The international research firm Forrester estimates that e-commerce in the United States accounts for circa $200 billion in revenue and represents about 10 per cent of total retail sales. Globally, digital retailing is headed toward 15-20 per cent of total global sales. My point: e-commerce is becoming mainstream and is set to change the retail landscape in Malta.
E-commerce in the United States accounts for circa $200 billion in revenue and represents about 10 per cent of total retail sales- Kevin-James Fenech
In my previous article (January 5, 2012) I had said: “I predict the continuing demise of retail shopping and the growing disruptive influence of new entrants who embrace technology such as m-commerce, e-marketing and e-commerce.” By this I meant the “continuing demise” of retail shopping in its traditional, in-store, physical sense.
Retailing per se has a bright future but it will be fused and intermixed with digital retailing. That is to say, digital retailing will compliment rather than compete with physical stores. It already is very difficult to measure e-commerce anyway; I mean if a person product-searches online, then tries the product at the physical store but buys it online; does this qualify as an in-store sale or an e-sale? Similarly, if a customer is in a physical store, uses his/her smart phone to find a lower price elsewhere (Malta now has pricecomparemalta.com.mt), orders (or books) it online but then collects the product from a store (or even has it delivered home); what is that? It doesn’t really matter; I think you get my point. Digital and in-store retailing are becoming one and retailers just need to recognise this trend and make necessary e-investments in order to update their customer value proposition (CVP).
Do you realise that 50 per cent of store sales are influenced by digital (online) information or that the latest business research shows that physical stores actually boost online sales? Leading retailers are now referring to this new phenomenon as “omnichannel retailing”. The concept is that retail businesses integrate all the disparate channels that affect them (websites, social media sites, blogs, forums, price comparison, product comparison, smart phone apps, TVs and more) into a “single seamless omnichannel experience”.
Let’s face it: there are huge advantages to buying online e.g. a huge selection of products, rich product information, customer reviews & tips, social engagement and two-way dialogue, convenience of purchase and low price(s). But there are also some very attractive advantages when buying from a physical store e.g. the ability to try, test and experience the product, personal assistance and let’s not forget (or underestimate), the most obvious, you get the “real” shopping experience. Hence, by integrating the best of both worlds – and that’s why they’re calling it “omnichannel retailing” – you the retailer stand a very good chance of satisfying your customers profitably.
Do any retail outlets or chain of outlets engage with their customers in this manner? I don’t think so and if they do it is limited. It is no good, for instance, if your website is just a brochure site. Your website needs to be at the very heart of the customer experience you are offering. Customers need to be able to product search (price, availability or description) online and book or buy through their tablet or smart phone. Your website must be part-and-parcel of the customer experience on offer.
Are you aware that there is such a thing as “mobile check-out” or “scan-as-you-go” technology? Abroad, supermarket chains are starting to offer customers the opportunity to scan their own shopping and check out without the need to queue up and wait to be served by a cash register assistant. Through technology these supermarket chains are improving the customer experience by reducing wait-time (no need to wait in queue for a person to scan your products) and reducing their own fixed costs (less need for cash register persons manning the bar code scanners and cash registers).
And for those of you shouting “but what about theft” (can we trust the customer to scan all items?) research indicates that losses, from theft (or e-shoplifting if you like), is the same or marginally less than losses resulting from cash register employees’ errors plus there are ways and means of monitoring.
The future of retailing, I suspect, is customers being able to download apps for their smart phone, empowering them to “scan and pay” for products through their smart phone; a digital wallet. The future of retailing is smart phone enabled product demonstration videos. The future of retailing is fitting room cameras with 360 views. The future of retailing is cashless payments and electronic receipts. The future of retailing is a customer experience that ebbs and flows from the e-world to the real world seamlessly.
If you are in retailing, don’t worry about competition from e-commerce; just invest in enhancing your customer experience and embrace modern technology. It is out there (already available) and just needs some creative / imaginative entrepreneurs to introduce it to Malta.
www.fenci.eu
Mr Fenech is managing director of Fenci Consulting.