05 Aug 2016
Alibaba. eBay. ASOS. These are all names exemplifying the changing face of retail. Even Amazon has finally entered the Australian market.
As harbingers of the digital retail revolution run rampant, how can smaller online players hope to survive, let alone family owned brick-and-mortar retailers?
They can – and here are six predictions from some of Australia’s foremost retail experts for 2018. What does the year hold for small businesses in the sector?
Focus on what makes you different
“Amazon has established its extraordinary customer base by offering a wide range of goods at a low price, with speedy delivery and an incredibly convenient model,” Dominique Lamb, CEO at the National Retail Association, says.
“Don’t try and imitate a behemoth like Amazon.” - Dominique Lamb
“But on the flipside, I’m seeing more and more brilliant, smaller retailers offering something unique, special and a little bit out of the ordinary. This is something Amazon could never replicate nor compete with.”
Lamb says for SMEs, a good differentiation point is in simply being different.
“Don’t try and imitate a behemoth like Amazon,” he says. “Back up your offerings with exceptional, personalised customer service and never take your foot off the pedal when it comes to reliable and speedy fulfilment and delivery.”
Streamline the omni-channel experience
While online shopping and mobile commerce are keys to retail growth, omni-channel sales are the new black.
Yes, that’s right – people still want to touch and feel an item before buying it. According to Forrester Research, web-influenced sales account for 38 per cent of all retail sales in 2016.
Lamb believes the key is to rethink the traditional in-store experience.
“In-store experiences are moving toward feeling like you’re in your cool friend’s apartment, rather than a department store,” he says.
“Retailers need to use a carefully planned, slow-and-steady approach to using digital channels to build credibility, connection and loyalty, rather than trying to simply attract consumers’ attention to make sales.”
Provide indispensable human experiences
In the latest trend report by The Future Laboratory (one of Europe’s foremost trend forecasting consultancies), co-founder Martin Raymond says retailers must “refocus on the things that differentiate their business – service and experience.”
“After all, face-to-face interaction is something that online stores will never be able to replicate,” he says.
Research by Salesforce reveals more than 53 per cent of consumers preferred bricks-and-mortar shopping for this reason. So it’s crucial that retailers use human engagement to their advantage.
As a local business, consider how you can empower your sales team to build relationships or become brand ambassadors. Step back and think about how you create moments (in-store) that are memorable and unique.
Tap into the sharing economy
Why buy when you can borrow, for a fraction of the price? Peer-to-peer rentals (with all sorts of things on offer, from accommodation to cars to clothing) continue to be popular.
Australian start-up Your Closet is a homegrown success story. Retailers are now thinking of ways to incorporate a ‘rent-the-runway’ style experience into their stores.
Glamorous US department store Neiman Marcus is one of them – it’s launching a luxury fashion rental service in San Francisco.
Products are not the only things that customers share; they also share information. Customers seek reviews and photos via mobile apps, and expect interaction with brands instantaneously via social media.
Make sure you invest time into channels that your target market may be using. Thank customers for positive reviews and address negative feedback quickly.
Personalised shopping with real-time updates and information
Big data enables businesses to analyse information like never before. Consequently, retailers are now looking at ways to personalise the customer experience – as well as provide real-time information on payments and deliveries.
For example, customers now expect intelligent matching of ‘recommended products’ based on the programing of machine learning and artificial intelligence.
They also expect to log into an account and see their preferences, or find out exactly where an order is at, anytime, anywhere.
‘Brandsparency’ from factory to floor
Another trend that The Future Laboratory has identified is ‘brandsparency’. Consumers want to know what was involved in the development of products they see on the shop floor.
Brands are integrating ethical practices into their processes and finding ways to share them with customers.
If you are a retailer that values sustainability, tell a story and place it alongside your products on the shelf. What are they made of? Where did the materials come from? And how did the product get here?
Gabrielle Mitchell is a bluenotes contributor
The story originally appeared on ANZ’s Small Business Hub.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
05 Aug 2016
21 Sep 2017