Dusseldorf Patricia Bernhard is in close contact with her customers in the store. But for the owner of the fashion boutique “In Love with Loretto 23” in Düsseldorf Unterbilk, the business is no longer conceivable without digital aids. With WhatsApp she keeps in touch with more than 250 regular customers. She presents new clothing in the range via Facebook and Instagram.
However, the most important thing for them is digital shopping. She orders half of her range via the wholesale platform Faire. “For example, I can order clothes from small, unknown brands from Los Angeles,” she enthuses. “My customers love it. These are things that no one else has.”
Gerrit Heinemann, trade expert at the Niederrhein University of Applied Sciences in Mönchengladbach, warns: “Retailers who do not use the advantages of digitization will have a hard time surviving the structural change. But many smaller retailers in particular still have a frightening digital allergy.”
This is confirmed by a study by the trade research institute IFH commissioned by the Faire platform and available exclusively to the Handelsblatt. Accordingly, 57 percent of the retailers surveyed do not operate an online shop. Four out of ten retailers have not yet dealt with digital solutions.
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And most see no reason to change anything about it. 60 percent of those surveyed stated that they saw no need for digitization. Even the lockdown during the pandemic has only changed this to a limited extent. Only 43 percent relied more on digital channels during the Corona period.
Faire: Digital access to 70,000 brands
E-commerce expert Heinemann explains: “Many retailers overlook the fact that digitization is much more than just an online shop.” This includes maintaining customer data, for example. It is also important that employees know how to use digital tools. But the greatest potential lies in purchasing.
“Many retailers have forgotten the old virtue: the heart of retail lies in the product range,” warns Heinemann. Customers are looking for unique products that are easy to obtain via digital platforms, even for small retailers. The platforms are a “survival aid” for retailers.
For example, the Faire platform, founded in the USA in 2017, offers retailers access to 70,000 brands worldwide. Luca Beltrami is responsible for the applications for retailers at Faire: “Small retailers have major disadvantages compared to chain stores. Their biggest problems are low margin, tight time and high risk when purchasing,” he says.
Faire therefore offers retailers a payment term of 60 days and low minimum order quantities to reduce the financial burden. In addition, retailers who order a brand for the first time can return the goods free of charge if they do not sell.
Around 500,000 retailers are already buying through Faire, and they processed sales of more than one billion euros via the platform last year. Faire has also been active in Europe since the beginning of 2021. The German market is the company’s fastest growing.
Google and Amazon provide information for retailers
However, Faire is not the only platform that is making retail shopping more digital. The French start-up Ankorstore, for example, has 20,000 European brands on offer. Here, too, there is a payment term of 60 days and a minimum order value of 100 euros. In this way, a dealer can resell the goods before he has paid for them himself.
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The Orderchamp platform offers a similar concept and comparable conditions, although it only offers 6,000 different brands. Like Faire and Ankorstore, Orderchamp uses the technology so that retailers can quickly find their way around the range.
Maximilian Gassner, Head of Orderchamp Germany, says: “According to the profile of the store, which results from the registration data and the order history and is continuously refined, we can make very specific recommendations to optimize the range.”
Trade expert Heinemann warns: “The stationary trade must be clear about one thing: E-commerce will be the winner in the long term.” A third of the shops will close in the coming years. In the textile trade, 53 percent of sales are already made online, many other product categories are moving there. This is precisely why it is important for stationary retailers to use all digital offers.
However, as the IFH study shows, many smaller retailers in particular feel overwhelmed by the digital possibilities. They cite a lack of time, a lack of qualified personnel and too much effort as the most common reasons for refusing digitization. Many also lack technical understanding.
The big platforms are trying to make it as easy as possible for them to enter e-commerce. Together with the German Retail Association (HDE), Google has developed a digital kit of tools and training courses that is intended to make it easier to start online trading. With Amazon, the HDE has set up the “Quickstart Online” platform, a free knowledge portal for everything to do with e-commerce.
Ebay sets up local marketplaces
A year ago, Ebay launched the “Ebay Dein Stadt” campaign with the HDE, especially for small dealers in inner cities. The local retailers introduce themselves to customers online on urban eBay marketplaces. “Discover online what your local retailer has to offer,” Ebay writes on the website.
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This was implemented particularly successfully in Nuremberg. There are now 1,500 dealers selling via “Nürnberg bei Ebay”, around 700 of these online shops have been newly set up. Customers can find around 800,000 products on this platform, and an item is sold every 23 seconds.
For many retailers, this is an opportunity to secure their existence with additional online sales. Elfi Vlassiadi, a porcelain dealer from Nuremberg, emphasizes that this is how she reaches customers who would never have found their way to her shop. In addition, the platform is particularly suitable for beginners, “because selling there is really very easy and can therefore also be fun”.
If you don’t want to set up an online shop, you can at least use social networks like Instagram or Facebook to reach new customers. On almost all networks it is now possible to sell directly from the postings.
Düsseldorf fashion retailer Patricia Bernhard says: “Of course it’s time-consuming to always post something new on the networks, but you have to do it.” For her, it’s less of a sales channel than a marketing tool. “That draws my customers into the store and increases my sales there.”
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