eCommerce, the rise of proximity trade

Michele Caprini
10/03/2021
In brief
Proximity trading and e-commerce were until recently considered as mismatched pieces of the same puzzle. But it is no longer so today. The interest aroused for the recent acquisition of Selz by Amazon and the successes achieved by other online service platforms are drawing attention to bottom-up digitalization, whose scale and repercussions will affect all retail sectors.

Putting emphasis on the e-commerce numbers after the lockdown and in the present health emergency is a bit like preaching to the choir. What deserves greater emphasis, however, is the important differences of this digitalisation process in the world and in our country. What is happening affects the entire industry, owing to the forms and perspectives that characterize this phenomenon. It is important, in fact, to observe the involvement of those segments of retail hastily dismissed as also-ran and, indeed, predestined victims of e-commerce, or that, due to their size and characteristics, had moved sluggishly or not at all.

A broad and powerful digital push

A good starting point is found in the international news. In recent days, Amazon acquired Selz, an Australian company that provides technology services for the online commerce of small businesses. The acquisition comes as the third-party market of the Seattle giant continues to thrive, with more than 2.5 million small sellers accounting for more than half of its e-commerce sales. In fact, Amazon had already measured itself with this segment years ago with its Webstore platform, aimed at local companies committed to building an online presence, which however was closed in 2015.

The COVID-19 emergency has given a tremendous acceleration to bottom-up digital commerce. The value of goods sold on the Shopify platform in 2020 exceeded 119 billion dollars, with a rise of 96% over 2019. The results of the Canadian company, which provides technological services to about one million e-commerce users worldwide, have surpassed the already excellent ones of Target, the shopping carts giant and, above all, of a web institution like eBay.  Not only Shopify, of course: the race for digital commerce innovation, more or less forced by events, has led to significant growth even for major players such as BigCommerce, Wix, WooCommerce.

Proximity e-commerce

Even before the pandemic, e-commerce had dramatically increased its strategic weight. However, despite its impressive growth, the e-commerce channel still represents a minor part of total retail sales: worldwide it accounts for about 16% of global sales (source: Statista), while in Italy, in 2020, it did not reach 8% (source: POLIMI Observatory), despite a strongly differentiated trend among the product categories.

It is precisely the large traditional retailers, moreover, that turned digital innovation into a decisive competitive advantage. The strong online presence, focused on sales and, progressively more, on ancillary services has proved to be the ideal prerequisite for increasing store visits and customer loyalty. This applies to every trader, no matter how small or large it be.

Proximity e-commerce combines the advantages of buying on the web with the typical privileges of the neighbourhood shop. Brick-and-click, in short. An opportunity for small enterprises to react to the circumstances imposed by the emergency and escape the joint pressure of the supermarket and digital shopping centres. Home delivery and pick up at the store made easier, choice of products from the large online showcase and perhaps from a catalogue, direct products viewing and testing, drop shipping so as not to hold them in stock and thereby reducing unsold items. It is, of course, a matter of refining the approach with experience, so as to respond appropriately to problems that are inevitable at first as, for example, the lack of specific skills in managing the logistics chain

In fact, individually or in various associative forms, for small traders there is an increased digital transformation of different activities which, combined, have the same objective: bringing or bringing back the customer to the store whether it is bricks or clicks.

Social-proximity

The partnership between TikTok, the mandatory destination for short videos from mobile devices, and Shopify, made official in the United States in October 2020, has extended to Europe and, in particular, to Italy, France, Spain, Germany and the United Kingdom. Operators relying on Shopify’s e-commerce platform will now be able to present their product offering to the Tiktok community, which in Europe alone has tens of millions of active users per month. Shoppable ads, i.e. videos that enable direct access to the online shop, will be an unmissable opportunity, regardless of the store’s size and the products or services offered.

Social commerce, moreover, adapts better than any other sales model to the different characteristics of the markets and territories to which it applies, also due to its natural propensity for customizing the offer and creating communities. In this regard, WeChat’s experience in China has been disruptive owing to the obsolete patterns of the supply-demand relationship.

Change of scenario

The concept of pushed customization of the offer, sought and pursued by retailers in the most advanced markets, favours, in perspective, local companies, which are characterized by the nature of their presence in the territory. The disadvantage compared to marketplaces will be reduced by improving the purchasing cycle and customer relationship. To this end, digital innovation will be increasingly decisive, parting way with the classic rhetoric on neighbourhood shops.

Value identity is an increasingly valuable commodity for consumption. Convenience and safety at every stage of the purchase cycle, knowledge and strength of the consumer/small brand relationship, as well as transparency and sustainability, will mark the growing interest in local shops. This phenomenon will affect all trade segments, and will also be evident in catering. Digital innovation is not eternal in the forms it takes; it quickly changes as it is in its nature, shifting consolidated beliefs, market trends and seemingly irreversible power relationships. Awareness is the first step necessary for change, which is not always granted as a second-chance.

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