Bernie Johnson speaks with B&T Magazine about the state of online retail in Australia.
How does Australia’s online retail landscape compare to overseas markets?
Aussie retailers have definitely narrowed the gap; all the big players now have passable online offerings including Harvey’s, DJ’s, Myer & Big W. When I say passable, their websites are by no means groundbreaking, but at least there’s not as much clear air between local and overseas as there has been in recent years. The big problem facing local retailers – and it’s the same for overseas players – is that consumer behavior has been through a seismic shift. Consumers have become very adept at processing the large volumes of information available quickly – we’re extraordinarily value-driven. Whether it be price-comparing, blogs, review sites, word-of-mouth through social and so on, retailers need to take a much more holistic view of marketing and make sure their message is consistent through all online channels.
Do you think its popularity will ever reach parity with (or indeed, overtake) traditional retailing?
Nope, but we’re in an onmi-channel environment. Digital is fast becoming part of the traditional retailing experience, rather than existing as a separate channel. RFID, NFC, peer-to-peer and tap-and-go payments, QR codes, image-searching – these are all technologies which are complementing the in-store shopping experience, rather than cannibalising it.
What are the newest developments or issues in the online retail sector? Is there anything particularly new or newsworthy you’d like to discuss?
The first issue is that user experience is still pretty horrible on most Australian retail websites. Especially when jumping between mobile > tablet > desktop. Responsive design was trendy 18months ago, but it should be mainstay for all retailers now.
The second growth area for retailers will come from the convergence of mobile, social, big data and geo-location technologies. The result will be a massively improved personalised experience for customers.
Do you think big retailers like Myer and David Jones are keeping pace with the rush to online retail? How are they coping in the face of pure-plays like ASOS, The Iconic and Amazon?
Myer & DJs are in a better place than they were 18-months ago and are by no-means ignorant of the challenges ahead. The trouble is these guys don’t have the agility of the pure-play businesses, so the process of fundamentally transforming their business models will take some time to do. I think at some point in the next 18 months we’ll reach an equilibrium between the traditional retailers and the pure-plays, with the former starting to dominate. The technology gap is growing smaller every day, but the marketing grunt the traditional retailers have to throw at their brands will always be much higher than the pure-plays.
Shopping online is quickly becoming device agnostic
How important are mobile devices in online shopping’s future? Why?
Shopping online is quickly becoming device agnostic – consumers don’t care if they’re on a mobile, tablet or desktop; they want quick access to product or store information. As such, retailers need to understand that the brand experience must be seamless across all devices. The only thing which stops people buying through their mobile is that the user experience is pretty shit for most retailers.
“Showrooming”: Is this trend for shoppers to view products in stores then buy them online increasing?
Every loves instant gratification, so the preference of most consumers would be to walk away with the goods there and then. The only reason a customer will view in-store and buy online is that they get a better deal online. So the simple fix for traditional retailers is to offer price matching against any online retailer. Best Buy were getting hammered in the US by customers showrooming and then buying through Amazon – they started price matching and the problem went away.
“Geo-blocking”: Is this still a major challenge for the advancement of online retail in Australia?
It’s a Band-Aid solution which will never work. Unfortunately the Internet has no borders, so trying to block access to sites or not delivering to certain regions is a pretty porous long-term solution. What is important about IP detection is that it’s being used very effectively by the big international retailers to offer a personalised experience to Australian customers, with local currencies and price parity.
For years now Australia has talked about its struggling retail sector. Is online turning this around?
Online contribution is growing, but it’s still less than 15% of all retail. It’s been broader economic issues which have plagued the retail sector, so a broad recovery won’t be seen until we have a return of consumer confidence.
What are some the up and coming online retailers? (Ie ones that have launched within the last year that have interesting or unique or potentially successful positioning)?
The Fancy (www.thefancy.com) is a nice take on social photo sharing and mobile shopping – similar to Pinterest, but you can buy the products. Another site, Of a Kind (http://ofakind.com/) offers limited-edition access to buy styles from up-and-coming designers.
Is the future of retail online?
Consumers will become agnostic to where they interact with a brand or retailer, whether it be online or in-store. What digital creates however are opportunities for a much deeper and personalised experience and level of engagement which retailers can have with consumers.