The pandemic changed how people shop as online shopping became the only viable option. For a while, physical shopping was not an option. After living with COVID restrictions for over a year, people are heading out to shop, especially to relive the experience.
Hence, despite the growth of eCommerce, offline retail is still growing strongly all over the world. In fact, customers are swiftly moving between online and offline channels while shopping. A study by SmallBizGenius suggests that In-store shopping is still the preferred retail channel for 82% of Millennials, even the ones who also engage in online shopping. (7)
Another report by Ernst & Young states that online sales are continuing to grow around the world, but the fact remains that brick-and-mortar stores are still the venue where the vast majority of shopping takes place. And this is likely to remain the case for years to come. (8)
But, if you are considering establishing an offline presence in a new market, it can seem like a total leap of faith. Let us take a look at some challenges that your business may face while taking this jump.
If not prepared, expanding into a new market can turn into a costly affair, especially when you directly take the offline route.
If you seek to work with a partner, the first challenges begin with finding a reliable one. You also need to consider factors such as reliability, transparency, and the cost of working with a partner.
On the other hand, If you decide to expand offline yourself, you are likely to face the below-mentioned challenges:
High set-up and running costs - cannot be avoided. Payments for electricity, water, maintenance staff, and rent need to be made every month. Combining these with the cost of marketing and promotions can inflate your expenses further.
Finding a retail space at a key location - because it can affect sales. The more popular a location the better it is for business. Isolated places restrict your expansion efforts.
Creating brand awareness - can be a challenging task while entering a new market. You need to make people aware of your products at the earliest.
Lack of customer data - can be an issue if you want to know more about your customers in a new market. Your staff will be occupied in taking care of customer needs instead of recording customer details like age, gender, preferences, and other information.
The Solution- eCommerce Marketplaces!
You may wonder, how does that fit into your need for an offline setup?
Don’t worry, you don’t have to give up your offline game plan! In fact, to help your offline strategy take off, you need to launch it through an online plan. And, the best way to do this is to start selling through online marketplaces before you enter that market.
Marketplaces provide you the opportunity to sell in a market without being physically present there and start building your brand name. To remind you just how helpful they are, here’s a short list of their benefits:
1. Reach a wide audience with ease
When you list your goods on a marketplace, you can sell just about anywhere and to anyone in the world. With marketplaces like Lazada, Qoo10, Amazon, and eBay you can easily reach eCommerce consumers all over the world.
2. No delivery hassles
Reaching a multitude of people at varying distances can be a pain. Especially, if you have to deliver to them from your warehouse headquarters. With the help of marketplaces, you can easily send your inventory to the marketplace warehouses at different locations and reduce delivery charges. Marketplaces also allow you to use your own channels to deliver products ordered through their platform. In case you have any reliable fulfillment partners in the new market, you can opt for this option too. (3)
3. Start selling from day one
Selling through marketplaces helps you start selling immediately. You do not have major set up procedures and the cost of selling on marketplaces is small. You are mostly charged commissions per order you receive. You can also manage attractive product prices due to the low cost of selling through marketplaces. (1)
4. Build brand awareness
This is a great way to establish your brand with customers before you go offline in a new region. Without knowledge of the brands you sell, people are not going to walk through your doors. In fact, how would people know if your brand is trustworthy? With millions of monthly visitors, marketplaces have gained the confidence of online shoppers. By selling on them, your brand name will be promoted even before you enter the market. Later, when you establish your offline presence, people will know your brand already.
5. Access to Customer Data
By collecting crucial data, you can collate it and use it to fuel your offline strategy. Several marketplace management systems offer crucial sales data & statistics about your online consumers’ likes and dislikes, popular purchases, and more. For a better customer experience, you can automate order and delivery communications, stock changes, and promotions. Once you gain maximum attention from the people you want to target, you can start studying them and then launch your offline retail strategy. (2)
The eCommerce ecosystem is transforming as we speak. In order to navigate the changes and challenges that the COVID-19 crisis has given rise to, it is crucial for actors to understand new markets and plan a strategy that supports their growth. One of the stable and secure, yet successful ways to do this is by first establishing a strong online presence and then setting up offline retail stores. With technology tools that assist such an expansion, now is the best time to explore new markets and engage in cross-border eCommerce.
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