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1.1 Retail 1.0
Retail 1.0. saw its birth in the last century, characterized by the great novelty offered to
consumers to be able to touch the products they want buy: they are the ones who finally
choose the product, thanks to the introduction of open shelves that allow for
people to move freely within the store.
It is at the beginning of the 20th century that specialized stores and multi-product
drugstores are joined by new concepts that adopt self-service systems in which customers,
before leaving the store, show the goods to a salesman who, checking prices, calculates the
total and makes the transaction at the cash desk
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.
Clarence Saunders, a former GDO salesman is the one who first had an intuition destined
to change the history of the stores: in 1916, in Memphis (Tennessee), he proposed to the
distributor Piggy Wiggly to create the first outlet with exposed shelves, arranged in order
to create an ideal itinerary inside the store
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.
The store that exhibited and made available of the customer the products, was
characterized by simple graphics, as billboards and window stickers to advertise the
goods in sales, keeping cashiers and employees serving the customer
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.
What changes from the traditional method is to make sure that customers are directly using
the products in complete autonomy, each of which has a price tag.
Picture 1: Piggly-Wiggly store 1920.
Source: https://www.are.na/block/2714954
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Source: https://www.economyup.it/innovazione/retail-come-siamo-arrivati-all-omnicanalita-e-che-cosa-c-e-nel-fututo/
17
Source: https://iquii.com/2018/04/18/retail-omnicanalita-sfide-opportunita/
18
Source: L’era dell’omnicanalità nel Retail e la sua continua evoluzione, cosa ne pensano i Millennials?. Francesca Perrone | Laurenda
in Politiche per la Sicurezza – Università Cattolica del Sacro Cuore Milano
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1.2 Retail 2.0
About 50 years later the first hypermarkets opened: more precisely in 1962 Walmart in
Arkansas and the following year Carrefour in Paris. The two brands inaugurate the new
concept pursuing a philosophy based on: "everything under one roof", that is, selling
anything distributed on a single, large plan. Retail 2.0 represented the avant-garde with
respect to the use of space and the management of processes because it was based on
concepts of maximum productivity and cost rationalization. The model was very successful
in Europe, especially in France and Spain, but also in the rest of the world.
In the US it was Walmart that between 1990 and 2000 changed the concept, evolving it
into that of Super Center
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In recent years, the classic supermarket has evolved towards a new sales concept with the
opening of the first hypermarkets. These new hypermarkets are characterized both by the
large size of the store (over 2500 m
2
) and by the large parking lots around it. In addition,
the offer was diversified internally, which no longer included only foodstuffs, but also
offered various types of products ranging from household products, body care, tools,
stationery products. As we know with the progress of the times also the needs of the
consumers evolve, consequently the services try more and more to satisfy these needs. The
shops in fact begin to create a different atmosphere inside, including music, smells and
different patterns to make the product immediately stand out from the customer's eye.
Personalized products also begin to be born, like the case of Nike, which introduced "Nike
ID" around the 90s to allow the personalization of their products. Furthermore, technology
also plays an important role in this evolution, such as the introduction of RFID. The RFID
technology was also implemented for tracking products through a code where it also
contained various information about the product itself. In addition, IBM in 1972 invented
the touch screen, which will be implemented in stores around the year 2000 together
with the birth of the first interactive totems in the stores available to customers
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.
Picture 2: Carrefour store 1963, Paris.
Source: http://www.retailbuzz.fr/le-1er-hyper-ouvre-ses-portes-il-y-a-50-ans-de-cela.html
19
Source: https://www.economyup.it/innovazione/retail-come-siamo-arrivati-all-omnicanalita-e-che-cosa-c-e-nel-fututo/
20
Source: http://www.retail-intelligence.it/2017/10/03/levoluzione-del-retail/
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1.3 Retail 3.0: The E-commerce
In the second half of the 90s the world of retail changes again thanks to the spread of the
internet which introduces a new way of selling e-commerce. According to Wikipedia for
E-commerce it defines "The activity of buying or selling of online products or over the
Internet. Electronic commerce draws on technologies such as mobile commerce, electronic
funds transfer, supply chain management, Internet marketing, online transaction
processing, electronic data interchange (EDI), inventory management systems, and
automated data collection systems ".
In reality the first commercial exchanges took place even before the internet era, through a
business to business process where the companies that adhered to the Electronic Data
Exchange circuit exchanged commercial documents in a completely automated manner.
The beginning of this great revolution came in 1995, when Jeff Bezos founded
Amazon.com the first online store that sold books initially and with the advance of the
years he diversified his offer with the sale of CDs, DVDs and many other products
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Also in Italy the same wave is followed, in fact in 1996 Olivetti is announced the opening
of the first Italian online market for the sale of books, gifts, computers, multimedia
products to other things.In 1999 Alibaba was founded, which immediately underwent
enormous growth thanks to its starting market, the Chinese one.
Ebay.com was founded in 1995 as the first online auction site and at the same time
the first consumer to consumer site. In those years we are witnessing the era of dot-
coms, with the birth of many internet sites especially concerning online commerce.
Although the internet bubble exploded in the 2000s, many e-commerce sites remained
alive and grew considerably in the following years. The real revolution was precisely that
of being able to buy products of all kinds from the comfort of home and always delivered
at home. In addition there was also the possibility of finding objects that could not
generally be found in your own city, so you could buy items anywhere in the world, thus
breaking down any barriers and buying borders with a service offered 24 hours a day.
Although at the beginning many consumers were wary of these online purchases due
to the online entry of personal data including the credit card, later this distrust has
always diminished thanks to the introduction of security systems for encrypted and
protected payments such as Secure Electronic Transaction and Secure Socket Layer.
Moreover these are not only advantages for the consumer, but also for the
entrepreneur. For example, having items sold 24 hours a day allows consumers to
buy their products even on holidays or public holidays when, for example,
competitors with physical stores are not open. Overcoming geographical limits allows
the company to significantly increase the number of potential customers. Many e-
commerce sites also use the dropshipping technique, through which the warehouse
21
Source: https://www.axelero.it/storia-dell-e-commerce/
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costs are totally reduced. In this way the entrepreneur does not directly own the
products, but puts in "showcase" the products of his suppliers so when the consumer
makes the purchase, the entrepreneur makes the order directly to his supplier and
makes the shipment directly to his customer. The problem with this technique is that
a strong relationship must be established between the e-commerce entrepreneur and
his supplier, because you must always be up to date on the availability of products in
real time to avoid selling a product when it is actually no longer available and
consequently keep the site constantly updated on availability minute by minute.
Another advantage for the company is the ability to collect data on their customers and
potential ones more easily, these data are called Big Data, which are often already
collected during the customer's browsing on their site both during the product search phase
that even post-purchase feedback, these data are often also collected by third-party
companies for marketing purposes and then resold to businesses even if these techniques
are subject to strong criticism regarding the user's privacy violation. Big Data is a rich
amount of information or unstructured data that is constantly collected, organized and used
by companies to grow their business. They help to interpret consumers' commercial habits,
so the entrepreneurs are able to follow the market trends and offer products and services
that are increasingly closer to the needs and tastes of customers and in many cases to
customers, during the navigation they display advertisements (pop-up or banner) inherent
to one's research and previous purchases in order to offer an increasingly personalized
offer. The continuous advancement of technology has had a great impact in the
growth of e-commerce. With the implementation of ADSL, access to the internet was
more enjoyable by increasing the number of "surfers" while at the same time the
number of online sites grew more and more. This has also revolutionized the
feedback system with regard to online purchases, in fact we have gone from simple
word of mouth between friends and acquaintances to real communities on the
Internet where they exchange information on purchases where we recommend what
they are. more reliable sites where to buy, cheaper ones, those that insert offers more
often and so on. With the expansion of social networks this phenomenon has grown
more and more also due to the fact that people often publish the products purchased
on their own profile, increasing the positive feedback and the visibility of the
companies. In these social networks, companies often collect information regarding
their products and their site through comments or chat messages also used for direct
customer support. With the birth of more modern smartphones and tablets and with
the offers of the various telephone operators that allow the use of the internet even
outside of one's own home, it was allowed to increase the shopping experience on the
part of consumers. In fact it is now possible to surf the internet wherever we are and
make our purchases at any time both on the online sites and on the app directly
customized for the various devices to allow users a better and more suitable shopping
experience based on the device that they use.
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1.4 Retail 4.0: Online And Offline Integration
At first it was thought that the online and offline stores were two separate worlds, where
the retailer had to take care of selling either on one or the other, hence the concept of
"Single Channel". As technology advances and with it the tastes and needs of consumers, it
has gone increasingly towards the idea that online and offline should no longer be two
separate worlds, but must fully integrate to become a single strategy for the retailer hence
the concept of omni-channel. With this idea of integration there is also the digitalization
process of the physical store, today we talk about Retail 4.0 to indicate the use of digital
technologies and tools - both in stores and in support of the distribution chain that are
renewing the concept same as store. But now let's see specifically what is meant by
single channel, Omni-channel and how it got from one to the other
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.
Single channel:
With this marketing strategy, retailers operate according to a single channel
logic, the most classic and traditionally used, of the physical store alone or,
more current, with the only online channel ie the e-shop. Using just one
channel, the company will reduce marketing expenses but limited
opportunities for interaction with the relevant public. The main consequence
is therefore the reduction of the sales potential.
Multi-channel:
Retailers operate through two channels, physical and digital, leaving the possibility
for consumers to choose which of the two to purchase; the choice may fall between
the classic physical stores or between e-commerce, mobile app etc. This type of
approach certainly has a greater degree of coverage and service offered to the
customer, on the other hand integration between the channels is rather poor.
In this way the chances of a potential customer getting to know the company
and interacting with it will increase, so as to increase the "sales" item as well.
It is in fact statistically ascertained that "multi-channel" consumers spend 3-4
times more than the customers of a single-channel company. But in this way
the difficulties in identifying the channel that worked properly are greater,
thus helping to generate traffic or conversions.
Cross-channel:
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Source: https://www.ve.com/it/blog/strategia-digitale-single-multi-cross-omni-channel
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This marketing opportunity allows the customer to be involved through more
than one multi-channel, but within the same purchasing process. In this case,
the channels do not work separately, but work together to offer greater
potential. The ideal example is that of the customer who orders the products
online and withdraws them directly at the point of sale. In this case, online and
offline collaborate directly to direct the purchase. A cross-channel strategy
encourages conversion, because it provides the customer with his preferred
choice in choosing the channel best suited to his needs.
Omni-channel:
Omnichannel marketing represents the stage just above the cross channel with the
same purpose of offering, through physical and digital spaces between which the
consumer can space, complete and dynamic shopping experiences. With this
strategy there is not only the integration between channels but also everything
related to communication, a technique that allows you to maximize touch points
with customers and loyalty to the brand.
In this way, a streamlined and fluid experience is provided to the customer,
removing any barriers related to the purchase and conversion, allowing the
customer to know in depth, in order to better involve him and keep him faithful to
the brand and improve management of the warehouse, minimizing excess
inventory, double sales and any forecasting errors. But at the same time, in order to
monitor the strategy in a widespread manner and to better analyze data, traditional
marketing and digital channels must work together, but often merge, multiplying
costs and causing waste.
Picture 3: From Single channel to Omni-channel model.
Source: https://42functions.nl/blog/verschil-single-multi-en-omnichannel/
The end consumer is the true proponent of the change in the e-commerce world and,
through his buying behavior, is able to condition the entire sector and the way companies
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