The next step in online retail

With the retail sector coming to grips with the online revolution our retailers need to find new ways to keep today's digitally connected customer satisfied.

The recent NAB Online Retail Sales Index findings demonstrate a new empowered, informed and digitally connected breed of shopper is emerging in Australia.  Online shoppers in Australia are now spending a massive $11 billion a year on internet purchases and consumers in their 30s and 40s are dominating this retail evolution.

The Index found that annual online sales grew 15.5 per cent - compared with just 4.1 per cent for bricks and mortar stores in Australia. This demonstrates that we are undergoing the same online revolution as the United States and Europe with a distinct shift in the buying behaviour of consumers.

While the retail sector is grappling with such a huge structural change - consumers have become more sophisticated in their purchasing decisions and how they want to engage with brands. Consumers want to be able to purchase online, possibly pick up in store, and use their mobile devices and smart phones to speed payments and purchase or research on the go.

An example of multichannel success is women’s fitness and leisurewear brand, Lorna Jane. The company has embarked on a localised strategy, by maintaining Facebook pages for each of its 131 retail stores. The intent is to build a community around each local store in order to offer customers as close to what they want as possible.

Sharing the brand’s experience with social media has meant that its online sales are now equivalent to the sales of seven of its bricks and mortar stores, with 10 per cent of conversions coming from Facebook. Lorna Jane has experienced a 300 per cent increase in web traffic and 400 per cent lift in online sales over the past 18 months, launching a new website last week. This website, based on the hybris ecommerce platform, will enable them to support this growing demand more effectively and expand into the US with a localised website and distribution center in the coming months.

However, on the whole, retail companies in Australia are still exhibiting reluctance towards online trading and in particular, taking a truly integrated multichannel approach to business.  Some would argue that they have had to pay high rents for their stores in Australia, along with high staff costs and the funds just haven’t been there to invest online. Others would argue that the shipping times and costs don’t make it worth their while. There is also a strong high-street ethic in Australia and an ingrained social side to shopping. 

So what should Australian retailers do? One of the main things is to acquire a multi-channel mindset. Merchants must link up the different channels already used by consumers to meet the requirements of different buying patterns. Only with a cross-channel approach can they reach their customers where the purchase is made - whether in the shop, over the internet or by browsing a catalogue.

Particularly in Australia, where smart phone penetration outstrips the US and UK, retailers should recognise that mobile will play an ever increasing role in that multichannel journey, and not always for buying.  Often it acts as an information tool to aid the multichannel shopping journey – a tool for more information or a vehicle for discount vouchers or special offers.

Integrated data is essential in the multi-channel strategy.  It should be consistent, relevant and accurate and able to be accessed instantly and across all channels, enhancing the customer experience with the brand.

Delivering the ‘customer experience’ is no longer about doing so through a single channel. These days the customer experience has to be across all channels - sometimes even multiple channels simultaneously. 

Kees de Vos is the vice president at hybrisa global vendor of multichannel commerce software.

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