On the retailers’side

Different types of retailers

E-commerce has led to an increase in innovative combinations of physical and digital solutions through concepts such as “click-and-collect”, “ship-from-store” and other methods. Within the e-commerce realm, we can distinct the pure players and online marketplaces on the one hand and the multichannel and omnichannel players on the other hand.

Pure players are retailers that have an online-only presence by means of online selling platforms (e-retailers). These include online retailers such as Zalando and Zooplus as well as online marketplaces (e-marketplaces) that facilitate transactions between vendors and buyers such as eBay and Le Bon Coin. Some pure players are generalists, while others specialise in one sector in particular.

Multichannel retailers are mostly traditional businesses launching online services in order to catch a share of the e-commerce market. Examples include Carrefour, Auchan, FNAC and Walmart. The multichannel model can also be applied the other way around: for online players to test the market before launching a physical store network, such as applied by Tesco before it entered in the US. Multichannel retailers allow consumers to purchase online as well as “offline”, but do not facilitate to mix channels. Their online and physical retail channels function as separate entities and consumers interact with either one or the other (Ailawadi & Farris, 2017).

The distinction between pure players and physical retailers (so-called “brick-and-mortar” stores) is blurring more and more as companies adopt an omnichannel or “online-to-offline” (or “O2O”) strategy. Omnichannel retailers are similar to multichannel retailers in that they combine both physical and digital retail channels. Yet while the concept of multichannel aims at managing and optimising performance of each channel, the concept of omnichannel focusses on integrating activities across channels (Ailawadi & Farris, 2017). This entails that channels can be “mixed and matched” and used seamlessly, simultaneously and interchangeably (Buldeo Rai, 2019). Omnichannel retail is also described as “everywhere commerce” and “no-line commerce” (Beck & Rygl, 2015).

Omnichannel retail

Omnichannel retail promises more satisfied and profitable customers (Cao & Li, 2015) and provides access to rich customer data (Kraemer, 2015). Yet arguably the most important motivation for retailers to adopt an omnichannel strategy is the fact that consumer behaviour has changed.

Driven in part by the omnipresence of mobile phones connected to the internet, consumers have been combining online and offline channels even before retailers transformed their business models (Buldeo Rai, 2019). As stated by Pernot (2020), the “hybridisation” of retail that bridges the dichotomy between online and physical commerce goes together with a hybridisation of consumers’ purchase practices.

The transformation to an omnichannel retail model brings about adaptations to a multitude of aspects: among others related to marketing, information technology, human resources and logistics not in the least. These changes in logistics organisations and operations have been outlined by Bernon et al. (2016), Buldeo Rai et al. (2019); Hübner et al. (2016) and Ishfaq et al. (2016), among others. One major implication of an omnichannel strategy entails the role of the store (Hagberg et al., 2016), which is considered as part of a bigger and more connected, integrated and seamless shopping experience (Cao & Li, 2015). As such, the physical facility is not just a shop to sell products anymore, but a multifunctional space. Next to providing traditional sales functions, stores additionally serve as collection point for online purchases (so-called click-and-collect), as drop-off point for returns and as micro-fulfilment centre for faster, more cost-efficient and more sustainable product deliveries (so-called ship-from-store) (Buldeo Rai, 2019). In this way, stores become logistics proximity hubs.

For example, retailer Walmart offers collection services in 3,100 of its 4,753 stores in the United States, yielding average basket sizes that are about twice as large as their standard grocery baskets. More than 1,100 of its stores offer home delivery as well, in which orders are fulfilled in-store to speed up delivery and keep costs down. Walmart is rolling out a subscription programme for grocery home deliveries for a fixed monthly or yearly fee (Hamstra, 2019).

In London, sports retailer Sports Direct introduced a click-and-collect service that attempts to generate in-store sales as well: consumers are charged £4.99 for in-store collection of online orders but in return are provided with a £5 voucher that can only be spent in-store. In this way, consumers using the voucher feel like getting free click-and-collect services while Sports Direct increases its in-store sales (Dablanc et al., 2018).

In France, sports retailer Decathlon facilitates online product reservation and in-store collection of online orders. Several tools have been introduced as well to technologically support their omnichannel strategy: product labels with an electronic identification chip (called “RFID”) to track products, optimise stock management and speed up payment in-store; and the “mobistore” application for in-store staff to access complete product information, such as technical characteristics, description sheets, stock availability and prices (Decathlon, 2014).