Get Online, or Get Left Behind

Online Retailing

Also contained within the survey: facts and figures regarding traditional stores versus online sales. Approximately 70 per cent of respondents said they would be making purchases from “bricks and mortar” stores, while the remaining 30 per cent stated they would be turning to their computers this holiday season for gift-buying. While some are treating the 30 per cent figure as insignificant, in reality almost a third of all Australians will buy books, CD, electronics, clothing and other items via the Internet rather than getting into their cars, driving to the nearest shopping centre, and spending hours alongside hundreds if not thousands of other shoppers doing the exact same thing.

For Australian retailers, the sooner they jump on the Internet bus, the less chance they have of getting crushed under its wheels. Worldwide, Internet sales are increasing, partly out of convenience, and often out of necessity. Although many of us enjoy venturing into book stores and music shops (those that still remain), more and more people find it easier to set up an account with a major online retailer such as Amazon, HMV, or eBay, make a selection, click our mouse to pay via the convenience of a credit card or PayPal, and eagerly wait for the postman to arrive at our door.

The Lure of Cyber Monday

Although it sounds somewhat like the evil twin of “Black Friday,” Cyber Monday is showing retailers in Australia and elsewhere just how much of a demand there is for online shopping at reduced prices. In the United States, Black Friday sales – so named for the time of year when retailers are “in the black” instead of in the red – follow Thanksgiving. Existing for over half a century, Black Friday sales have become increasingly popular in recent years, and have been recently welcomed by another sale day to rival Black Friday and Boxing Day, namely Cyber Monday. Instead of shoppers heading to the malls, Cyber Monday sees them remain at home or work behind their computer screen, taking advantage of online shopping bargains.

Part of the reason for the increase in online shopping is not just the convenience it offers, but the ease of accessibility that comes with using iPhones and other smart phones and hand-held devices, with over 22 per cent of buyers accessing retailer web sites – with 12 per cent making a purchase – via these mobile devices instead of regular computers.

According to IBM, “The iPhone continues to drive more retail shopping than any other device with traffic reaching 8.7 per cent versus 7.2 per cent and 6.3 per cent for iPad and Android respectively.” In the United States on Black Friday in November, online shoppers spent a record $1.042 billion U.S. in just one day. In total, over 57 million Americans went online to visit shopping sites, an 18 per cent increase from just last year.

What does this mean for Australian retailers in their battle for consumer dollars? While some traditional bricks and mortar retailers have set up virtual shops at major online sites such as eBay – where some 70 retailers like Dotti, Ksubi, and Supre today account for 82 per cent Australian sales – others have been slow to recognise the tremendous potential of Internet sales. With traditional stores, merchants depend on customers, mainly locals, to walk through the front doors; with online sales, shoppers can be anywhere on the planet.

Old Habits Die Hard

Although the gap between Australian and American online retail selling is shrinking, the difference between the two nations, at six per cent and 10 per cent of sales, is still evident, and will continue to grow unless the nation’s retailers become more assertive when it comes to establishing their online presence. In the coming years, the issue will become one of older, established retailers comfortable in their shopping malls compared to newer, trendier fashion stores and boutiques – clothing is the fastest-growing category of all – catering to a younger audience. To many of the latter, the concept of going into a shopping centre is as foreign as the notion of an octogenarian going online to purchase a pair of trousers.

Some older, established stores – many of them having witnessed the demise of yet other older stores which failed to evolve – are, wisely, getting aboard the Internet train. Names known not only in Australia but worldwide, like Woolworths, Coles, David Jones and Myer, have invested heavily into creating a significant presence online and regaining some of the market share they lost in recent years to Internet savvy retailers. This has led to a multi-channel creation for consumers who are able to make purchases in-store and online, unlike companies like juggernaut Amazon, which makes all goods available for sale online only, with no physical stores in site.

Unfortunately for physical retailers, challenges do remain: long in-store line-ups, lack of helpful staff. While relatively unknown outside North America, three Canadian fashion retailers – Point Zero, Joshua Perets, and lingerie seller Le Vie en Rose – are coming to Australia to set up shop next year with plans to set up over 100 locations across the nation and continue international online sales. Realising the importance of good customer service, a management team including customer specialists is also coming to Australia and, as one official said, “They should learn from us how important customer service is and how lacking it is in Australia.” Strong words, indeed, and ones that must be heeded to attract new customers and keep old ones coming back. Unhelpful staff, or worse yet, rude staff, often play a role in a customer’s overall shopping experience.

While it is still too early to determine the long-term feasibility of maintaining multiple brick and mortar stores and a strong Internet presence – with some speculating that online-only retailers may have a fight on their hands – there are still a number of issues physical-only stores have to deal with, such as rent, lengthy leases, insurance, salaries for in-store staff, and the like. In the wake of the Global Financial Crisis and the high Australian dollar some stores, like Myer, are opening smaller locations instead of massive spaces.

To succeed in the future, the nation’s bricks and mortar retailers need to embrace online selling in as smooth a form as possible, and not simply cobble some code together and put it on the Web in an attempt to bolster sales. There will always be a need for physical stores, but in order to survive, and thrive, they must integrate online sales as seamlessly and professionally as possible. Unlike bricks and mortar stores, the Internet is not dependant on walk-in customers from a local area, and can serve clients from Botswana to Bangladesh and beyond. Even in cases where someone may just browse a web site, he or she becomes quickly familiar with the retailer, the nature of products, and much more, creating a familiarity with brands and selection.

Recently, some Australian brands went online with “Click Frenzy,” their version of Cyber Monday to coincide with what has become the biggest annual e-commerce shopping day in America. This year alone to September, online shopping in Australia reached $12.1 billion, and for sellers who want to survive years into the future, a solid Internet presence and events like Click Frenzy will ensure their success.

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

December 16, 2018, 6:43 AM AEDT