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Sunday, June 10, 2018

The first mistake that many companies make is to trust online sales to marketing

There is no need to make differences. The brands must be clear that the stores at street level have to walk hand in hand with their sisters in the network and satisfy the customer in the same way. Says Ronan Bardet, CEO of EGI Group and one of the largest experts in Spain in digital business. He also talks about the great opportunities for growth offered by the Internet to retail companies.

When a neophyte asks in the sector of electronic commerce specialized in retail by an expert in the field, a name jumps. His, that of Ronan Bardet, a Frenchman from Brittany who studied in Deusto and the University of Nottingham and settled in Spain 15 years ago to delve into the digital business sector. Founder and CEO of EGI Group, a service company specialized in online commerce, and co-founder of Club Ecommerce. He is also an investor in MAM Originals and a mentor in the Conector startup accelerator. His extensive experience supports him to sentence that the strategy of retailers no longer have to differentiate between traditional commerce and e-commerce. We have to talk about "connected commerce" because "that is the ideal present and the future".

-The online sales of companies do not stop growing, but in Spain they still represent a very small percentage of the total. Why?

- To understand the current situation it is necessary to understand that in Spain retail trade was incorporated with a considerable delay to digitalization. The reason is that for a few years the topic was widespread that no one was going to buy on the Internet because they were afraid of e-commerce and put their card data on the Internet.

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-When did that perception change and things started to change?

-It was not until 2006 or 2007, when what is known as push sales are born, which push consumers to buy. It is then when the entrepreneurs begin to take the first steps in this field. The first push portals that arrived here were Privalia and Buyvip, which were copies of the Venté Privé model that was very successful in France. In the case of fashion, for example, the private sale portals have brought a lot of buyers on the Internet. A couple of years later came the daily deals, which are the portals of discount coupons such as Lets Bonus or Groupon. It was a second push sales model that was a sales success because it attracted a lot of new buyers who ended up becoming online consumers. These discount portals were not durable, but they transformed the way of consuming. They have helped to democratize online consumption. The big fashion brands observed that this phenomenon worked and that's when they made the leap. Notice that the Inditex group did it late, in 2010. But it has done quite well.

-Inditex has made a good adaptation, as it says, but what will happen to other retailers that are not giants like this group?

-The problem of the little ones is that they come from a very traditional world and do not have the human resources or technologies to be able to face the digital transformation of the sector. They also do not have enough digital culture to do it. The first mistake they usually make is to trust online sales to the marketing manager, who has no idea what an e-commerce is. The second problem is that instead of making an omnichannel transformation, many have segmented business, online and physical, instead of seeking a synergy between them. From there, there are companies that have hired people, teams ... They have made an internal transformation, not only online. They have done it in all aspects that are related to the brand. Hence, they have also digitized the points of sale. The store must also modernize. This brings us to a new concept that is connected commerce.

- What does that term imply?

- Always be connected to identify the client and treat it in a homogeneous way, regardless of the channel with which contact has been established.

- What is the trend then?

- The hypothetical present and the future is desired the connected commerce, the capacity of a retailer to diversify and homogenize the customer who arrives at the brand by the mobile, but can also go to the store on the street. There are no channel borders. In addition, the future is to know everyone who connects with me, that there is an interaction with the brand whatever the channel used to reach it. Obviously digital sales worldwide are still only 10% of the total. In Spain they are 6%, but in any case we do not know where the roof is. Anyway. we should not talk about e-commerce anymore. That is past, we have to talk about connected commerce because the strategy is global.

- Not to make this change is not to survive?

- It is necessary to differentiate between the companies of retail that control the manufacture of which they are distributors. It is not the same to be a multi-brand store as a group like Inditex or Mango. The latter have a good margin and can invest part of their profits in digitization, while those that are distributors of products have other very small margins. For the latter, the change poses a great threat. For those who produce is a great opportunity.

-What opportunities can you take advantage of?

-Small brands can use resources such as, for example, the Amazon, Zalando or La Redoutte markets places, where they distribute products from other companies. I also see great opportunity for the DNVB, the new brands that are born on the Internet. These are companies that will not think of a physical store, but open it on the Internet. They are very reactive, flexible ... They have a lot of margin and they have a lot of growth capacity. The DNVB par excellence is the brand of glasses Hawkers, which happened to have a turnover of 100 million euros in three years and then open some offline stores. Another example is Bonono, the American clothing brand.

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