E-commerce and multichannel
During the coronavirus emergency, e-commerce saw a significant increase in sales, 81% more than 2019, according to data released by Nielsen. Consumer habits have changed, with more attention being placed on e-commerce, demand, online shopping and home delivery. New segments of customers were inevitably forced to switch to e-commerce. Most of the users will gradually return to their old habits, but a good part will still continue to shop online, given the convenience and immediacy offered by the service. For these users, most likely, the behaviour adopted during this period will become the norm. Just think of the case of China and the SARS epidemic of 2003. At the time, e-commerce was relatively primitive and not many people had access to the internet, but the market was able to respond promptly to the strong demand. In this period, the foundations were laid that led China to be the country with the highest number of online sales, about 30% of the total market. We can therefore assume that online sales in Italy will decrease compared to the emergency period, but it is highly unlikely that they will get back to pre-Covid levels, as there has been a strengthening of e-commerce business both by traders and consumers. Although the crisis has significantly accelerated digital transformation, it has unfortunately also highlighted some flaws in the entire system. In fact, there have been problems associated with the boom in demand, especially in the food sector, the most requested during this emergency situation. Most companies were not fully prepared, as the organisation and sales models were only effective for the previous scenario. From this emergency, companies (e-commerce and retail) were able to learn and then implement improvements, building on the strengths and correcting any weaknesses that emerged during this period. For example, more attention will be paid to improving order placements and to reducing logistic costs. Or, new collaborations and partnerships will be evaluated, relying on other companies without having to manage their own logistics infrastructure. The winner, as far as e-commerce is concerned, is the omnichannel strategy: to provide users with an integrated and user-friendly online experience through a diversification of channels and devices, from online to physical stores, to direct marketing through emails, text messages and social media. A strength for the future of e-commerce will be the ability to communicate the same message with honesty and transparency in a different way, by means of different channels and related languages.
According to Valentina Pontiggia, Director of the B2C E-Commerce Observatory at the Politecnico Institute of Milan, e-commerce is fundamental for contact with the consumer who is looking for information online and also for customer service in general. Some companies have continued digital communication to ensure customer loyalty, even without selling. “We expect that e-commerce can continue to develop even after this crisis and be perceived by companies as a channel to be managed in an integrated way with the physical store. The brands that truly know how to carry out an omnichannel activity will be the winners.”
The digital revolution and the increase in the use of digital devices have also changed the concept of buying. We have moved from selling products/services in a linear and unidirectional way to a multi-channel strategy, in which both offline and online actions interface with the each other. As more and more consumers turn to online channels for their purchases, companies must align themselves with this new business concept by adding a special e-commerce section to their website. But what are the advantages of electronic commerce perceived by consumers? Definitely the demolition of space-time barriers. E-commerce gives consumers the opportunity to buy an infinite array of products or services from anywhere in the world, at any time of the day or night without worrying about time zones. The ability to receive information and feedback is also fundamental: before buying a product or service, the user can consult reviews by previous buyers or request basic information directly from the company, also by means of interactive chatbot systems. Last but not least is cost competitiveness. The world of e-commerce gives consumers the opportunity to have a general overview of the products and services offered, the prices and competing companies at stake.
Italy: important data
Blogmeter – a leading Italian provider of Integrated Social Intelligence services and ASSIRM-certified research institute – has set up an ecommerce observatory that in the coming months will analyse the consumption habits of Italians. The aim of the Observatory is to support brands in this crucial time in order to give them insight and useful tools to develop an efficient and up-to-date omnichannel strategy and, above all, to analyse the new consumption habits of Italians. Starting from two different survey periods (February and June 2020) and from a representative sample (by gender, age and geographical area) of about 2,200 respondents, residing in Italy and registered on at least one social media platform, the key role of e-commerce in the “new normal” emerged. According to Google Trend research, many typical lockdown phenomena, such as the frantic purchase of yeast and flour or queues at the supermarket, have become quite normal in recent months, while ecommerce and major online retailers resist without showing signs of failure. During the lockdown period, 80% of Italians said they bought more online products than usual. The segment of consumers who saw a strong increase in online purchases was that of women under the age of 44 and those with children under the age of 10. The growth of online shopping was also supported by a modern, albeit widespread, fear of frequenting physical stores (62% of respondents) and the “unwillingness” to leave the house (61% of respondents). A comparison of the categories of products purchased online from February to June 2020 showed that the first two steps of the podium are stable: clothing and electronics-IT. Third place went to books and magazines: sectors that do not lose ground, despite not recording a significant boost. The rest of the ranking, however, changed greatly. The home became the centre of attention (and purchases) of Italian consumers: food, groceries and furniture consolidated their online presence. An important number to look at in the coming months relates to the purchasing power of Italians: 71% of Italians believe that their income will decrease during 2020, while in the first quarter of the year ISTAT reports a decrease of 1.7% in purchasing power.
Irene Ferrario, Head of Marketing of Blogmeter comments that “the market in the 'new normal' is more and more competitive: with the reduction in spending power (according to ISTAT, final consumption expenditure fell by 6.4% in Q1 2020) Italians will be more careful when purchasing and, in order to emerge, brands will have to offer customers a holistic and a much more personalised experience. The integrated omnichannel approach therefore becomes essential for managing all the points of interaction and contact with the customer – sales and communication, physical and digital.” A well-designed e-commerce architecture allows connecting the physical shopping experience and the best performing stores with online channels: on the web, on mobile devices or on any other digital channel useful for growing your business and sector. Logistics will have to be reorganised and updated in favour of a proximity model, shipping and delivery methods will have to be speeded up and made more efficient, perhaps using click&collect or the 'proximity commerce' model where possible, and payment systems will have to be more mobile-oriented, not only because more than 60% of e-commerce traffic is mobile but also because more and more users are making purchases directly from their smartphone.
Augmented reality vs Virtual Reality
Italians still tend to prefer offline purchases. In addition to the distrust of brands and the fear of entering bank details on the internet, what mainly holds users back is not being able to see the product live before the purchase. This is where VR and AR come into play: these technologies make it possible to show the products in real life, wherever the customers are located (see the example of Gucci that allows you to virtually try on the shoes in the collection thanks to Augmented Reality). As pointed out by Cristina Scocchia, CEO of KIKO, in this last period consumers have purchased the products they already knew because they wanted to play it safe, given the impossibility to test cosmetic products. Consumers want to receive detailed information on the product before purchasing, and virtual reality makes this possible. In addition to a good product description, quality images and positive reviews, these technologies can greatly help customers make better buying decisions. Giving as much information as possible is the key to increasing sales and reducing returns.
But what are the differences between the two technologies? To put is as simply as possible: virtual reality can take you anywhere, augmented reality can bring anything to you.
Virtual Reality uses glasses, headphones and joysticks and every interaction takes place in this digital world. Augmented Reality "limits” itself to enriching reality by bringing digital elements into the real world. AR does not require special tools; all you need is a mobile device with a camera. For this last reason, AR is more accessible than VR; not everyone has specific viewers or tools, but everyone has a smartphone. In 2019, as many as 43.06 million Italians used a smartphone daily, potentially a huge audience to reach, taking care to optimise the pages of their e-commerce website for a pleasant shopping experience on a mobile device.
The Italian start-up Snapfeet is able to meet these new needs created by the pandemic. Founded in 2016, it is now more relevant than ever. This free app allows shoe buyers to “try on” any shoes in augmented reality and to discover in a few minutes the correct size, by making a 3D scan of the foot. Snapfeet is the result of a technological project based on a scanning and fitting algorithm that allows users to try out different sizes. Just frame the foot and with three photos the software will recommend the most comfortable size and highlight any critical issues. "The advantages are manifold, from consumer satisfaction and greater confidence to increased online sales, as well as environmental sustainability thanks to the drastic reduction in returns,” explained the engineer and entrepreneur Natale Consonni, one of the founders.
In conclusion, it can be noted how the pandemic and lockdown have radically changed the habits of Italians, who claim not only to have made more online purchases than usual but also to have done so with satisfaction. The health crisis therefore continues to bring about a renewal in consumer habits, guiding them towards a new dimension of consumption both in terms of products and brands chosen, and in terms of method, from physical stores to e-stores. To survive, Italian companies must seize these opportunities of digitalisation, offering new services, channels and sales methods, as well as an effective storytelling technique, one of the main factors for success in the immediate future.