The retail industry is more dynamic than ever and it is likely that retail will change more in the next five years than it has over the past century.
The way that consumers make purchasing decisions has dramatically altered: they stand in stores, using their smartphones to compare prices and product reviews; family and friends instantly weigh in on shopping decisions via social media; and when they’re ready to buy, an ever-growing list of online retailers deliver products directly to them, sometimes on the same day.
Many traditional retailers are confused by these new digital trends and many of them do not know how to keep pace with them. Traditional commerce is not dead since people like to buy. They need that experience because we are social and emotional beings, but the experience has changed and many retailers must adapt to these new trends to be successful and to survive.
Perhaps the fastest changing market is the consumer electronics industry. Technology changes rapidly and keeping pace with those changes is a challenge in itself, not to mention the importance of supplying content and accessories that match these technological shifts.
The worlds of traditional commerce and e-commerce are merging, and to be a successful retailer, you must combine them together, one depends on the other. It is a synergistic business model. This is what Mr. Bernard Šepetanc, CEO and owner of Elipso, the Croatian consumer electronics retailer and industry leader with 406 employees and 19 retail outlets and one online store emphasized in our interview.
DEER: You have successfully established e- commerce and also have large network of retail stores around Croatia, what is your key of success? What you have learned, is digital transforming retail?
Bernard Šepetanc: The latest trend is that the difference between offline and online is gone, one without the other cannot exist. They complement each other. When online sales started, there was a fear that the retail trade in its traditional form would disappear mostly because online products were cheaper, but that’s not the case today, especially since prices in offline and online shopping are now nearly equal. To our knowledge, 85% of customers buy offline and only 15-20% of them purchase online. Customers primarily go online for information about products and to compare products and prices, but most of them still buy more in retail stores. When we talk about online shopping, this number is perhaps even lower because customers are buying online, but they are instructed to pick up their purchases at retail shopping sites and complete the transaction there, so that is not real on- line shopping.
Again, as I said at the beginning, one without the other can not be. Today’s customers are technologically savvy and since we are living in the digital era, they expect that information will be delivered now. We must provide that service by offering an easy search and comparison system, video presentations and a review of products, easy delivery of orders and other services that will fulfill all of our clients’ online needs.
On the other hand, in offline we have professional and educated employees who present customers with all the benefits and features of the product in a pleasant atmosphere, providing a complete shopping experience.
DEER: What is the biggest challenge facing the electronics retailers in the future?
Bernard Šepetanc: The electronics industry is rapidly growing and changing, and if you do not understand that, and if you are unable to adjust to it or follow the market trends, you will lose your business. This applies in particular to electronic devices that are wired or are wirelessly connected to the Internet. These so-called consumer electronics products are the growth drivers in the electronics industry. We must adapt to trends and customers every day. All that is new on the market is popular and this so called “novelty segment” is growing segment such as drones, for instances. Our employees are constantly being educated about brands, products, and new trends in the market. Customers are our focus and we strive to provide them with all of the necessary information before they make a decision to buy. Our online and offline communication channels must be in in line, or in synergy, so that our customers are properly informed and satisfied.
DEER: Are we keeping up with those trends in this region, specifically in Croatia? What has your experience shown?
Bernard Šepetanc: We have certainly been following those trends successfully and in no way are we lagging behind. I can safely say that we have even skipped some stages and in some areas are even more advanced.
DEER: What do you think is the future of digital and traditional commerce?
Bernard Šepetanc: A few years ago, it was thought that traditional offline retail would disappear, but web retail cannot work without traditional off line commerce and vice versa. They complement each other. Retail must be modern and digitized and, at the same time, offer a pleasant and reliable atmosphere for shopping. Digital and traditional retail must work in synergy, as a hybrid, their boundaries are limitless.
DEER: Returning to the Elipso, how satisfied are you with the past year, and what are your future plans?
Bernard Šepetanc: In each country or the regions within the country itself there are cycles when there is increased demand and consumption. It is certainly noticeable that this increase is during the tourism season, especially on the coast or before major holidays but Elipso has had stable income throughout the year. We also have expansion and development plans and we believe that we will soon achieve them based on our strategy and goals.