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Retailing Or E-tailing?

Will retail continue with the traditional way or move to online retailing?

Image by StockSnap from Pixabay

Nowadays, marketing channels play an effective role in delivering products and services to end-users. Retailers are also taking different forms because of their greater connection with them. For example, some consumers are interested in visiting the store and touching the product instead of buying it online. Some also review products online and purchase in person. Of course, this is affected by the extent of the consumer engagement (high engagement, low engagement), which we will discuss in the following articles.

Properly responding to the interests of consumers and instilling a positive perception of the existing marketing channel has led channel specialists to meet their needs through multiple channels and ultimately through Omni-channels. This necessitated changes to traditional supplier and vendor processes. For example, the Walmart store told its suppliers that all products must have an RFID chip. This can both enhance the store’s warehousing system and facilitate the tracking process as well as simplify the customer self-check-in. It will, of course, also incur a lot of costs for distribution channel members.

The question now is whether retailing will continue in the traditional way or whether due to the widespread advances in the communications, apps and consumers need to reduce the ordering process time until delivery, is better moving to Online Retailing?

As we know, different forms of retail are department stores, mass merchandisers, hypermarkets, speciality stores, category killers, convenience stores, franchises, buying clubs, warehouse clubs, direct retailers and etc. If Walmart can be cited as an example of almost all of these forms in its portfolio, it can be said that it literally completes customer service by providing electronic retailing and minimizing dissatisfaction and return rates.

Recently, Amazon has created stores that are without any salespersons. In these stores, cameras are installed on the shop floor and electronic sensors detect each buyer and find out what products to choose, and when leaving, the merchant’s credit card is withdrawn. Such stores may be the solution for customers who are not particularly interested in shopping through apps and websites and should be sure to check the product closely but do not want to be left behind in the growing industry. 

These stores were first launched in Seattle that was culturally ready to embrace this technology. The question now is, is this kind of service available in developing countries or is it still a long time to cultivate for customers?

As we know, online retail sales in the Middle East account for an average of 3% of total retail sales due to low prices, online selection, and convenience of in-store shopping. Of course, 90% of these online orders shipped from outside the Middle East. The rate in Asia is about 20.4% in 2019. The rate in the UK in 2018 is around 17.8. This indicates that the Asian average is roughly equal to the global average. This equality can be the result of the efforts of companies such as Alibaba.

Some of the reasons this rate is much lower in the Middle East than in Asia and Europe could be the lack of technology infrastructure, lack of proper financial policies, lack of proper customer culture, and the inability of suppliers to adapt to retail and end-customers. Mostly mentioned. Failure to keep up with the new policies and developments of world trade can destroy a country’s retail economy. Addressing this issue requires the extensive cooperation of governments and commercial companies at the national and international levels.

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Kaveh Hatami
Written By

An Iranian born, Kaveh Hatami received his PhD in Marketing Management and has published numerous articles in various fields of marketing and has translated many academic textbooks in the field of marketing that is being taught at masters and doctoral levels. Represented Iran in the OECD in 2016, he is also a lecturer specialised in marketing courses at Islamic Azad Universities as well as Applied Science Universities. He has a background in consulting large retailers, distribution channels, running market research, start-ups and cooperating with small business as a facilitator. Follow him on LinkedIn, Twitter and Instagram.

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