The latest Roy Morgan Research finding confirms a trend most of us are probably aware of – More than 50% of Australians now shop online. In the last year alone, online retail has grown 12% taking the percentage of online retail as a part of overall retail spending to 9%. While that may look like a small number, it points to something much larger, a trend and a fast growing one at that. Online shopping is here to stay and it’s increasingly going mainstream.
What does this mean for traditional brick-and-mortar retailers? Do they continue as normal and hope to grow, or do they adjust their strategy and launch/re-vamp their online offering?
Online shopping is posing what is arguably the biggest challenge to traditional retail in the last decade. Be it the smaller family owned businesses or the large retail houses. Advancing technology and hand-held computing are only making online shopping easier, faster and more accessible. With the global market now within reach, prices are more competitive than ever. And more options mean consumers are increasingly calling the shots.
What this means is that no longer is it acceptable to just put up a website and have an online presence. Viewing the Internet as another revenue stream – and a growing one – is what’s needed. This means investing in the infrastructure needed to optimize your website for e-commerce. Making sure your User Interface (UI) is elegant, simple and easy to navigate. And ensuring your site delivers on key customer needs.
It doesn’t just stop with a website. The other big number that’s come out of research is the use of smartphones for online purchases. The use of Smartphones for shopping has grown a whopping 101% in the last year. Add to that the fact that smartphone penetration in Australia is now at 50% and the message is clear. Your consumer is increasingly interacting with your brand via a smartphone. Is your brand ready for this? Is your website optimized for smartphones? Do you have an app that makes interacting and shopping from your store easier? Is your e-commerce infrastructure geared to handle phone transactions? These are critical questions and you ignore them at your own risk.
In our interaction with clients we’re seeing an increased need for comprehensive, integrated digital strategies. Rather than adopt digital as an add-on, clients now need to build digital into their core marketing strategy and offerings. This includes ensuring their hosting can handle increased traffic and data. Their pricing is-up-to-date, relevant and location specific. Their user interface is simple and easy to navigate. And their delivery channels are robust.
Globally, the big retail brands are already doing this. Macy's (which includes Bloomingdale's in its stable) recently revealed that it’s been investing heavily in web technologies with it’s website slated to become a big component of the business. The results are already showing: 89% of its growth came from online sales and overall profits have surged 20%.
John Lewis, another brand that’s embraced online retail, has made click and collect a central part of its online strategy. It now offers consumers the option of picking up their purchases from any of the Group’s supermarket chain outlets.
Kmart USA is another big retailer who’s investing heavily in online retail.
As these examples show, those retailers who choose to play in both spaces can do extremely well and convert what is a challenge into a great opportunity for growth.
There’s an old saying in the Stock Markets – The trend is your friend. Australian retailers would do well to take this to heart. The trend is clearly in favour of online retail, and for those who embrace it, it’s an opportunity like no other.
If you’re a retailer looking to establish or enhance your online presence, feel free to talk to us about how an integrated digital strategy can help you grow your business.
Sources: Roy Morgan Research, abc.net.au
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