An expert panel, summoned to assess the state of the retail market, has revealed that Australian retailers are retaliating against international internet competitors with innovative new strategies.
The panel, which met in Sydney last week, was moderated by research firm Frost & Sullivan's senior research manager, Australia & New Zealand, Phil Harpur.
Participants included a number of retail solutions vendors, such as: Meridian Systems Asia Pacific regional manager Chris Petersen, Dassault Systèmes product lifecycle management value solutions Australia & New Zealand director Christian Ebel, and Island Pacific Australia sales & marketing manager David Tyc.
The meeting, which centred on a recent report by PWC/ Frost & Sullivan, revealed that Australian online shopping expenditure is expected to grow from $16 billion in 2012 to $26.9 billion by 2016.
According to the research, much of the growth will be fuelled by the entry of new online retailers and product manufacturers selling direct to the consumer, and by an expansion in the range of products and services on offer among existing online operators. Currently, around 45 per cent of all online retail expenditure goes to overseas sites.
However, discussions by the panel also indicated that although in the past the retail sector has tended to adopt a cautious approach towards technology investment, there has been growing interest among retailers of all sizes within the past 12 months to dive in and innovate.
Panel participants said that from initial building design to store layout and omni-channel services, retailers are finding new ways to maximise revenue, with whole-of-life technology strategies designed to increase the value of physical floor space, boost margins and deliver omni-channel customer service.
The panel also noted that as retailers redevelop their online presence, many will use the chance to rewrite their technology strategies and to improve top and bottom lines by introducing more efficient tools and processes.
Petersen of Meridian Systems said in
particular, retailers are now beginning to think about how to
integrate omni-channel from the moment the physical store is being
built.
“The technology opportunity begins with the store's
physical presence. It should be a positive differentiator,
complementing the online presence by driving increased customers
visits and improving revenue. Before even beginning construction,
however, developers and retailers should be thinking about how the
flow within any given physical space will work and what this will
mean for the consumer experience.
"This is already commonly done in
the residential real estate market using virtual walk through and 3D
imaging technologies and we are now starting to see the practice
among retail developers who want to maximise their dollar per square
metre,” he said.
Tyc added that web-based applications are
also becoming popular as a tool for coordinating the multi-national
or multi-site nature of retail businesses, such as during the stages
from product design through to manufacture.
In the process, the applications are
generating valuable digital assets such as designs and shop floor
layouts that over time can be re-used to enhance the retailer's
online presence.
“In terms of technology, retail has come
out of its infancy and is now going through the exuberant teenage
years. Companies are trying all sorts of new things with varying
degrees of success,” he said.
“The one note of caution that every
retailer needs to keep in mind is that the use of technology must
always come back to commercial reality. It has to be commercially
sustainable, putting dollars on the top and bottom lines.”
The
PWC/Frost & Sullivan survey of 1,000 Australian consumers, also
found that 29 per cent of all online shoppers in Australia currently
follow an online shopping site on Facebook.
Thirty-four per cent of online shoppers have done so using a mobile phone or smart phone. Half of all Australian online shoppers who currently own a smartphone have used their phone to find a nearby store and just over one-third have used it to compare prices before shopping for items.
According to Harpur, this is a trend that will continue, leaving retailers no choice but to push on ahead.
“The pressure that has been placed on the traditional bricks and mortar retail model over the last year or two is only going to increase especially as more overseas online retailers target our local market," he said.
"It is therefore essential that local retailers put in place some of these strategies in place now to combat this threat and position themselves for future growth."