Stationary retail on the way to becoming a multichannel provider?

Online retail sales have increased significantly as a result of the Corona crisis. Compared to the previous year, the increase was around 17 percent. The growth was strongest among well-known large online retailers, who recorded an increase of more than 20 percent. Nevertheless, the real winners of the crisis in the long term could be smaller shops if they consistently exploit their opportunities now.

Opportunities for new online providers

Compared to the more than 20 percent increase in sales achieved by major providers, the roughly five percent increase that stationary retailers achieved on their online platforms seems modest.

Nevertheless, these brick-and-mortar retail platforms could be the real winners of the crisis in the long term. For example, 35 percent of buyers surveyed in a study said they had tried one of these small online shops for the first time. More than half also stated that they would pay more attention to offers from retailers in their own region in the future.

Many of these small retailers decided to use alternative distribution channels during the lockdown. For example, customers could order items by phone or email, which would then be delivered to their front door. Some of these small retailers had probably never heard the term “multichannel” before – but they had suddenly become multichannel.

What was originally intended as an improvisation during the crisis could develop into a permanent solution. At least that’s what the majority of customers want. Online orders from neighborhood retailers could therefore develop into a trend that outlasts the Corona crisis.

And this is precisely the reason why the short-term boom during the crisis could prove to be a Pyrrhic victory for the major providers. Even before the crisis, there was an often observed discrepancy between the results of customer surveys and the actual behavior of customers on this issue.

The expressed willingness to support local retailers was always great. But the temptation to shop from the comfort of your sofa was apparently greater. If local retailers can resolve this contradiction through suitable online offerings, they will be able to compete for market share from the larger providers.

In any case, Corona has given many retailers the idea to try it. They also have little choice. The strongest sales growth in online retail was recorded in the second quarter for food, at 91 percent (!). So there really isn’t an industry in which established retailers don’t have to think about additional online offerings.

Emphasize the regional character in marketing

There is a blueprint for a successful strategy to compete as a regional provider with the big players. In many regions of Germany, individual farms or producer groups have managed to successfully establish regional brands.

Some elements of this strategy are very specific to agricultural products and difficult to copy, others are not. Support for the regional economy and the associated securing of jobs in the region are regularly emphasized. These arguments can easily be transferred to retail.

The second pillar of these campaigns is the aggressive differentiation of producer companies from large industrial agricultural companies. Regional retailers can also successfully copy this argument. The numerous media reports about the conditions in the logistics centers of the online giants offer enough starting points to aggressively distance yourself from them.

Concrete starting points for an online strategy

In many cities there are already advertising groups of retailers from individual district centers. This idea can be transferred relatively easily to the online world by combining retailers to form a virtual shopping center.

This has already happened in isolated cases. A simple question should not be ignored: What are the wishes of the customer who is specifically looking for offers from the neighborhood for their online orders? He’s definitely not looking for the cheapest offer online. Rather, he is looking for confirmation that he is doing the right thing by supporting the small, medium-sized retailer in the competition against large international corporations.

Once again, the parallel to the agricultural sector comes to mind, where more and more customers are not just choosing organic products because they assume the food quality is better. But of course there is nothing wrong with emphasizing the very practical advantages of buying online from a local retailer. Wherever necessary, online purchasing can also be combined with personal advice.

The sales model of ordering online and picking up the goods on site is also becoming increasingly popular. The food trade in particular is already practicing this quite successfully, although this model is more widespread in other countries than in Germany. Last but not least, complaints or returns are of course much easier if the dealer is based in the neighborhood.

A challenge for internet agencies

Brick-and-mortar retailers will demand simple solutions to enable their customers to order online. The nationally active chain stores will rely on professional solutions based on well-known patterns - they usually already do so today.

For the countless small retailers with a narrow local catchment area, other solutions are needed. The number of page views and orders is low; single-digit daily access numbers are not uncommon. Enabling every retailer to go this route will require minimalist web designs for very tight budgets.

A short conclusion

During the Corona crisis, the willingness to support retailers and service providers from their own region increased.

Surveys suggest this willingness will outlast the crisis. What will be crucial is whether local retailers are able to enable their customers to shop regionally without sacrificing the usual convenience of online shopping.