Expert interview with Philippe Humeau, CEO of NBS System:
Philippe, please tell us about NBS System.
NBS System was created in 1999. We’ve got offices in Paris and London. We provide eCommerce and Magento managed hosting. We’re the French leader in Magento hosting, with over 1800 sites hosted. We also provide IT security audit, test and consulting. Our Research & Development has developed CerberHost, a highly secured private cloud, guaranteeing the highest security possible to clients at 99.99%. We evaluate IT security and protect the company’s information systems and valuable data.
What are the trends of today’s digital shoppers?
2/3 of shoppers start their shopping journey online or mobile before deciding to go to the physical store. Retailers must be present on these channels otherwise they lose substantial sales.
When 100 shoppers enter the store, 50% do the window shopping, 50% want to buy something but only 15% ends up buying something.
So, what happened to the 35% of shoppers who wanted to buy but didn’t?
85% of them didn’t buy, because they couldn’t find the proper color, size, fit or model.
If you do the math: 35%*85% = 30%.
Therefore, 30% of people entering the store with an intention to buy didn’t buy in the end due to assortment problem. As a result, the store is losing about 30% of sales turnover!
How can the physical store solve this problem?
The store must provide shoppers the possibility of buying online in the store and have their orders delivered at home. The store can then save those 30% sales that would have been lost otherwise.
The delivery in the store from online orders is highly recommended as it brings more people to the physical store.
What’s the main characteristic of an online store?
There’s no space limit: Infinite stock and infinite space. It’s open day and night, moreover accessible from your bed. If we just focus on the space problem, a brand with 4,000 product references can all fit on the online store but can’t fit in the physical store.
What’s the key to a successful omni-channel strategy?
Sales associates in the physical store think they are in competition with the online store, for them customers buying online are not buying in the store but this is not true.
As an example, the CEO of H&M doesn’t really care if the turnover is coming from the physical store or the online store. The CEO sees the global turnover; physical and online stores are on the same level.
For pure-play retailers, the online shopper who buys online doesn’t affect anything on the physical store because it doesn’t exist. However, the shopper buying online who goes to the store to collect their orders (i.e. boots) is an opportunity for the physical store. The shopper would buy accessories like waterproof spray or a bag that goes with the boots. The online shopper in fact will contribute something to the physical store.
Online and physical stores are complementary, not rivals. They must unite together to increase turnover which is the key to a successful omni-channel strategy. Since the online store is a brand store, it provides service to all physical stores, driving customers to offline stores (i.e. delivery service in the store) and saving the sale when needed. Also, the physical store should get some commission as if the sales transaction was done in the store, thus eliminating psychological barrier from retail sales team.
2 shipping options essential in omni-channel strategy:
1. Buy online and collect from store.
2. Buy online in the store and ship to home.
Interviewer: Stephany Gochuico