The difference of electronic commerce and traditional retailing

When I was teaching at American business School more than 10 years ago, the College magazine asked professors to predict the future of science and technology in the next 20 years. I wrote: "The Future of computers will be everywhere!" Maybe it's on the wrist like a watch, maybe it's on the glasses, maybe it's implanted in the skin. The driving mode can be used with voice, even can be a person's thinking. Although I am still a bit ahead, I still believe that these things will be achieved. Now let me make a new prediction, I will say: "The future of E-commerce will be everywhere!" The vast majority of retail enterprises in some way involved in E-commerce – may do it themselves, may be done on other platforms, may be done by the operators, may be part of their own capacity plus professional power to provide the ability to complete.

Although E-commerce is the retail of this large definition of a branch, but it and the traditional offline retail has many different, some differences even in nature. Not having a deep understanding of these differences leads to a misguided path. We made a mistake when we first created shop 1th--using the online retail catalogue and posters for website marketing. found that the conversion rate is very low, customers only use the phone to buy a few of the most amazing posters on the site of the thousands of items on our website indifferent. and catalogs and posters can not display inventory and price of real-time information, not e-commerce practices. When we realized this, we stopped immediately and explored the right way to sell the electricity business.

I think that the main differences between E-commerce and traditional retail in the following areas:

Physical characteristics

Traditional retail has physical stores, display physical goods. Each store can only accommodate limited shelves by space restrictions, resulting in limited sales of categories and varieties. Customers come to shop, subject to physical distances and traffic restrictions, and each store covers only a limited radius of the perimeter. Generally have business hours limit, 7x24 operating cost is too high. The main costs are shop rents, property and shop operators cost.

E-commerce is a virtual shop, merchandise through pictures and text display. Due to door-to-door, distribution capacity determines its coverage radius, theoretically can be a network covering the whole country, and even around the world. There are infinite shelves, if the system has scalability, add goods and customer base only to increase the server, information storage capacity and bandwidth can be. Such long tail goods can be sold, just manage inventory. New products, high-value goods and unpredictable sales can be done by consignment, a single order and a transfer. Orders are automatically processed by the system and can be 7x24 services without additional costs. There are no rental and personnel costs associated with physical stores, but there are packaging materials and distribution costs.

Product Display and search

Traditional retail store goods in accordance with customer shopping habits, the sales volume, high brand awareness of goods and promotional items placed in a conspicuous position and easy access to the shelves of customers. In order to increase customers ' buying opportunities, shops tend to place the products that customers must buy (e.g. fresh) in the deepest places, allowing customers to see other goods on the way to find impulsive buying.

E-commerce commodity search depends mainly on keywords, categories, price range, function and other searches, the display of the product melts pictures and text and other content as a whole. Using information-rich features, the site provides customers with a variety of shopping decision support including: a the list of hot products; b) multi-angle merchandise display picture; c) A variety of sorting methods (price, inventory, selling); D personalized recommendation; e) clear classification and presentation; f) related product recommendation; G. Commodity parity (h) combination of commodities;

Market means/marketing strategy

Traditional retail promotion relies mainly on DM and advertising (outdoor, newspaper, TV, etc.). In-store marketing can use the site environment and sound, light, taste and other effects to stimulate the purchase, but also through sales staff and customers face-to-face exchanges to promote products.

The electric dealer's marketing way has SEO, the EDM, the net union, the portal website advertisement, with social intercourse, the game, pays the website cooperation drainage, and so on. Electric dealers have a large number of customer search, collection, purchase, historical orders of goods related to the degree of data and information, can be accurate marketing. can also be used landing page, links, user comments, scoring system, and so on to provide customers with knowledge, experience, authoritative related content.

Supply chain architecture and management

Traditional retail use of three-dimensional library, goods generally do not need to subpackage, only to be in the box or into the carriage of goods in and out. Inventory for the warehouse and shop multi-level management. Distribution from DC to RDC (regional warehouse) to the store, the middle may pass a cross docking. The goods placed in the warehouse mainly consider the selling degree of the goods and the efficiency of the upper and lower shelves.

The electricity merchant's storehouse is mainly the plane storehouse, the commodity takes the subpackage after the box warehousing, according to the customer order to pick the goods (to increase the efficiency will press the wave time and the picking density design wave time and the path), finally is combined the single and the packing. The inventory only needs to consider the management of the picking area and storage area inventory in the warehouse. The last kilometer of distribution efficiency is very important. The goods placed in the warehouse mainly consider the selling degree of the goods and the relationship between the goods purchased by the customers.

Talent structure

For traditional retailing, it is important to have rich experience in retailing. At the same time requires senior procurement and store operators.

E-commerce requires a large number of it and analytical talent, including business needs analyst (Business Analyst), System development Engineer (SDE), business Intelligence Analyst (BI), system optimization analyst, and so on. It is very important to know the network marketing talents. As a result of the supply chain links in a number of picking, sorting, packaging and distribution process, increased warehousing and distribution personnel.

Although E-commerce accounts for the total retail share of the society is constantly expanding, the future of these two types of business must be coexistence and complementarity, providing customers with a variety of options. The two have their own unique advantages: traditional retailing has physical goods experience, merchandise immediately available to stimulate impulsive purchase, shop assistants close service and other advantages; e-commerce has low-cost, massive customer information to help precision marketing, Word-of-mouth marketing communication speed and breadth, and not subject to geographical, time and shelf space constraints and other advantages. Their own strengths and weaknesses, will have their own piece of the sky.