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Insights from Online Retailer 2017 – Day 2

Is Amazon a friend or foe? That was the question UBS analyst Ben Gilbert posed to a panel of e-commerce leaders on the second day of the Online Retailer conference in Sydney.

Mirella Sago, general manager of Styletread, Mark Coulter, co-founder of Temple & Webster, Paul Kennedy, CIO of GreenCross (Petbarn) and Simon Clarkson, managing director of ChannelAdvisor, came down on the side of both.

Coulter reminded the audience that Temple & Webster has been selling through Ebay for some time, and to some degree, Amazon is just another marketplace. However, he did acknowledge that retailers selling on Amazon have reason to be concerned about competition from the e-commerce giant itself.

For her part, Sago said Amazon will raise the bar for satisfying the customer on delivery and returns, which she thinks is a good thing.

Kennedy said retailers that offer something – either a product or service – beyond commodity products will be in a better position to retain customers, pointing out that Amazon is unlikely to start offering veterinary services as Greencross does.

“Everyone in market needs to be thinking about achieving a reasonable proposition. You can’t out-Amazon Amazon,” Coulter said.

The next generation of retail: Voice

Robin Li, vice president of GGV Capital, a venture capital company with a focus on digital disruptors in the US and China, said leading retailers are merging online and offline commerce in new ways.

She pointed to Bingo Box, a fully automated convenience store in China that lets customers pick up items and leave, without having to check out. The store simply charges the items to their WeChat account, which they scan upon entering.

It’s similar to the Amazon Go store in the US, but has been around longer. Li suggested that retailers in the US are looking to China for ideas about where the future of retail is heading, and retailers in China are looking to Japan.

One trend that’s gaining traction in the US today is voice.

“If you look at Alexa, Google Home…voice has no clear winner yet. No one knows what that looks like, how to make it easier for the shopper,” she said.

Turning stores into DCs

Later in the day, Peter Ratcliffe, head of digital at Retail Apparel Group (RAG), Kate Morris, CEO and founder of Adore Beauty and Heath Tulley, e-commerce director at The Body Shop, discussed the future of bricks-and-mortar stores in retail.

With 405 physical stores across Australia, RAG, which owns the Tarocash, yd., Connor, Johnny Bigg and Rockwear brands, doesn’t see bricks-and-mortar retail waning, Ratcliffe said.

He said stores should cater for every customer, including those who go in-store and order online and those who order online and pick-up items in-store. He added that RAG is looking to turn more stores into distribution centres. 

“Store staff are trained that [click and collect] is an up-sell model. But it’s also about convenience to the customer…Turning stores into DCs will be regional based…If we can use a Perth store as a DC, they can get products next day,” he said.

Tulley said turning stores into distribution centres is a good way to utilise retail staff when stores aren’t busy – such as in the morning.

“[The Body Shop’s] office is right next to our Chadstone store, and you see the staff sitting around [at times]. It’s a wasted opportunity. Maximising the assets we’ve got is definitely the avenue we want to take,” he said.

Morris, however, pointed out that the in-store experience isn’t always positive for consumers, and it’s important to go where the customers are.

“Stores are essentially a marketing tool, and hopefully they’re revenue positive,” she said, citing a report from Scott Galloway of L2. 

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