Virtual Stores Come to Moscow

The concept of shopping with smartphones in a physical environment is being demonstrated in Moscow, at the Vystavochnaya metro station in Moscow City.

Vystavochnaya metro station in Moscow

Vystavochnaya metro station in Moscow

Inspired by examples like TESCO-Homeplus in South Korea, which debuted in 2011, the Moscow version is currently featuring the Russian branch of Germany-based Media Markt, part of the giant METRO retail group.

The concept is simple: billboards display images of products and associated QR codes, which shoppers scan with their smartphones. The scanned URLs open up the product detail page in the retailer’s web shop.

Media Markt "virtual store" in Moscow

Media Markts’ implementation of a “virtual store” in Moscow

Although it’s an interesting idea, it’s unlikely to be commercially relevant for a company like Media Markt. The value is mainly in its public relations impact. While electronics/technology is the single biggest category for online shopping in Russia (accounting for about 44% of total online retail sales in 2012), such products are generally not bought on impulse or habitually. Shoppers tend to take time to research their purchases, which is more easily done on a desktop or laptop computer.

Next up after Media Markt is Goodwin Project, a Russian start-up which will offer a broader array of product categories aggregated from different, independent, e-shops, and which will operate like a mobile shopping mall, receiving commissions on the sales it generates. The success of this channel will be tied to the types of products and merchants which the Goodwin Project platform can attract.

Such demonstration projects show that Russia can keep pace with other developed nations, but this is hardly a cutting-edge technology. While it could prove commercially successful by providing visibility to stores, brands, and products and facilitating mobile shopping, it does not address the principal frictions impeding the growth Russian e-commerce: logistics and payments.

 

About Leighton Peter Prabhu

I am a partner in Interstice Consulting LLP and head of the Russian office. My practice focuses on e-commerce business and marketing consulting, especially for foreign e-commerce brands entering the Russian market. I also serve as a consultant to some of the largest international portfolio investors in Russian equities (both public and private). You can find out more about my background and business interests on LinkedIn. You can also connect with me on Twitter and on Google+.

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