Brave new shopping world

In 2020, the year of the coronavirus pandemic, one in two online stores in Switzerland saw an increase in orders of more than 20 percent. This is according to the latest survey of online retailers conducted by the Institute for Marketing Management at the ZHAW School of Management and Law. «Swiss consumers shopped online more frequently due to temporary store closures or to avoid visiting brick-and-mortar stores,» says study author Darius Zumstein. In addition, many working people changed their leisure activities due to mandatory work-from-home policies. This has significantly increased digital demand for goods such as do-it-yourself and gardening supplies, groceries, and sports and toys. As daily office work shifted to people’s homes, online orders for computer, electronics, and multimedia products also rose.

«Marketing tools such as print ads, outdoor advertising, radio, and TV are losing ground.»

Zumstein expects the trend toward online shopping to continue even after the pandemic: «82 percent of the 322 Swiss online stores surveyed expect sustained growth. Even if all stores are open again and some consumers start shopping in-store more often, many have grown accustomed to the fast, hassle-free experience of online shopping and won’t return to the »old normal.«» It’s not just young digital natives who are ordering everyday goods online; older generations have also come to know and appreciate the convenience of home delivery in recent months. According to Zumstein, while e-commerce growth in 2021 won’t reach 30 percent again as it did in 2020, the dynamic trend will continue. What does this mean for marketing? Zumstein explains: “First, marketing is also going digital. Search engines and social media marketing are gaining massive importance. Traditional marketing tools such as print ads, outdoor advertising, radio, and TV continue to lose ground. Second: Marketing and the point of sale (POS) are becoming increasingly intertwined; their technologies, processes, and organizational structures can hardly be separated anymore. And third: Marketing is becoming more data-driven and personalized. Customers are increasingly receiving information and offers that are precisely tailored to them and therefore relevant to them.”

Hybrid Shopping

In addition to online shopping, hybrid shopping models such as click-and-collect also experienced a surge in popularity during the pandemic. Depending on the retailer’s size and digital capabilities, orders are placed by phone, email, fax, or through the online store. At certain companies, orders can also be placed via WhatsApp or social media platforms like Facebook and Instagram. The retailer then contacts the customer to let them know when, where, and under what conditions the merchandise can be picked up. This shopping model has the advantage of ensuring that personal contact between the retailer and the customer doesn’t completely break down during times of crisis. «It’s just a drop in the bucket. But we’re grateful for every item sold. Since the lockdown, I’ve been at the store every day from 10 a.m. to 3 p.m. to show—I’m here!» explains the owner of a shoe store in Mainz to the German broadcaster SWR1.

«The trend away from mass marketing toward communication that is as personalized as possible will take hold.»

The trend toward hybrid shopping formats is unlikely to disappear entirely after the pandemic. This is influencing the design of retail stores and marketing at the point of sale. «When customers make their purchasing decisions before even visiting the store and their time spent in-store is reduced, targeted marketing at the POS becomes all the more important,» says Lucien Denier, a marketing expert at full-service provider Schelling. It will be essential to capture customers« attention within an even tighter time frame and create incentives for subsequent interactions across online and offline channels. »In our view, display communication surfaces are becoming increasingly important; there is a shift from product-bearing displays to displays that accompany products.”” The trend away from mass marketing toward communication that is as personalized as possible will prevail. This is evident in individually printed surfaces produced digitally, animated elements, or sensor-controlled lighting effects on displays.

From POS to POE

According to Lukas Lauwiner, head of marketing at Richnerstutz—a company specializing in three-dimensional communication—interaction between customers and providers had already undergone a fundamental shift even before the pandemic: «The possibilities offered by digitalization are creating entirely new expectations for the customer journey.» However, the new way of using storefront windows can definitely be attributed to the COVID-19 crisis: «Experiences while waiting in line have become enormously important. During lockdowns, the storefront window was the only analog means of communicating with passersby. Unsurprisingly, our concepts have evolved so that the storefront is now used more for interaction or serves as a bridge to e-commerce,» explains Lauwiner. In 2020, Richnerstutz experienced a real boost in digitalization. Additional software skills and in-house developments have further strengthened the bridge between the physical and digital worlds.

«The importance of product recommendations and combination options will continue to grow.»

Dana Leitner-Schall, head of marketing at Westiform, a specialist in visual communication, emphasizes that even before the COVID-19 crisis, the point of sale (POS) had increasingly been transforming into a showroom and experiential space—a «point of experience.» With the expansion of e-commerce, this trend is likely to intensify, and visitor numbers will be redistributed. «Marketing must therefore focus on a balanced mix of digital and analog elements that convey the brand experience and provide customers with individual benefits or support personalized offers,» says Leitner-Schall. The importance of product recommendations and customization options tailored to individual preferences will continue to grow. This phenomenon, familiar from online shopping, is now expected by customers in traditional shopping experiences as well. For brands, it is becoming increasingly important to communicate authentically and in line with their brand identity, as well as to promote brand values such as sustainability and a sense of community. “The store is no longer purely a transactional space, but rather a meeting place where consumers want to be entertained, informed, and inspired—ideally with offers tailored to them or customized for them,” explains Leitner-Schall.

Marketing must constantly redefine and reinvent itself.

The 2020 Online Retailer Survey This was the third time the survey was conducted, following those in 2018 and 2019, and 330 Swiss online stores participated, representing the business-to-consumer, business-to-business, and direct-to-consumer sectors, as well as manufacturer-operated stores. One-third of these online retailers operate in both the B2C and B2B sectors.

SHORT INTERVIEW

«Omnichannel sales remain a major issue»

Darius Zumstein is Lecturer at the Institute for Marketing Management the ZHAW School of ManaManagement and Law. m&k talks with him about the potential of e-commerce and the opportunities hybrid shopping.

m&k: Darius Zumstein, which sectors will continue to benefit from online retail in the future?

Darius Zumstein: Virtually all industries and product categories are benefiting from the current e-commerce boom. In 2020, due to stay-at-home measures, online sales grew the most in the categories of home goods, computers and accessories, sporting goods, and groceries. Sales of toys and furniture also shifted from offline to online.

Where do you see the biggest Potential?

I see the greatest e-commerce potential in the following four areas: First, in business-to-business—there’s a lot of ground to make up there. Even machines, tools, and other complex products that require extensive consultation—as well as replacement parts—will now be sold online. The crisis is forcing B2B companies to digitize; otherwise, they’ll be out of the game even with COVID-19 subsidies. Second, SMEs are overcoming their reluctance to embrace digital technology and can successfully sell online even with limited resources. Third, manufacturers are increasingly selling directly to their end customers online, thereby eliminating middlemen. Why leave margins on the table unnecessarily? And fourth, those industries that are still lagging behind in e-commerce—such as food, furniture, cars, and sporting goods—are catching up.

Will hybrid also be Shopping at the nearest In recent years, a major Play a role?

Yes, omnichannel sales are and will continue to be a major topic. More than half of Swiss online stores also sell through brick-and-mortar stores as well as other digital sales channels such as marketplaces, social media, or WhatsApp. The challenge here is coordinating all channels and integrating the systems and data from the various «customer touchpoints.».