“If you’re still not concerned with the internet, time has already run out for you.” A bold statement, but Wim Boesmans, business consultant retail at GfK can prove it. Armed with numbers about online growth in the Benelux, GfK will talk about why making the ‘switch’ is necessary during its seminar ‘E-commerce: Why Switch?’ at the RetailDetail Congress.
All this fuss about the switch… It worked in the past, why no stick with something that is good?
W.B.: “Correction: something that was good. What worked in the past, does not work anymore. Technological developments have changed the lives of modern men and women. In Belgium alone nearly three million smartphones and tablets were sold in 2012, a fairly high number considering there are only eleven million Belgians.
Worldwide more than 1.1 billion devices with easy internet access were sold in 2012 (smartphones, tablets, laptops, smart TV’s): that entails a growth of 50%. This means e-commerce will keep on growing exponentially, because the first and most important condition is met more and more: easy internet access. This is why the strong rise of mobile internet is so important.”
Internet access may be omnipresent, but is a smartphone for example really an extra sales channel?
W.B.: “The smartphone might not be a device made for ordering products or for direct purchases, but is convenient for comparing prices. You see this happening more frequent.
Furthermore a tablet is perfect for shopping: you can say there is a difference between ‘lean back’ internet and ‘lean forward’ internet: to use your computer to go online – and place an order – you have to get up, go sit at your desk and start your pc. You have to make a real effort. With a tablet you even do not have to get off your couch to buy something. We are evolving more towards that kind of internet and it signals a significant change in purchase behaviour of the consumer.”
Is Belgium making up ground concerning e-commerce or not?
W.B.: “Belgium still lags behind when compared to other European countries. E-commerce is growing in Belgium, but it also keeps growing in other countries. That gap has not been closed yet. To predict how it can and will evolve in Belgium, we can look at The Netherlands: while the online market is more mature there, there still is a visible growth.
The fact that Belgium lags behind has different causes. We have a very dense shopping network for instance. In France it can happen you need to drive more than an hour to the nearest hypermarket, making online shopping very attractive. That is not the complete explanation however: the Netherlands is also a small country with a dense shopping network, but it is very active online. This means it also has something to do with a more conservative consumer.
The Netherlands also has its own major players on the online market, while in Belgium often foreign companies have the biggest significance - such as Amazon, Bol.com or Coolblue. The market in Belgium is too small to make big investments, even when you consider Belgium as one market, while in reality you have to differentiate between the Flemish and the Walloon market because of the language barrier. Making a profit is that much harder in Belgium.”
A central question at ‘E-commerce: Why Switch?’ will be who grows the fastest: pure players or clicks & bricks. But is cross-channel not just a halfway-point to completely online retail?
W.B.: “Cross-channel has a few big advantages: for retailers with a broad network of shops, it is a big advantage to be able to work via two different channels. They offer the convenience of ordering online, but if there are problems or when something needs to be exchanged customers know who to contact. It doesn’t mean they will always do so, but the possibility exhumes trust.
There are also products that cannot be sold online. For books, DVD’s or travel online or offline does not matter, but laminate or parquet flooring for example the consumer really wants to feel. There is almost nobody that would buy this kind of product without seeing it first-hand.
The consumer does not think in terms of channels, he thinks in terms of brands. He does not think “I will buy this product online and that one offline”, he buys at a retailer he trusts, regardless of the channel. It is not an or/or-story.”
What else can we expect from GfK on 25 April?
W.B.: “We will announce which countries are furthest ahead in e-commerce, which markets score best online and what the growth of e-commerce was in Belgium and The Netherlands in 2012.
We will also see if there is already a noticeable impact on stores and we take a closer look at the market of ‘technical consumer goods’ or sustainable consumer goods (going from consumer electronics to IT, photo, telecom and household appliances). The growth of that market in 2012 was completely thanks to online sales for the very first time, for both ‘pure’ as cross-channel retail. It is definitely worth looking at the evolutions in that sector.
Furthermore we will be talking about prices: do consumers buy cheaper or more expensive online? It is for instance not unbelievable that a consumer will visit a specials when buying a high-end sound system, instead of buying it online.
We will even be making a brief comparison between prises of several products. They will show that for instance the best sold TV’s can be found cheaper online than offline. If such patterns are visible, retailers should draw lessons from them.
Our message is you can no longer ignore the internet. Now is the time to take action and not a minute later.”
‘E-commerce: why switch?’ is a seminar during the Retaildetail Congress on Thursday 25 April in San Marco Village in Schelle (near Antwerp), from 14:00 to 16:00. The complete program of the seminar (PDF) can be found here. Participation in the seminar also includes free entry to the RetailDetail Congress; for registration please visit www.retaildetailcongres.be.