There are still many retail outlets that have either no online presence or a very limited one. These shops tend to be the ones dying a slow and painful death, with year-on-year sales drops and an evaporation of customer loyalty. They’re the ones where price increases aren’t about staying in line with inflation and where heavy discount sales are the norm instead of the exception.
They’re the ones that are eventually going to go out of business.
The evolution of retail
Retail has changed. There’s no hiding from the fact anymore, and it’s no longer in a transitionary phase: it’s not ‘changing’, it has ‘changed’. Anyone who hasn’t evolved with the marketplace is a long way behind already, and it will take considerable time and effort to catch up.
The ways in which retail has evolved are numerous. One of the major shifts is people moving their purchase patterns from brick-and-mortar stores to online retailers. At first this caught us all by surprise, with many traditional and larger retailers struggling to adjust.
Even the likes of Myer and David Jones were very late to the online party in understanding that there were some products in some channels that the consumers felt utterly comfortable buying online. And not only that, those online retailers that didn’t have the burden of rent and rates to pay suddenly found they could offer the same products at a much cheaper prices, especially if they sourced them outside of Australia. New, online-only retail businesses sprung up overnight.
So the odds were -- and still are -- stacked against the traditional retailer, especially for certain products. Urban myths arose of savvy tech shoppers wandering into Harvey Normans and using the retail giants’ very own connected PCs to go online and buy from a competitor website. I don’t know how true that is.
A new buying process
It may sound grim so far, but the future of strictly online shopping hasn’t arisen, nor will it ever. The most important evolution is that consumers have more shopping channels to shop from. And that choice exhibits itself online, where they research first, buy second and report finally. If your shop is not online, you’re not part of that buying process.
The illusion that retail is dying and that the consumer is buying everything online is exactly that: an illusion. Retail is strong as ever, and companies like Apple wouldn’t be opening retail outlets across the world if retail were on the way out.
Yes, some people do go into stores, research products and then go home and buy them. That’s known as showrooming for obvious reasons. But there is a growing and more dominant part of the market that engages in what’s known as reverse showrooming — doing their research on the web first and then going into a physical space and making the purchase. If your retail environment does not translate well and cannot be found easily online, then customers will skip over you and never even make it through your front door.
In summary, consumers have evolved to shop in multiple channels — online, mobile, phone, social media, mail, and in-person. They often want to engage in multiple channels before they make the purchase in the one that they’re most comfortable with. Your shop not only needs to have representation in all those channels, but that representation needs to be reflective of your high quality standards in every area. Great customer service and terrible websites do not grow businesses.
Remember: your website may be the one and only interaction customers have with you before they decide to jump in their car and buy. It can make or break your foot traffic. Without a solid online presence, it’s going to be a very hard struggle uphill.
This article first appeared in MYOB's The Pulse, to view it in its original form click here.