It’s a changing world, and the pace of change is continuously accelerating.
The way people do business, and the ways in which they buy and sell, have changed.
Ignoring these developments could be a costly mistake.
And the world of retail presents a classic example of the need to move with the times if we want our businesses to thrive or even just survive.
Blinkers Off: Online Shopping Is a Threat
Earlier this year, I touched on the rise of online shopping as a trend no retailer can afford to overlook. To recap: online shopping may not have replaced brick and mortar stores – yet – but it is making inroads. In New Zealand, 8-10 percent of retail spending happens online. That online marketplace competes in a wider arena. An estimated 45 percent of our retail purchases go to offshore companies, so your competitor isn’t just the shop down the street it is now anyone in the world in your category.
I concede that New Zealand’s retails sales are showing year-on-year growth.
But globally news reports show retail giant after retail giant “reducing their footprint, and it is only a matter of time before we see this trend.
If you need a list of the big names that are experiencing troubled times, you won’t have far to look. What happened to Pumpkin Patch? Well, apart from going “bust” and getting sold to an Australian consortium, it’s left the high street and now has an online shopping focus.ow long did Top Shop last in NZ, or more recently Andrea Moore?
In the US, we see household name Toys R Us closing no fewer than 800 stores. The group also closed every single one of its UK outlets. It’s not that people have stopped buying toys for their kids. Instead, they’re buying even more toys, but they’re getting them online. Most frustrating of all, especially for the hundreds who lost their jobs, Toys R Us knew where its dwindling business was going but refused to adapt.
But single examples aren’t as compelling as the big picture. People are calling it #Retailpocalpyse, and what it adds up to is an unprecedented amount of retail space that’s falling vacant owing to business closures. 2018, they say, will be a record-breaker – at least, until 2019.
Open Your Eyes: Online Shopping is an Opportunity
Online shopping doesn’t have to spell the end for bricks and mortar stores. It’s a growing market, but you have to take it seriously, it isn’t just a nice to have bolt on.
The good news is a hybrid version is the way that some of the world’s top brands are currently going. In the US, brands like Home Depot and Victoria’s Secret are bolstering their offline presence with online shopping options.
You can shop online, you can shop offline, or you can enjoy a combination in which social media, Apps, online offers, competitions, and coupons translate into both on and offline business. And when your customers are in your store, their smartphones become their shopping companions. It’s called the omnichannel experience and getting the physical shopping experience connected to the online one is the key. And to truly be able to enable this you need to know your customer, and you need to have a one to one relationship with them.
So what what do my customers want? Well the answers aren’t hard to find:
- Today’s consumers want to know everything about their products. Where is it from? What is it made of? Is it the result of ethical business practices?
- They want unique shopping experiences, and technology provides many opportunities to get creative. Personalized marketing is part of the deal.
- Mobile payment solutions are the next “big thing.” That’s right, making it easy means more business for you. Failing to do so can and very likely will cost you sales.
- Consumers want personalized service. They always have. It just hasn’t always been possible to offer this in the past. But with individual purchasing behaviour captured electronically, you can get a very good idea of what your customers want, and alert them to the offers they don’t want to miss.
- Same-day shipping will tip the balance in your favour. In the past, having to wait for purchases to arrive was a downside of online shopping – but that’s not true any longer.
- No surprises: they want free shipping. When customers view an item and see a price, they don’t want a hefty shipping fee to add to the bill. Trade Me is aware of “shipping shock,” and is incentivizing shipping-inclusive pricing on its platform as it prepares to go head-to-head with Amazon.
- Online or offline, customers want a seamless shopping experience. Whether they’re working with Apps, social media, physical stores or online shopping, your clients expect an unified experience.
It is interesting to read in one of The Warehouse’s investor packs has spelt out their vision of incorporating e-commerce into its business model, and in the process, it hopes to leverage in-store sales. To do this, it’s providing a “click and collect” service, allowing clients to shop online and then collect their purchases at the nearest outlet. But it’s also working to provide excellent service to online shoppers with delivery options including a speedy two-hour arrival of goods ordered.
The Warehouse is also working on personalized shopping experiences. It’s the digital version of the old-fashioned corner shop where the sales assistant recognized you when you walked in and immediately directed you to the offers in which you’d be interested. But instead of it relying on a shop assistant’s memory, it’s driven by data and technology.
They are also looking to launch The Warehouse marketplace. Information is still hard to come by and I wonder if it is going to be a true marketplace, or for just their brands? If not, are other retailers brave enough to join it, or will they:
- a) Think they can do it better or
- b) Not want to be on the same platform as The Warehouse?
Here’s the challenge for Retailers:
A blinkered, “This is the way we’ve always worked or we’re ok we’re growing approach could see you going the way of Toys R Us. Harsh as it may sound, just having an online presence isn’t enough anymore. Online shopping isn’t an add-on to your retail chain or store. It needs to become part of the overall shopping experience.
Whether they’re online or off, in-store or armchair shopping, your customers are waiting for you to give them what they want.