With technology moving at a million miles a minute – Michael Fox, steps into the world of science fiction look into what the future may hold for online retailing from a ‘Shoes of Prey’ perspective.
Though Shoes of Prey is a pure-play online retailer and we’ve decided against offline retailing for the time being, as we look to grow our business an important question for us is how large can the online retail industry grow as a percentage of total online retail sales and what will the industry look like in the future?
Estimates of online retail sales as a percentage of total retail sales in Australia vary from around three to five percent. In the US online retail sales currently account for around seven and a half percent of total retail sales and in the UK the figure is closer to 10 percent.
Jeff Bezos, Founder and CEO of Amazon in a letter to shareholders in 2000 said, ‘with growth in processing power, disk space and bandwidth he expects the online retail market to eventually settle at around 15 percent of total retail sales’. That’s an old quote and I wonder if that estimate is high enough?
Shoes of Prey is not even 18 months old so even thinking five years out is a long way for us, but it’s interesting to think about how large the market can grow in the future.
This is especially interesting when considering the major barriers for consumers buying a product like women’s fashion shoes online:
- Not being able to see the exact look and feel of the shoes, particularly the colour and quality.
- Not being able to fit and try the shoes on.
- Not being able to recreate the fun and often social experience that is often associated with offline shopping.
Let’s look forward 10 to 20 years and see how these issues might be addressed online. Keeping in mind that the first time most of us used the internet or even a mobile phone was only 15 years ago and now I have a device in my pocket that can tell me exactly where I am in the world, accurate to within a metre by communicating with satellites in space. Yes, space. So I don’t think these ideas are too far fetched!
The Look and Feel of the Shoes
Is virtual reality the way forward for enhancing the online retail experience? (Image Source: E-Discovery Bytes)
We’ve already seen an increase in our conversion rate since adding video content to our website and the anecdotal feedback from customers is that the videos provide a better way for them to see and understand the look, colour and quality of our shoes. Perhaps in the future, you’ll be able to pick up a holographic image of a shoe designed on Shoes of Prey, hold it in your hand and inspect small details like the stitching and colour tones. With a swipe of your hand the image transfers to your feet so you can see how the particular peep toe shape you like looks on your toes. Augmented reality on a screen was so 2010!
You can then put on holographic images of the different outfits in your wardrobe to see how the colour of the shoes matches the outfit. A couple of your friends may be available on Facebook, so you invite them for a holographic chat in your living room. You can not only show your friends your potential purchase, but get their opinion, try on different styles and recreate a virtual social shopping experience.
Fit and Not Being Able to Try Shoes On
We’ve already covered how a 3D image of a shoe you can try on could help with some fit decisions, but what about your shoe size? In 2030 you step in front of the 3D holographic camera in your living room and tell it to connect with Shoes of Prey to take measurements of your feet. The camera scans your feet and takes key measurements down to an accuracy of less than 0.1mm. Our software then creates a digital shoe last for you, develops a pattern based on your design and last, then prints the pattern and adjusts a physical last which our technicians then use to make your shoes. The result? Shoes that are much more comfortable than the mass produced shoes available in stores.
Putting Social Back Into Online Shopping
It’s raining and there’s too much traffic on Saturday morning so from the comfort of your own living room you walk through the holographic rendition of the Westfield Bondi Junction mall. A couple of your friends have joined you from their living rooms and you browse the shop windows. As Melbourne Cup is approaching and you need some new shoes, so you pop into the Shoes of Prey store where the holographic versions of Carmen and Susie are there to lend you a hand with designing your shoes. Together you review the outfit you have planned (your online wardrobe organiser has helped you select the dress based on who will also be at the Melbourne Cup event your’e attending and which outfits they’ve seen you wear before) and you design a pair of shoes that goes with your outfit. You realise you don’t yet have a hat so you call in an assistant from a boutique hat retailer who helps choose a hat to go with both your dress and new shoes.
Footloose and Fancy-Free?
My take is that the experiences described above are actually better than those of being in a physical store. If that’s the case, online retail could well become more than 50% of total retail sales.
To be honest though, if this is the future then both off and online retail will have effectively merged into one. We can already see this starting to happen with ‘multichannel’ retailing, where consumers are researching products online before buying in store. Alternatively they visit a store, select a product then check on their mobile phones to see if it’s available at a lower price nearby. Technology is only further going to blur the lines between offline and online retail.
While the estimate that online retail sales should grow to 15% of total retail sales is actually probably quite bullish for the Australian market over the next five years, I think it underestimates where the industry will be in 10 to 20 years time. What do you think?
Michael Fox also has his own blog 22 Michaels, which is a diary of the adventures, successes, failures and everything he has learnt, in the attempt to start his online retail business.