Why physical retailers still have the upper hand
September 22, 2014 at 2:46 PM
Written by Vaughan Reed
What many traditional retailers fail to see is that the only thing standing between them and getting the upper hand on their virtual online counterparts is technology, and embracing what it can add to a customer's total retail experience.
The battle between traditional brick and mortar stores vs. the growing number of virtual online retailers (e-tailers) has been raging on through the media for several months now. First there was the push to charge GST on items purchased from offshore websites in an effort to level the playing field between offshore e-tailers and our local retailers who immediately have to add 15 per cent to their baseline cost.
Then we were hit with news of a potential merger between the David Jones and Myers department stores due to their inability to effectively tackle the dotcom era of online retailing. Should the merger go ahead it will likely cut operating costs by effectively halving the number of stores. It will no doubt also improve their collective buying power, but unless they adapt and compete head on with e-tailers they are only delaying the inevitable.
The point is that what many physical retailers fail to see is that the only thing standing between them and getting the upper hand on their online counterparts is technology and embracing what it can add to the total retail experience.
"76 per cent of shopping decisions are made in- store"
Simply adding an online sales channel to an existing physical outlet store(s) is not going to cut-it, as this is now a given. Adapting is really about integrating the virtual and in-store channels to deliver a consistently unbeatable customer experience; one that only retailers with physical stores can deliver.
It's marketing 101, but most consumer purchasing decisions are driven by emotion (the experience) more so than by logical reasoning (the price). Not convinced? According to the Point of Purchase Advertising International (POPAI), 76 per cent of shopping decisions are made in- store. Meaning that physical retailers are in a better position to tap into these emotional triggers. The question is how?
In-store touch screen kiosks have been touted as the next big thing to hit retail for some time now, but until recently they were big ticket items, out of reach to most retailers. The original models were also self-contained standalone devices that were unable to connect to a website or point of sale system. Technology has finally caught-up with the hype and touch screen kiosks are now viable solutions for retailers, which facilitate a merge between the virtual and physical retail channels.