The way consumers purchase goods will change, forever.
Retail 2.0 is the natural evolution of brick-and-mortar retail and traditional e-commerce. Giacomo Castelli, Head of Partnerships delves into Jinn’s vision.
A few days ago I came across an article on Retail Wire reporting a recent Adobe survey stating how price and free shipping remain primary reasons for online shopping, but convenience is becoming an important factor, too.
Since the emergence of e-commerce, facilitated by an increase in internet penetration across consumers, retailers have exploited the extraordinary reach of an online catalogue of shoppable items, deliverable in a few days or even less. However, according to a report by Retail Research, in 2016 only 9.4% of European retail sales are made online.
How can retailers scale and bring their share of online sales to — say — 30% while increasing their profitability?
Traditional e-commerce has a standard distribution model: products are sold through a web interface and delivered from out-of-town distribution centres or warehouses. Such model poses some challenges, including: high delivery costs, moderately long delivery times and elevated return costs. It is hence not a substitute for high-street shopping as more choice comes at the expense of instant gratification.
Retailers are starting to realise how:
1. Consumers don’t fully perceive the value from being able to shop online
Consumers today demand free shipping and hassle-free returns. They are not willing to pay a premium for the next-day delivery of their items, even if products available online have lower average price points.
2. E-commerce can be less profitable than brick-and-mortar stores
The traditional e-commerce model (see picture below) entails a heavy cost structure and is not easily scalable. By relying on decentralised storing space, scaling traditional e-commerce would involve capital expenditures and physical space availability.
A potential solution for retailers, is to take advantage of their urban footprint of stores.
In fact, as argued by Peter Sachse, Chief of Stores at Macy’s:
“We’ve spent the last 153 years building warehouses. We just called them stores.”
By leveraging their capillarity, as outlined below, retailers can ship from stores and dramatically improve speed to consumer and service levels, while reducing inventory costs and distribution costs.
The philosophy of Retail 2.0 is to exploit the core competencies of retailers, online aggregators and last-mile delivery providers, in order to offer the final consumer a remarkable experience.
Jinn embraces this philosophy: our mission is to bring urban stock online, making it shoppable and deliverable in under an hour.
Retailers can focus on product design, while Jinn aggregates urban stock on a go-to-platform. Users can conveniently order anything they want, and get it delivered in 30 minutes, with their payment information safely stored.
Interested in finding out more about how Jinn enables retailers to ship-from-store and exploit their urban footprint while offering great customer service?
