Adecco Group analyzes the growth of e-commerce in Spain

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

Electronic commerce in Spain does not stop growing. During the second quarter of 2018, the sector billed 9.3 million, 27.2% more than in the same period of the previous year, which represents a new record. With these figures is undoubted the growing importance of e-commerce in our country, which leads us to ask how it will evolve in the coming years. Will it continue to grow at this rate? What trends will mark the electronic commerce in the coming years? And, what challenges will the sector face?

To answer these and other questions, Eurovendex, the division of the Adecco Group specializing in the outsourcing of business processes, yesterday held the after work event, 'The challenges of e-commerce of the future'. An event that has had the leading experts in digital trends to address the challenges that the sector will face in the coming years.

Spain is the 4th EU country in e-commerce with 19 million users

The event, which took place in the COMO space, began with the welcome of Eduardo Gómez Mesto, national director of Eurovendex, who began his talk by talking about the growth experienced by the sector in recent years: "Today we are going to talk a lot about e-commerce, a channel that is in full growth. Depending on the report you take as a reference, growth can range between 15 and 40%. Without going any further, according to data from the CNMC, in the first quarter of last year, e-commerce made history in our country by breaking its own year-on-year growth record with 32.8%. A figure that makes Spain the fourth country in the European Union in the online sales ranking, second only to the United Kingdom, Germany and France. 71% of Internet users buy or have bought online in the last year and we already have 19 million users in Spain.

The sectors with the highest volume of sales are leisure and culture, tourism and technology, although there are still others in which e-commerce has a practically residual weight, such as the food sector, which does not exceed 2% of the sales."

The Adecco manager continued his speech adding: "The truth is that e-commerce has transformed the forms of consumption at breakneck speed, but has also modified the methods of purchase and, thereby, has generated a change in the market. We can see how it is transforming the logistics and transport sectors. How it has transformed the travel and hotel sector. And how the online shopping experience is transforming both the offline channel and the online channel. It is changing the philosophy at the point of sale and putting more value on the shopping experience at the point of sale. Motivated by this transformation right now practically in all the companies, we are talking about omnichannel and how we can make the shopping experience of our customers the best possible, regardless of the final purchase channel, but they can take advantage of each one of them. the advantages of each of the channels."

The economy in which a video is worth more than a thousand images

After Eduardo Gómez, it was the turn of JJ Delgado, Global Chief Digital Officer of Estrella Galicia & Board of The Hop and former Head Amazon Europe. In addition, it is the person behind the day that Amazon beat record sales on Black Friday. Under the title Think digital, he spoke about the new digital ecosystems and their impact on the current economy:

"They say that a picture is worth a thousand words, but a video is worth more than a thousand images. Now youtubers fill stadiums with just a mobile phone. Only fifty euros for them to make a video and connect with their followers. And is that, although the phrase is already very tight, it is undoubted that the video is king. It is shown that the brain retains 70% of the information it sees and hears. And this is the reason for the triumph of the video tool. The numbers speak for themselves. 4 billion videos are consumed every day. It is the most powerful tool for influencing human behavior. The video is already responsible for 76% of the content we consume and YouTube is the leading platform for video consumption. Not only that. It is also the second content search engine. We search content on YouTube, just behind Google. And YouTube has come up with the key: connect with the emotions of your potential customers."

The digital transformation does not exist. Companies do not want to be digital. They need growth, be startups, innovators. This is what traditional companies want to be. Return to what they were at birth.

The growth of large companies in recent years tells us that Facebook has increased its value by 2.3%, Google has done 2% and Amazon, 3.5% in three years. The shares of Amazon have increased from 300 euros to 1,800 euros that are worth today. Welcome to the new economy. Only four companies account for more than half of European GDP. If we compare the value of Amazon with that of all the major retailers in the United States together, Amazon continues to win. You have to add companies from other sectors to get to match its value to that of the giant. If you analyze the growth of Amazon since 2017, you can see a growth that is not linear, but exponential. Its growth in just one year is equivalent to the total turnover of the sum of large companies such as Lego, Hermés, Lacoste, Chanel or Rolex.

The power of Amazon is such that when it announces that it has bought a company, the value of its competitors plummets. And it manages to do it even when it comes to rumors. It was said that Amazon would buy a well-known sports company, and then the value of its competitors fell precipitously. It was just a rumor.

Traditional advertising is obsolete. And in 2018 more money has been invested in the digital channel than in the traditional one for the first time in history. As Estée Lauder warned, the brands that grow the most are not advertised in a traditional way. Now Facebook and Google account for 50% of investment in advertising. And it's Facebook has more followers than Budha himself. Facebook's plan in recent years has been to expand its business models and has bought other companies such as Instagram or WhatsApp. The ecosystem of Google includes so many companies that Google does not even know what it has.

Amazon, although it seems the opposite, is one of the most offline companies that exist. It has many stores and logistics centers. It is the store that sells everything. And this has its consequences. Each time they close more stores. The traditional retail model is obsolete. It's time to reinvent yourself and create, also for small merchants.

"After all this, it is worth asking: who will cry when your company closes? If the answer is nobody, you have a problem," concluded the manager of Estrella Galicia.

E-commerce is no longer such

Jorge Llerena Díaz, Head of Digital Strategy & Growth of El Corte Inglés, gave a presentation entitled Future Ready, in which he addressed the main challenges facing traditional companies. Llerena noted that: "First of all, you have to know how much of your income is in danger from digital disruption. It is estimated that in the next 5 years at the multisector level, 32% of the income of traditional companies will be in danger, so it seems obvious where to focus if we do not want to lose anything more and nothing less than a third of our income. . Disrupting companies break down barriers of entry creating business opportunities and breaking traditionally successful models. There are already companies like Google, Amazon or Facebook that appear quickly between your company and your customers. "

It has nothing to do with how we behave in our day to day life, as we did years ago. What is the main impact of digitization? We tend towards the configuration of everything, but nobody knows where we are going and traditional companies do not know how to value it. While traditional organizations grow at a gradual pace, technological organizations do so exponentially. Therefore, traditional retail must evolve. We no longer talk about off and on. We speak of synergy of both.

Today, there are five trends:

1. The service as a brand exponent. Consumers already value service and customer service more than price.
2. Culture. More than half of consumers in the United States are more open to shopping in socially responsible companies.
3. The shipment is part of the user's experience. 25% of the claims in e-commerce are produced by the delivery terms and each time it is valued more than the shipping is free.
4. The role of the experiential and the subscription.
5. Omnichannel

And, what are the trends of tomorrow? New forms of relationship that reinforce the importance of data favoring the hegemony of the retail giants. For example, voice commerce and new forms of reality, such as augmented reality, which reduces the cognitive space also with companies. The social commerce We look for information before buying. The consolidation of the retail giants. The data is the center of everything. The five companies that bill the most in the world are technological. The channels and the first mile. Users increasingly consume less television and spend more time on social networks. And we have gone from "pure-player" to "data-player". Companies like Amazon or Alibaba have jumped into the offline market applying their knowledge and data from the digital world to the offline world.

The business is in the companies that do business through the big ones. Traditional companies must work to reach the "future ready". If innovation is not managed, the place can be destroyed. You always have to know how we innovate, but we have to align ourselves with what we are. When you have something unique as a company, you have to make it sexy and relevant and lead the innovation there to capture the customer.

For us, e-commerce is no longer such. It's commerce because it adds the off part and the online part. The key business variables in commerce are: self-management capabilities, reliability as a brand, assortment and the same offer in any channel, speed and personalized communication. The retail of the future is to have the customer in the center. The era of electronic commerce will end in the next ten years, and only by combining online and offline can we succeed. The role of retail stores goes through the point of sale, the logistics center, the showroom or product exhibition and the customer's knowledge source. It is not about separating between the real and the virtual, but between the old and the new.

What people do at work can be divided into: 70% today, 20% tomorrow, and 10% the future. However, the value that this brings is inversely proportional. The minimum dedication to the future and tomorrow has great value in the medium to long term. You should not work on yesterday because it detracts from the company."

Jorge Martín (Klikin - Repsol): "The key to e-commerce is improving the algorithms"

At the end of his speech, a discussion table moderated by Vinyet Bravo Rojo, director of Adecco Outsourcing, in which Mario Pollastrini Verde, Ecommerce & Digital Shopper Marketing Manager in The Coca-Cola Company participated; and Jorge Martín, commercial director of Klikin, start-up of Repsol. All of them discussed the trends that will mark the e-commerce and the most relevant challenges that companies will face in the near future.

Asked about the investment of large companies in the start-ups, Jorge Martín (Klikin) said that it is partly due to "the need for speed of adaptation and freedom to create and think about the tomorrow of big companies to survive. The pace at which the market moves, the technological future [...] today the big companies of the IBEX are betting on start-up as Klikin, who think two steps further because they can not compete directly with large companies. We help the companies we work with to market their products in the best possible way. We want to break the barrier between client and supplier to work together."

Mario Pollastrini (The Coca Cola Company), asked about the innovation of a company like his, pointed out: "The capacity for innovation is constant. Many people ask what we do in e-commerce. The idea is different from the usual one. It is being closer to consumers. A commercial lever. We do not sell anything directly to the consumer. There are others who sell it to the consumer. It is the contact with the B2B client to improve the positioning of the brand. We accompany clients. We do not want customer-supplier relationship. We want omnicality and partnership."

Vinyet asked them about the repairs of the users when making their purchases online, since until recently the insecurity was one of the main barriers for them. Jorge highlighted one fact: "For every five euros consumed in Spain, one euro is for e-commerce. There are no longer two channels: e-commerce and retail. There is a tendency for people in the physical store to consult online information about your products on your own website. The trend is changing. There are no longer two channels, but one channel. The new generations are willing to share more data. More tranquility The barrier of e-commerce is not so much insecurity. You have to try to pass that on. Take advantage by including different payment methods. Like 'Apply to me' or 'Pay Later', which allow the user to choose how he / she will make the purchase. There he competes with the Corte Inglés, which has always been a leader in financing. People are already doing it. Another example is Fintonic. People have given access to their accounts to make predictions. Or Alexa, who finds out now that I'm taking pizza. You have to get rid of the insecurities and they are getting smaller."

Mario, meanwhile, responded to the differences between some sectors and others: "In food, for example, only 1% of sales come from e-commerce. There are still many retailers in their initial phase, although the average Spaniard is totally immersed in digitization. However, when your business model occurs in a digital environment, you tend to digitize much faster."

The director of Klikin, asked about the need to be aligned with the digital marketing strategy, said: "In e-commerce you have to always measure. We are not going to see what people like anymore. Now we impose that you like it. The future lies in knowing where you spend your money. That's why the big ones are getting into payment methods. The key is to analyze the traceability of the data. If I had to invest one euro in e-commerce, I would see the traceability of the data."

Vinyet asked Mario (Coca-Cola) about the challenges faced by brands in e-commerce and he is clear about it: "Making the experience between the physical and the online work is very difficult to achieve, but critical. And we have to be there if we want to be relevant. In the online world you can create new layers of value: special products very niche. The customization is very important. We have already taken fully customized products, such as incorporating your name in a can. We have also developed customized beverages, which you can configure to your liking. For example, a peach and vanilla Coca-Cola or a mint Aquarius."

On the technologies that will affect the future, Jorge added: "The key is to improve algorithms. On this Deliveroo is based, on knowing exactly when to pick up order, when to deliver it. Also the augmented reality in the Ikea case, which allows you to try at home before the sofa you are going to buy. The focus of innovation is on getting data in different ways. For example, Alexa has changed the way we access brands. Know what you think and want to do. The future e-commerce is in getting as much data as possible from each consumer. We talked before the importance of delivering the products in increasingly shorter periods: one hour, two hours ... Restaurants have to deliver on average, so transport and shipping are paramount. You have to give them enough tools so that your company contributes more value than your competitor. The focus of e-commerce is precisely on the data, the algorithms. In a few years we will all work with four companies, the big ones, so we have to ally ourselves with the enemy. "

Mario Pollastrini (Coca-Cola): "We are finalizing the Middle Ages of e-commerce"

The way to conquer the user now has changed. This was expressed by the manager of Coca-Cola: "The processes must be transparent for the consumer so that he can focus on enjoying the experience or the product he has purchased. We work drinking moments to understand the moments of consumption over a period of time, as well as the motivations behind that consumption: hydrate, socialize, etc. In other countries we have carried out initiatives of voice commerce, in which, during Christmas, you asked Alexa for inspiration and in a short time you had in your hand the cocktail that you liked the most. Based on these environments and types of clients we work, depending on the needs of each one."

Asked about the impact of e-commerce on retailers, Jorge said that "many manufacturers have taken advantage of direct sales. And now they are thinking how to compete with big companies like Amazon and Deliveroo. There are restaurants that are able to generate the same volume for themselves as for Just Eat. Users, before buying an unknown brand on Amazon, consult it on their own website. This is the moment to capture that client. And that's where you have to be prepared. There are restaurant cases that have been removed from these channels (Just Eat / Deliveroo) because they have become independent after having the data previously in the phase being in the big operators. There is a future."

Vinyet Bravo asked Mario Pollastrini about the launch of testing products and how they fit into electronic commerce. He assured that "we have tried it on some products in some countries, although it applies much more to small companies, since with industrial production processes it is sometimes not feasible to test a product in a low turnover channel."

The round table ended with the question: what awaits us now of the e-commerce world? Mario concluded by saying that "we are finalizing the Middle Ages of e-commerce. Many technologies are very fragmented. To the extent that they are standardized, simplification of the processes and the scalability of the e-commerces will be achieved. There the true revolution will take place. The e-commerce will reach more industries and customers in a massive way."

Jorge, for his part, closed the session indicating that "the trend that is seen in search engines and aggregators is customer service before and after the purchase of the product is online or physical. Opinions will always be consulted on the internet before buying. Before buying, we filter by valuation. You have to bet clearly for customer service. The English Court has always done great in this regard. Financing, variety of payment methods and customer service are the keys to the future success and growth of e-commerce. "

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

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