The king is dead, long live the king!
Is multichannel passé?
This phrase comes to mind when viewing the German retail situation. The impact on sales in the e-commerce market is still often quite low for multichannel providers in comparison to internet pure plays. To top it off, in most product ranges the leading online retailer is an online pure play, operating even more profitably than its multichannel counterpart. Obviously, a double-channel presence does not automatically create value for the client. Furthermore, additional channels increase complexity, resulting in substantially costlier business systems. However, it would be erroneous to say that multichannel concepts have to be buried once and for all. Those who establish a model based on authentic customer requirements and who selectively integrate processes, organizational and data worlds can reach a higher system efficiency. They can thus generate true value as opposed to those holding onto a silo mentality.
The German retail market has stagnated for years. In several merchandise categories we observe a decreasing percentage in consumer spending, in some groups even after adjustments for inflation. For example, the textile market in Germany declined by 3.3% from 2016 to 2017; consumer spending for food and drinks sank from 14.4 to 13.9% between 2007 and 2015.
On the contrary, online retail continues to grow at double-digit rates, heedless of all those predicting the “end of the boom.” Contributing significantly to this dynamic growth are the internet pure plays, whereby the brick-and-mortar retailers show for the most part mixed success. Only few retailers can defend their offline market share in the online world; in most goods categories, the leading online retailers are pure plays that see physical stores — if they operate them at all — more as a marketing tool.