From pure player to phygital, there’s just one step: diversification!
The line between online sites and brick-and-mortar shops has disappeared. All the biggest brands have e-commerce sites. From fashion and high-tech to DIY and mass consumption, no sector has been spared. Over the past decade, many of these phygital (a contraction of physical and digital) brands have been among the most popular (e.g., Carrefour, Leclerc and Leroy Merlin).
Yet today, we’re seeing the opposite effect – online brands are starting to open concept stores and brick-and-mortar shops…
Mail order catalogs, physical shops, and an e-commerce site… Who’s behind this powerful brand?
While others folded in bitter defeat, this company went through a rough patch but recently bounced back with a novel idea: a surprising shift towards home decor stores!
We’ll put an end to the suspense… We’re talking about La Redoute, who – after having been the French leader in distance selling for several years – started opening brick-and-mortar shops.
Providing both fulfillment and point of sale solutions, these spaces were designed to centralize deliveries and facilitate orders…
Though the concept was good, it didn’t take off. In regard to deliveries, there was little real impact on the bottom line.
The company has since begun implementing pick-up points in already established local shops to bolster accessibility and branding.
The phygital transformation of La Redoute, a case study
Following numerous financial setbacks, including the purchase and subsequent sale of the company, and the dismissal of many employees in the process… La Redoute has found new legs developing a home decor collection.
Interior design boosted the AM.PM. and La Redoute Interiors brands so much that the success of the mail order catalog (read: Distance Selling) led to the opening of 53 Galeries Lafayette boutiques in 2019.
With 20 dedicated to decor and 33 to fashion, La Redoute is back and better than ever. Indeed, the brand well knows that home decor is one of the fastest growing markets today.
Sandrine Guichard, the managing director of La Redoute, explains the company’s investment in a customer’s need to try before buying:
“While we only display 5% of the collection, we want consumers to know the quality of our products. It’s a commercial investment.“
Why did AliExpress decide to open a store in Madrid?
The Chinese Amazon competitor opened its first shop in Europe in August of 2019, offering the popular electronics they sell online.
Spain was not a trivial choice, since it turns out to be the third largest export market for AliExpress. The Madrid store was opened to test the waters before potentially expanding to many more shops in the future.
Following Apple’s model: all the latest tech products (smartphones, laptops, video games, etc.) are lined out on a table and ready to be tested in store.
Emotional marketing plays a key role in the success of a sale. And AliExpress knows it!
For example, 71% of French people prefer to shop in-store over online because it lets them touch, test and try out the product.
Not content gambling on the fickleness of buyers, AliExpress offers a wide selection of products in store. We’re talking no less than 1,000 products from 60 different brands, as well as in-store team members guiding customers through their purchases.
In addition to emotional marketing, AliExpress has focused on customer experience and product availability.
Physical or digital, must we choose?
Some fear that the multitude of choices available online may cause customers to lose interest in buying.
On the contrary, if a store can test products before purchase and encourage customers to take the plunge, their online presence is essential for reinforcing user habits. Online shopping also comes with some very specific advantages, like product and service reviews.
And there’s more opportunity to enjoy discounts. As a matter of fact, the laws governing online sales differ from the laws concerning physical shops. Generally seen as more flexible (eg., drop shipping), price differences are allowed and measuring traffic is much easier.
Far too often seen as rivals, e-commerce and brick-and-mortar shops should complement each other.
La Redoute has opened stores but keeps its e-commerce site live, all while continuing to offer distance selling via mail order catalogs. Each channel serves the others. The proof? In 2015, AM.PM. saw sales jump by 10%, thanks in particular to its physical stores.
AliExpress is testing out in-store potential through the immediate availability of desired products and the opportunity to “try before you buy” – hoping to encourage purchases both in store and online.