E-commerce´s Role in Retail

by Lenka Matthews

E-commerce is one of the “hot” topics discussed almost at every retail conference or meeting and it is logical as online sales grew from CZK 51 bn in 2012 to 98 bn at the end of 2016, and are expected to reach CAGR of 9.61% by 2020.

Turnover in Czech E-commerce since 2012
Turnover in Czech E-commerce since 2012 (source: APEK, Heureka, 2017)

Having said that, it is my long-held belief that e-commerce is not a risk for retailers, but an essential extra channel they can exploit to reach another potential group of customers. It is far from being a threat, it is an opportunity for retailers in the Czech Republic which are capitalising on record-high consumer confidence and spending power.

Smart, successful retailers combine several channels and offer customers greater choice, but at the same time, every retailer should tailor their “omni-channel” strategy to their brand and concept positioning. They should be able to answer questions about their market position, who their customers are and how to reach them ideally.

Each channel has its strengths: for online it’s easy non-stop access. Click and collect combines online accessibility with the shopping experience and shopping assistance. Brick-and-mortar stores can hugely benefit from excellent customer service, human interaction and experience, not to mention that brick-and-mortar stores are open 7 days a week, usually 9 am to 9 pm.

Using more than one channel can help to boost turnovers and additional income for retailers and also increase their competitive advantage.

Recent years in retail have shown that although online sales and their significance in retail are growing, retailers that were originally online-based (Alza, Zoot etc) have opened brick-and-mortar stores to become more accessible and to reach more customers.

ZOOT výdejna radostiPub of joy by ZOOT.cz

Czech customers, buoyed by strong GDP growth and lowest unemployment rate since November 2008 matching market expectations (the unemployment rate in Czech Republic decreased to 4.1% in May 2017 from 5.4% a year earlier), are willing to spend more money, but are expecting variety, choice and high quality of products and customer serv