The pain inflicted on retail by sporadic lockdowns has taken on a silver lining. Far from sounding a death knell for the bricks and mortar side of the industry, the pandemic has only whetted our appetite for physical retail experiences. Ongoing social restrictions may have driven more of us to online shopping than ever before, yet consumer surveys consistently show we are hankering for the real deal.
This time around though retail is evolving into a multi-faceted pursuit – a blend of online and in-store experiences. Research both here and overseas indicates retailers everywhere now need to deliver far richer online offerings than simple websites and online catalogues. Instead, winners in the post-covid retail space will be those with the most seamless marketing strategies spanning multiple digital and social media channels that combined with the pleasantries of physical in-store shopping.
Retailers should be aiming to provide the smoothest and most streamlined “omnichannel” shopping experience possible said Brian Walker, CEO and founder of consumer and retail consultancy Retail Doctor Group. This however is often easier said than done. “Customers now want and demand a seamless 24/7 experience from their retailers of choice,” Mr Walker says. “But we find some retailers think that building omnichannel capability is like adding a room to the house when it’s rather like rewiring the house.”
Success boils down to implementing the right IT systems, Mr Walker says, systems that can support integration of ecommerce platforms, orders and inventory. “Retailers need to consider that getting the consumer experience right actually starts with the architecture of their back-end systems,” Mr Walker says.
A need to connect
A well-executed omnichannel digital strategy will go hand in hand with welcoming consumers back to stores according to global trend forecaster Foresight Factory. Its extensive survey of 20,000 consumers worldwide including 1500 Australians revealed the surge in online shopping has done nothing to dull desire to see and feel goods, speak to salespeople and try on clothes. Consumers instead are craving the social and tactile side of retail after being denied such luxuries during months of stay-at-home orders, shutdowns and social distancing, according to the research.
Furthermore, a retailer’s success will become increasingly reliant on how well they meet consumer desire for ‘connected shopping’ – a term coined by Foresight Factory to describe the merging of online and in-store shopping via digital and social media.
Other findings were:
- We love our phones - 40 per cent of Australian consumers never go shopping without their mobile. While in store, shoppers like to jump on their mobiles to compare prices, phone a friend and share photos for an opinion. Among general consumers generally, one in 5 reported doing so, and among Gen Zs and millennials it rises to 3 in 10. “With this level of mobile traffic in physical retail environments, it is clear there are opportunities for retailers to capitalise on this behaviour and keep shoppers within their brand ecosystem when using their mobiles in store,” Foresight Factory’s report states. What’s more, mobile is already the preferred channel for 34 per cent of global consumers when shopping for products, second to shopping in-store at 43 per cent. Mobile also ranks ahead of PCs for online shopping by just over 20 per cent.
- Seeing is believing, with four in 10 consumers saying that not being able to see, touch and try out items are the most significant factors that put them off online shopping
- We like to keep it real: 44 per cent of those who have used augmented reality (AR) when shopping online said it encouraged them to buy.
- Better results are possible: 31 per cent of online returns potentially could be avoided by using AR technology to try on items according to the report.
Australia developed an army of online retail fans during the pandemic: an Australian Consumer and Competition Commission (ACCC) issue paper examining the online retail marketplace shows online purchasing in 2020 grew 57 per cent year-on-year. In 2020 Australians spent a record $50.46 billion online – a dramatic leap from the $27.5 billion spent in 2018. Each month, more than 12 million of us visit the country’s largest digital marketplaces – including ebay Australia, Amazon Australia, catch.com.au and Kogan - to either shop or sell goods.
Digital in-store experiences
Australian researchers also point to rising demand for well-rounded retail experiences. A joint report from business software provider Salesforce and peak industry group the Australian Retailers Association found just under three quarters of consumers (69 per cent) want digital versions of their chosen in-store retailers. The report, The reinvention of the retail experience also revealed consumers want personalised online experiences, ones that made them feel recognised with offers relevant to their needs and delivered with the same kinds of attention and service as in-store.
Encouragingly, the majority of retailers are rising to the challenge to “meet them (consumers) where they are” the Australian retail report states. Almost three-quarters of business-to-consumer organisations now offer live chat or video experiences; 58 per cent use virtual events like Instagram Live, and 53 per cent provide virtual shopping or stylist appointments.
The research findings are encouraging news at a time when latest lockdowns push retail vacancy rates to new highs and online buying continues accelerating at a rate of knots. NAB’s monthly online retail sales index shows, in year-on-year terms, that online shopping in June soared to levels 18.1 per cent higher than those recorded 12 months ago. Meanwhile retail vacancy rates across Australia’s CBDs have risen to almost 13 per cent, according to CBRE. Last month Sydney CBD recorded vacancy rates of 8.3 per cent compared to just 3.7 per cent in the previous corresponding period to June 2019. Brisbane sits at 12.7 per cent, Melbourne (12.8 per cent) and Adelaide 13.3 per cent.
NSW Treasury estimates the current shutdown will cost the NSW economy $2.5 billion, while the Australian Retailers Association estimates lockdown will cost the retail sector about $3 billion in lost trade.
Want to voice your views to the government on digital marketplaces?
Here is your chance: The Australian Competition and Consumer Commission (ACCC) is inviting consumers to share experiences and views on general online retail marketplaces by participating in a survey open now until August 19 2021. “General online retail marketplaces” are those which facilitate the supply of general goods between suppliers and Australian consumers, such as ebay Australia, Amazon Australia, catch.com.au and Kogan. A separate questionnaire is available for businesses that sell goods online using retail marketplaces.
See Survey for consumers - General online retail marketplaces - Australian Competition and Consumer Commission - Citizen Space (accc.gov.au)