Dubai: All talk about brick-and-mortar retailers never getting along with their web counterparts is rather exaggerated.
In fact, these days they are more likely to engage in win-win relationships... and it is showing up in multiple ways.
Some independent portals have taken to highlighting the nearest store locations of “partner” retailers who are carrying stocks of the products being searched for online. And the portal secures a bit of revenue from doing so.
The maths in this is fairly simple — if the portal can show it has a sufficiently large user base, it can end up being a prominent marketing platform for the brick-and-mortar operator. And these days, retailers need all the help they can get to seal a deal.
“Essentially we are to omnichannel retailers what malls are to brick-and-mortar stores, that is, a place where shoppers go to start their experience,” said Nadim Alameddine, CEO of Pricena.com, the comparison portal that is now building up an off-line partner network in the UAE and Saudi Arabia. “Retailers looking to go online must utilise both their own capabilities and leverage the expertise of specialised partners.
“Affiliate marketing — when a marketing channel brings incremental revenue to an advertiser in return of a commission on sale — isn’t something new to online retail. Omnichannel retailers’ main concern right now is how to gain a greater share of online e-commerce while leveraging their network of physical stores. So, picking a partner who is capable of executing on technology and digital marketing is important.”
It also throws light on the fast maturing of the local online selling experience. While the category grows in double-digit numbers, it does not mean that all the e-commerce portals are making loads of money. Apart from the handful who have managed to show sustaining power — and in return pull in fresh private equity — there are many portals who have had to vacate the space.
After their initial enthusiasm, local brick-and-mortar retailers seem to have slowed down on their plans to develop e-commerce capabilities. Of the few who have done so, the returns are at best an add-on to their physical store sales, industry sources suggest.
“Local retail groups are finding that they cannot easily leverage their branding in the online space,” said an analyst. “It could be related to perceptions as consumers might believe they will only get the best deals from a pure-play e-commerce operator. And that the virtual platform of a physical retailer will only have prices that match what’s at their stores.”
As a consequence, retailers and e-tailers are searching for a common ground... and they seem to have found it in omnichannel. In many ways, this then becomes a marriage of convenience.
“If we look at the US as a crystal ball to predict the future of retail, you will notice that there is a convergence of online and offline,” said Alameddine.
“Amazon has started to open physical stores, and Walmart is investing heavily in e-commerce and omnichannel.
“Walmart’s huge network of stores is actually a strong competitive advantage over Amazon, and they might be able to offer a more complete omnichannel experience to their customers if they do it right.
“Brick-and-mortar stores are able to deliver a consistent experience that online stores and especially marketplaces are not [Amazon being an exception]. So, the big retailers here must focus more on leveraging their network of stores, on convenience and instant gratification.”