Retail Basics Are So Yesterday
There are definitely times where I am listening to the radio, and I think, ‘That would be awesome. I would love to sing that.’ It’s this weird karaoke fantasy that I might someday get to live out on the big screen – Skylar Astin
Current Australian online retail sales are at circa $2.5bn and while growing at 15 per cent pa per year, they are however less than 9 per cent of the overall retail sales.
We have over 1,753 shopping centres in Australia alone with our best averaging well in advance of $20,000 per square metre.
So, over 90 per cent of retail is currently done in physical retail shops .
Why do I say this? Because I am slightly bemused by the death of physical retail dialogue that has permeated our mindsets in recent times. I get it though. Beacons, digital, customer experience, Apps, etc. are sexy and stock turn, sell through, measure by per square metre etc. are not.
The list continues; shops without stock, point of sale, cash, armed and enabled with retina scanners, holograms, virtual reality interfaces, augmented reality experiences, cyborgs greeting you as your long lost sibling, data mines predicting on Tuesday what time we will wake on the following Monday.
It’s retail star wars and of course, who could not be motivated by such a show of Orwellian entertainment (OMG it’s so exciting). Soon, if the pundits are right, our Amazonian experience will be technicolour, omnipotent and about the most exciting activity ever launched in real, augmented cyber specific time.
The industry this is spawning will be beside themselves – muttering enhanced customer experience as if the term customer experience never existed before a digital interface.
Now what is the reality?
People shop as a social activity and all our work in customer insights to implementation show this. Yes it’s ‘so today’ to be saying that we do all our shopping online now, yet the numbers don’t actually show this on average. In fact the very opposite is true, we are shopping at the physical environment increasingly in many cases, and certainly it remains at the heart of our experience of retail.
The retail strategy today is built on the retail ecosystem, solid strongly differentiated offerings, showcased with the physical and augmented with the virtual and social.
It’s focused on coverage, community, consistency and customisation.
But, the machine that is retail still needs investment, refinement, measurement and very skillful consistent practitioners.
Undifferentiated offerings, inconsistent customer service, poor measurement and shallow business understanding will do much more to determine a retailers future than digital investment could ever do.
An article on the mechanics of stock turn is nowhere as sexy as digital interfaces at the point of sale but is still if not more, crucially important.
Well, in our lifetimes anyway.
First published InsideRetail on May 3 2017