E-commerce: jackpot in franchise networks

E-commerce: jackpot in franchise networks

An article from the Special Edition Franchise of L’Express on sale since March 17

Franchise websites have long been reduced to beautiful digital storefronts. The proof in figures: in 2016, only 52% of networks had a merchant site, according to the Banque Populaire/French Franchise Federation/CSA survey, dating from the same year. “There was a double obstacle to digitization, analyzes Julien Siouffi, franchise and digital expert, founding member of Franchise Board. First, why question a model that works? Then, how to get franchisees on board when it does not there is no relationship of subordination between the protagonists?

Points of sale have long been reluctant to begin their digital shift, e-commerce being perceived as unfair competition. But the Internet has continued to gain ground. With more than 112 billion euros in turnover in 2020, it represented 13.4% of trade, against 9.8% in 2019, according to the Federation of e-commerce and distance selling (Fevad). And it stood at 130 billion euros in 2021.

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Therefore, brands can no longer do without attractive and efficient merchant sites. And must involve franchisees in the deployment of their digital strategy. “Support for the franchisor is essential to address the challenges of omnichannel. We must get out of the daily problems of the field, recall the reality of today’s customer experience, ensure consistency between physical commerce and commercial online”, notes Ludivine Bertrand, marketing and communication consultant at Progressium.

A 14% increase in turnover

To the franchisees who remain skeptical, the brands oppose a strong argument: the additional sales generated in the store thanks to customer databases and loyalty programs. According to a study targeting the profile of the e-merchant (Oxatis, Fevad, Kedge Business School), the increase in turnover in stores linked to e-commerce amounts to 14% on average . The La Compagnie du Lit site thus considerably increases the number of visitors to the points of sale. “It attracts 20 to 25% more customers in stores, testifies Éric Romedenne, founder and manager of the brand. If we are not present online, Internet users will go to the competition, especially among pure players.

No question, however, of placing all your eggs in one basket. La Compagnie du Lit has certainly enriched the content of its website with demonstration videos, but it also takes care to redirect Internet users to physical points of sale. And this, in particular, thanks to the click and test solution which allows the user to go and try the mattresses in the store closest to his home. Does the customer complete the purchase in store? Hard to say. In any case, if the turnover of the brand on the web has quintupled in recent years, the points of sale record very good double-digit growth every year. “We are gaining market share”, confirms Ludovic Woronoff, director of operations.

Does the customer complete the purchase in store? Hard to say. In any case, if the turnover of the brand on the web has quintupled in recent years, the points of sale record very good double-digit growth every year. “We are gaining market share”, confirms Ludovic Woronoff, director of operations.

Physical commerce remains essential

However, physical commerce remains unavoidable. “Shops are acclaimed for their anchoring in a precise geographical context, but also for the contact with the sellers”, recalls Ludivine Bertrand. This is the philosophy followed by Le Palais des thés, whose 66 shops (33 franchised) remain its strong point. However, the brand has been a pioneer in online sales. François-Xavier Delmas, its founder, launched the first website in 1999, even before the brand, founded in Paris in 1987, opened up to franchising. “The web will never replace the in-store experience, he says. We work like wine merchants. Without a place of sale, we would lose our soul. Moreover, if the first purchase is often made on the Internet, the following are in physical stores.”

For several years, the force of inertia of the franchisees dominated. Everything changed with the closure of the shops in 2020 due to the health crisis. Very quickly, the survival of many points of sale, even of networks, was decided on the web. The second-hand sector, in particular, had to reinvent itself in a few months to weather the storm. “Brands such as Cash Express have pooled their stocks in order to offer a richer offer and a guarantee of availability, while presenting consumers with the reassuring dimension of the local”, explains Julien Siouffi.

In some sectors, it is the franchisees who have set up unprecedented cooperation. Thus real estate, where agents have pooled their mandates and launched shared platforms such as eListing or Amepi. The catch-up was dazzling.

According to Fevad, the online turnover of under-brand stores (excluding food) jumped 53% while pure players only progressed by 11%. The networks even recorded peaks of 126% in May and 108% in November 2020. Overall, over the year, their growth was twice that of the market as a whole.

Evolution of e-commerce turnover

Evolution of e-commerce turnover

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This rapid progression also owes a lot to the conversion of catering brands to take-out and delivery. Aggregators were full in 2020: Just Eat captured 3,000 partner restaurants while Uber Eats and Deliveroo each referenced 8,000 new addresses. A flight fueled by the massive conversion of seated restaurant brands such as Buffalo Grill or La Boucherie.

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Fast food has also gone into overdrive. Subway, which has been testing these new sales channels for a few years in pilot stores, has converted many restaurants. “The pioneers were able to explain to other franchisees that profitability was not deteriorating. Many restaurants then took the plunge”, testifies Sandra Chassan, marketing director of the chain Today, more than 10% of the park has set up in-store pickup. And success is there: every month, the volume of sales increases by 150%. As for delivery, its weight has increased from 16% before the pandemic to 25% in June 2021. Contrary to popular belief, the Internet could well be the best ally of our traditional shops.


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