Daily Review: Online + Offline = The Future of Retail

Contrary to the widespread belief that physical retail is widely believed to be playing a diminishing role in modern lifestyle, the future of commerce will be at the intersection of online and offline worlds. Amazon + Whole Foods, and now Alibaba + Sun Art are defining the winning strategy in global commerce.

Chinese online shopping giant Alibaba pins its hopes on physical stores as it buys hypermarket chain for £2.2 billion

  • Alibaba will buy a 36% stake in Sun Art as it tries to cash in on China's $500 billion food retail sector.
  • Since 2015, Alibaba has invested around £7 billion in physical stores.
  • The move follows Amazon's £10.3billion purchase of Whole Foods earlier this year, allowing the organic grocery chain to cut prices on its best-selling staple products and begin a delivery service for customers.

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No longer brick-and-mortar vs. online retail: Customers view a ‘single lens’

  • Despite the ease of online shopping, consumers still crave the tactile experience of physical stores.
  • Rather than pitting the two channels against each other, retailers can secure a much larger wallet share by giving consumers the best of both worlds through the adoption and use of new technologies.
  • By offering complimentary benefits, as well as engaging customers via mobile, both in-store and online retailer channels can strengthen overall customer engagement and brand affinity. And the best news for retailers taking an integrated approach: higher revenues and profitability.
  • Examples: Amazon + Whole Foods, Walmart + Bonobos, Walmart + ModCloth.
  • The look before you buy experience requires a certain level of physical presence. Examples: Casper + Target partnership, Amazon’s Prime Wardrobe, etc.
  • Online comes together with offline through various beneficial strategies: added offline incentives based on online purchases, payment perks, a more personal customer experience offline integrated with rapid inventory availability online. Examples of blended omnichannel strategy: Best Buy, Home Depot, etc.

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