There’s no denying that online shopping is growing at a rapid pace in Australia – just to give you an idea of the scale, in the 12 months to September 2016 Australians spent an estimated $20.8 billion on retail purchases online. If you’re thinking that’s a lot of shoes you’d be correct. But the good news is that $20.8 billion spent online is the equivalent to around 7% of the traditional bricks and mortar retail sector - so whilst online shopping is growing at a fast pace, it is by no means panic stations for traditional retail stores just yet.

And there are many ways that bricks and mortar retailers can combat the online trend…
How will bricks and mortar retailers combat the online shopping boom in Australia?

1) Have a strong online presence

My recommendations to my retail clients has been to firstly establish whether they can sell online in addition to their shopfront location, thus using an online sales model to compliment their existing shop, and allowing them to compete with the online only retailers. 

However if you can’t sell online then it is still vitally important to maintain a strong presence online to engage customers and entice them into the store. Often people are browsing online in the research phase of their purchase, so every retailer needs a strategy to be found online fast, to bring customers instore to make the purchase. This online strategy will usually include search marketing such as google adwords, as well as re-marketing ads and digital display ads to continue to remind customers about your product.

2) Be competitive

Technology can work in two ways – smartphones allow people to search for a lower price online whilst they are standing in a store looking at a product, which can be frustrating for the retailer whose store they are in. However the far greater majority of people will research online about products and then go in store to touch and feel before purchasing.   So make sure you a priced competitively to get your customers spending their money at your till.

One thing that comparing products online has done is lead to an increase in the retail philosophy of “price matching” whereby stores will beat any price quoted “apples for apples” in most cases including the delivery price. This tactic was made famous by Bunnings Warehouse offering “We’ll match any competitor price and beat it by 10%” and can only be a good thing for consumers, as well as keeping everyone honest. 

If being price competitive doesn’t work for you, then you’d better have a really good point of difference in service or experience to make up for it – which leads me to my next point.

3) Use new technology to interact with customers instore

With the rise in omnichannel marketing and big data, the technology available to retailers is creating a daring new world, one where shoppers can do everything from trying on clothes in a virtual world, to shopping and purchasing using just their eyes in a Virtual Reality headset. 

Recently New Balance did just that with their new Heidi Klum range launch in Australia, with shoppers being able to try on clothes ‘virtually ’in front of an interactive screen. These virtual change rooms were developed by Val Morgan and allowed customers to try on the entire range interactively, with no changing required, and created a fun and engaging retail experience for shoppers that many had never seen before.

Loreal and Priceline pharmacies have also had great success with Loreal’s ‘makeup genius’ app, where customers can try on makeup ‘virtually’ using their phone, simply scanning any Loreal product through the app, and seeing what the product would look like. The app has another key feature allowing customers to simply click and buy the product at Priceline directly from the app – so even if they are in a different location Priceline will still get the sale! Clever.

Another way for retailers to capitalise on new technology is to allow customers to interact with them online within the bricks and mortar location, to find out what is happening around them, information about new products, promotions and specials, and create bespoke shopping experiences.

It’s important for retailers to remember though, there is no point creating VR just for the sake of it – the point is to connect and engage your customers in a way that elicits emotion, and makes them feel excitement and joy in the brand. Think first then do – rather than use technology for technologies sake.

The Verdict? 

People will always want to walk around stores and window shop, meander, try things on and stop for a coffee, so bricks and mortar stores will never disappear. The mix of online and bricks and mortar retailing will continue to evolve together… however with online shopping gaining a greater percentage of the mix over time. Retailers need to be on top of the technology available to them to stay relevant and stay in the game, be competitive on price or have a stand out point of difference, and have a strong online presence to help customers find them.

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Lisa O'Keeffe

Lisa O'Keeffe has 20 years’ experience in retail marketing in Australia. She has worked extensively developing marketing strategies and implementing campaigns across multiple marketing disciplines.  Initially establishing her retail expertise as Advertising Manager for Bunnings Warehouse, Lisa then formed her own successful marketing company, providing marketing strategies for over 100 retail businesses.

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