commerce et de la Vente À Distance (FEVAD – Federation of E-commerce and Distance-selling) shows that they now account for almost a third of online transactions. To the point that they now offer a credible alternative to even creating online shops? Although they are still in a minority (15%), only selling goods online via an e-commerce platform, traders recognise the distinct advantage it offers. Marketplaces provide optimum and cheap ranking, whereas organic acquisition would require thousands of euros. Social networks are also becoming increasingly popular with retailers as a means of driving traffic online or in-store. Facebook, Instagram and Pinterest have reinvented themselves and have gradually become fully-fledged e-commerce platforms. Social selling offers exciting possibilities for retailers, while mobile commerce passed a new milestone in 2018 with 35% of business coming from m-commerce sites.
ACT OF PURCHASE: MOBILE PAYMENT, PARTICULARLY USEFUL IN TOURIST AREAS
Digital tools have started to appear in retail outlets: almost one in two shops now has at least one device. However, French customers still value the face-to-face interaction with sales assistants and do not find digital equipment particularly appealing. The digital technology that they consider most useful includes mobile payment (44%), virtual reality (43%) and screens for trying on clothes virtually (43%). It is interesting to note that one in two French people do not trust mobile payment. This reluctance is out of step with the massive adoption of these virtual solutions by American and Asian tourists, who made up a considerable proportion of the 90 million visitors who visited France in 2018. Consequently, the main Chinese (Alipay, WeChat Pay) and American (Apple Pay) suppliers of mobile payment solutions have entered into partnerships with some of the big French retailers, such as Galeries Lafayette, BHV and, more recently, Franprix.
CUSTOMER RETENTION: HYPER-PERSONALISATION VS. DATA
Accenture Consulting believes that it costs five times as much to attract a new customer as it does to retain an existing one, whereas a customer who has signed up to a loyalty programme can generate 18% more revenue for a retailer. Awareness of customer expectations and hyper-personalisation have become the key reasons why customers make and continue to make purchases. 66% of the French consumers questioned are more likely to buy from retailers who personalise their customer experience. However, 40% of them said that they are alarmed by the fact that technology can now interpret their needs correctly and anticipate them. The Cambridge Analytica scandal brought to light various examples of the misuse of private data. Retailers have also been subject to increased vigilance from regulators since the introduction of the General Data Protection Regulation (GDPR). This means that retailers must ensure that data is used appropriately, first and foremost for the purpose of improving the customer experience and offering hyper-relevant products and services.
At each stage of the purchasing process, traditional retailers need to work towards an effective digital transition by putting the customer at the heart of their strategy. By giving thought to uses and experiences, shops can ensure that they provide tangible benefits for customers and achieve a return on their investments.
   Source – Fevad – Les Chiffres Clés du e-commerce 2019 : https://www.fevad.com/cartographie-du-e-commerce-en-2019/
 Baromètre Shopper published by Samsung in 2018 : https://www.lsa-conso.fr/les-francais-encore-reserves-vis-a-vis-du-digital-en-magasin-etude,289826
 Etude Accenture – “Seeing beyond the loyalty illusion” : https://www.accenture.com/_acnmedia/pdf-43/accenture-strategy-gcpr-customer-loyalty.pdf
The team behind this project
eCommerce Practice Manager
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