Paris (AFP)

Physical stores which are sacking in turn, digital players with insolent results: the Covid-19 and confinement have accelerated the anchoring of online commerce in consumption habits, requiring a forced transformation of economic models, with a risk for employment.

An almost caricature day: on August 18, the star of the British retailer Marks & Spencer announced the separation of 7,000 people, a few hours before the online retail giant Amazon said to recruit 3,500 in the United States. The summer saw a proliferation of shattering announcements on the job market, especially in Great Britain.

On the one hand, 2,500 jobs cut at Debenhams, which filed for bankruptcy in April; 1,300 at John Lewis; 450 at Selfridges; or 4,000 at Boots pharmacies. On the other, the supermarket giant Tesco, which announces that it will create 16,000 jobs to support the strong growth of its online activities.

"It is very clear that the digitalization of commerce, if it has been there for a very long time, is accelerating enormously", observes Hervé Gilg, distribution specialist within the consulting firm in business transformation Alvarez & Marsal. For the benefit of companies which already carried out a significant part of their activity online.

Amazon of course, which doubled its net profit in the second quarter. But also the German Zalando, heavyweight in online ready-to-wear, which saw its consumer base increase by 20% in the first half of 2020, to 34 million active consumers.

Or Walmart, yet not a "pure player" (actor only active online) but which has been able to rely on the boom in online commerce in the United States, and on government consumer aid, to beat the market expectations.

- "Must be present" -

It's simple: "e-commerce has increased by 41% in just three months, against a growth of 22% in 2020", explained the specialist in market research Kantar at the end of July. "In France, UK, Spain and China, the average market share fell from 8.8% to 12.4%." In China, online commerce already represents "a quarter of spending on consumer goods".

Evolution was already at work before Covid-19 affected the global economy. But the sudden drop in activity following the confinement had a "very significant jaws effect for non-food businesses most dependent on physical outlets," notes Hervé Gilg.

This unprecedented situation "made aware or confirmed to all the + retail + players that it was essential to be present on the Internet, and to be as competitive as possible", considers Stéphane Charvériat, associate director. senior at the Boston Consulting Group (BCG).

"Even well-equipped companies in online commerce have discovered that they were not sized, in terms of quality and quantity, for the demand that we knew and that we still know in the context of this epidemic ", adds Mr. Gilg.

- "Significant investments" -

We must evolve, but this "requires significant resources and investments," recalls Mr. Charvériat, even though some of these companies have seen their cash flow melt away. And the money invested to be present online will not be for the physical network.

At the end of July, the French Commerce Council asked the government for a "tax credit or an accelerated excess depreciation mechanism to support digital investments".

These transformations will also take place under pressure from international heavyweights, already well established online, such as Amazon.

"Obviously, it's a very big challenge to face the big platforms", agrees Stéphane Charvériat, but "even without having the weapons to fight in head-on competition with them, retailers have the obligation to think about an Internet strategy, perhaps less aggressive, perhaps through alliances, including with these platforms ".

In addition, the physical network of retail chains can become a strength, believes Hervé Gilg. International tourists, when they can return, will still be fond of a visit to famous stores. "And then Apple has shown very well the dramatization that a store can bring." Finally, stores can play on "authenticity", which is sometimes lacking in marketplace platforms, to convince consumers.

© 2020 AFP