Had Napoleon been living today, he would probably refer to Malta as being a “nation of shopkeepers” rather than Britain. The island is peppered with retail outlets ranging from poky shops practically in every street of our towns and villages to modern supermarkets selling a decent range of goods as can be found in much bigger shopping districts in Europe. So why are our retailers so glum about the future of their business?
Valletta is no longer the Mecca for local shoppers who prefer the Sliema area for their shopping sprees- John Cassar White
Valletta is no longer the Mecca for local shoppers who prefer the Sliema area for their shopping sprees. Transport problems as well as lack of parking facilities and continuous and disruptive building works are an undeniable source of irritation for the business community in Valletta. The flow of tourists in our capital is not sufficient to compensate for the fall in local shoppers. But the decline in retail business can be explained more convincingly by other developments.
Most Maltese retailers underestimate the long-term effects of technology on their businesses. While local banks have been quick to embrace electronic commerce and now offer electronic banking services similar to those of the most advanced banks in Europe and the US, local retailers have only embraced technology half-heartedly. They also seem to want to preserve the antiquated rules that regulate opening hours for their shops and expect the consumers to accept this without complaining too much. To survive, our retailers must invest more in clicks, and less in bricks. I recently spent time reviewing the sites of car dealers in Malta. I was impressed how most of these sites are unattractive, often contain outdated information, and lack the sort of details that a prospective car buyer looks for – like price and detailed specifications of cars being sold. A visit to a number of car showrooms was similarly disappointing from the consumer’s perspective. In one showroom I had to wait for 10 minutes before a grumpy salesman appeared. In another the literature available was decidedly tatty, while in another showroom the sales consultant was a top notch salesperson who immediately inspired confidence in the prospective buyers in his showroom.
If our retailers want to achieve the right balance between “clicks and bricks” in their sales strategy, they need to promote online sales more aggressively. A business having a website does not necessary mean that it has embraced electronic commerce. In the more advanced economies young people do about a quarter of their shopping online. Our young people may not be doing as much online shopping but this is probably because the infrastructure for the delivery of goods from foreign retailers is still underdeveloped.
Once an entrepreneur with some money and large amounts of imagination offers a reliable and reasonably priced transport service from major business centres in the UK, Italy, the US and China, then local shoppers won’t just buy CDs, books and computer gadgets from e-Bay and Amazon, but also flat screen TVs, furniture and possibly also new cars.
Parallel trading has brought down the artificial barriers that made the life for local agents artificially cosy and life for consumers irritatingly uncomfortable. Those retailers who want the good old days of booming business to return must “invest in online business facilities that integrate seamlessly with their bricks-and-mortar operations”. Very few local retailers have so far managed to get anywhere near this winning strategy.
Some businesses will, of course, continue to operate in the traditional way by selling goods through their retail outlets. Retail therapy for most people still consists of spending hours trying on different shoes, even if this exercise can be most frustrating for anyone accompanying such type of shopper. Similarly there will always be many who cannot resist browsing in budget shops to find an item that will serve them well for a ridiculously low price. For such businesses the challenge is to make their stores a pleasant experience for consumers.
But today’s cost-conscious consumers have less time to waste travelling by car through depressing traffic jams to and from our shopping centres with the accompanying frustration of non-existent parking spaces. So retailers who offer a convenient, reasonably priced and reliable e-commerce service will win the support and wallet share of these consumers.
The electronic payment infrastructure is in place and today the issue of payment security for online shoppers is no longer a major concern. The next big step that is needed is a change in the mindset of retailers who need to adopt effective clicks and bricks strategies.
johncassarwhite@yahoo.com