As Europe stares down the bleak road of further lockdowns, e-commerce is likely to continue its boost, but the Germany-headquartered beauty retailer Douglas demonstrates how difficult times can become opportunities to grow.
Since the first lockdowns began to close down the continent in March, the balance of the company’s business shifted heavily away from physical stores and toward its online shop, with e-commerce sales up by 70% year-over-year.
That growth, despite lockdowns across Europe, has allowed it to move forward, advancing on key markets both online and offline. (For more, read WARC’s in-depth report: Why marketplaces are e-commerce’s next frontier: insights from Douglas)
While a strong online effort is the result of the last two years’ hard work, moving quickly under difficult conditions was a key reason for the company’s market share gains year-over-year.
This was largely a result of new e-commerce customers, whose numbers had increased by more than 90% year-on-year. Part of this hard work came from customer relationship management and the brand’s large loyalty programme, but there were also smart, sympathetic ideas at play.
One example was the creation of a phone-order service for older customers in less digitally mature markets like Italy and Spain, where potential customers were more willing to trust a phone service than a website. According to Alvarez & Marsal analysis, quoted by the company, these two markets saw the highest proportion of customers buying online for the first time during lockdown, at 55%.
In other markets, Douglas took a short-term profit hit by lowering the minimum order value that qualified for free shipping in order to bring in more customers. While high fulfilment costs were a cause of a slightly diminished financial performance, it is worth pointing out that the growth in operational capability (and doing so in a way that the company claims to keep its employees safe) is no mean investment.
An advanced e-commerce presence now allows the company to develop its platform vision, a logical extension of a physical retailer’s traditional offer: as that of a medium through which brands reach customers and customers find brands, leveraging its technology and scale as a core competence.
Sourced from WARC