Editorial / Multichannel
Editorial: Innovation Key to Successful Retailing Future
- 10th March
- Nirosha Methananda 275
Between the Borders collapse and the furore over the GST threshold – we examine how retailers can and should be innovating to ensure on and offline business success.
With the recent collapse of Borders, claims of ‘not being able to compete with online’ and ‘not adopting online strategies’ have been bandied around as ‘the factor’ that has forced the company into financial turmoil. Coupled with the earlier formation of the Retail Coalition locally and their calls to decrease the GST threshold for international retailers selling online – you wouldn’t be remiss in thinking that the Australian retail industry is on the brink of catastrophe and that ‘nasty’ international and undercutting online retailers are to blame.
Barnes & Noble innovate by offering free Wifi in store, for customers with e-readers to sample e-books.
However are these fears and scaremongering tactics reflective of the actual situation? Or is it simply that those shouting from the rooftops have failed to listen to their target markets and move with the times?
By this, I don’t mean necessarily moving to an online experience (although, obviously in this day and age, this is an essential business practice)… it’s more to do with opening up and seeing what technologies, practices and strategies can be leveraged in order to keep the physical shopping experience interactive and engaging.
I’m venturing off the usual Power Retail path slightly here, however, with the current trends and the enormous leaps in development and uptake of technology – it is impossible to ignore that the opportunities and possibilities to provide an awesome retail experience spanning from not just your website and/or bricks and mortar stores, to mobiles, tablets, gaming devices, catalogues, interactive kiosks and advertising, affiliate partners… the possibilities are endless.
This notion is perfectly summed up by Lisa Gomez, a Senior Manager at Deloitte who studies the retail section (quoted by The Street), “The ‘one size fits all’ approach won’t work anymore, retailers need to determine what will create value for the specific customer.”
Rather than treat retail as a battle between online and offline retailing practice, retailers need to concentrate on integrating and personalising the retail experience to reflect consumer needs. There are numerous reports indicating that consumers are interacting through various channels – which one is correct? It might be online, it might be mobile, it might be bricks and mortar or all of the above – however it’s that old adage ‘you’ve got to be in it, to win it’ that will give you the answer.
Bricks and Mortar is Not Dead – Innovation Is Key
“Everyone is saying the store is dead, but I say long live the store,” proclaims Gomez. “The physical store is going to remain central to the shopping experience, but the walls are coming down. Customers are going to want an updated, unique experience in stores, and retailers will need to figure out what exactly they want and how to give it to them.”
Tennis legend Boris Becker launches Ralph Lauren's innovative touch window-shopping screen. (By Sang Tang, AP)
Seth Figerman of The Street identifies ways in which US and UK-based retailers are reacting and innovating to the ever changing landscape, to ensure the survival of their brand and offline businesses:
- Staples and JCPenney have introduced Internet-enabled kiosks to help consumers research products.
- Barnes & Noble has put Wi-Fi in all of its stores, encouraging customers with e-readers to sample digital books in-store.
- Ralph Lauren debuted a touch-screen window so consumers can literally window shop by browsing through products displayed on the screen and reserving items they want – allowing them to keep shopping after the store’s staff has gone home.
- Apple have made its stores a destination and less of an errand, allowing consumers to entertain themselves with current products and have access to knowledgeable staff.
- Disney are incorporating interactive video screens and ways to let consumers pay simply by swiping their mobile phone at the register.
- Best Buy’s Twelpforce utilises Twitter to answer customer questions and resolve complaints at all hours of the day.
- Tesco has begun to use loyalty cards to track customers’ shopping histories to recommend related products and services.
Figerman points out that while stores may get smaller, this does not necessarily represent a diminished market presence. This is apparent in the current market, where many pure-play online retailers (such as Shoes of Prey, Appliances Online and Kogan, etc) operate through various below the line channels and still manage to cut through, be considered and regarded highly along with other larger multichannel players.
“As stores begin to customise products more, the supply chain will get tighter and quicker, which means they won’t need as much inventory or square footage to store that inventory,” said Gomez.
This is a trend being set by stores like Walmart, well renowned for the big-box-one-stop-shop, the retailer is moving to a smaller store with a targeted selection of products.
What about the daily deals phenomenon? While this has raised some serious concerns for some retailers who may have underestimated the power of their daily deal offers – this concept can be adapted and leveraged in order to learn about local customer behaviour. Case in point, while walking through a shopping centre recently I noticed a kiosk type machine, with a small queue of people waiting for their turn. My curiosity piqued, I headed over to find that it was a registration and gaming point for individuals to have a chance at winning a daily deal (similar to a pokies machine) for one of the shops within the centre. Not only an innovative spin on the daily deals concept, but a great way to engage with consumers and drive traffic into stores.
A Change in Mind
Though price and product will always be a factor, they are certainly are not the be all and end all of the shopping experience. With all these exciting changes and movements in the world of retail, it’s a fantastic time to play in this space.
Perhaps put best by President of Disney Stores Worldwide, Jim Fielding (The Street), “I didn’t want to build a store for 2011, I wanted to build a store for 2015 and beyond. The pace of technology changes is speeding up, and we wanted to have a bricks-and-mortar store that embraced how consumers are going to shop in the future.”
So who knows if the Borders collapse was because they didn’t embrace online, or whether they couldn’t match online competitor pricing – rather than concentrating on what they didn’t do, we should be examining what they could have been doing in order to future-proof the business.
Much like Michael Fox in his recent article ‘A Star Trek Online Retailing Future‘, perhaps it’s time for retailers to think sci-fi and focus on the bigger picture, rather than the shortcomings of the here and now. It is this train of thought that will lead to the innovation, engagement and evolution of the retail industry.
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Obviously the “we can’t compete with online’ brigade have never heard of that other age old maxim “if you can’t beat em, join ‘em!” If online is so profitable vs bricks and mortar, why do the bricks and mortar stores not simply open an online store? The simple answer is because it’s not true – profitability is more or less the same. Failure of some businesses (online or otherwise) are rarely “someone else’s fault”