Newsflash: there’s no longer a retail status quo
Imagine that e-commerce is the primary method of shopping for Australians. It is the most common way for people to purchase their groceries, clothes and services. It has been for decades.
In the background, there has been a small but strong groundswell of retail businesses that are starting to use physical shops to sell their products. Slowly but surely, they are building shops and malls to house products for customers to purchase. They are banking on the fact that people will soon prefer to shop in person, rather than online. A young upstart named Terry Garvey leads this physical store movement.
Back on the other side, the most successful of the traditional e-commerce leaders, Seth Tevos, scoffs at the trend. He goes on a very public campaign to encourage government, businesses and consumers to support the current way of online shopping.
The media quotes Tevos as saying…
“So instead of pulling out their phone and having products delivered to their door, you’re expecting customers to find a store, drive there, select the goods and drive it home again? Tell me I don’t understand people but I can’t see it working.”
“Physical retail will never be profitable. It doesn’t make sense to fly products across the world, then out to individual stores across our wide nation in the hope that someone will walk into that exact store wanting that exact product. Plus, have you seen how much these guys pay to rent these stores and then fill them with people to look after customers in person? Sheesh! How does anyone make any money off that?”
“I don’t get why you would limit your opportunity. If you pick physical locations, you limit your audience to a small geographical radius. Why would you limit your potential audience to residents of Broken Hill when you have the opportunity to reach every Australian online? Heck, you can reach every citizen of the world!”
“Apparently people just walk into these shops. Pick a product up off the shelf. Pay for it with a credit card – and sometimes even cash – cash! Then they walk out. They have no visibility on who this customer is, how they got to their store or if they are likely to shop again. How do you build lifetime customers with that model!”
“This one store I went to had a sausage sizzle outside. I liked that. I’m not sure how we can create that experience online.”
Does Seth have a point?
It doesn’t really matter.
There’s a small but vocal minority of very successful traditional retail businesses in Australia lobbying hard to protect physical retail and denounce e-commerce as an unprofitable channel. It is an exercise in protecting the status quo. But as the above shows, the status quo argument could easily be flipped.
Imagine if the brilliant retail minds of Australia dedicated themselves to push Australian retail to the next level – in whatever form that takes for them.
The game isn’t a choice between physical and online retail. The game is retail. And it will continue to change. The opportunity lies in mixing it up in a way that best serves your customers and gives your business a competitive edge.
Find the model that works for you. Listen, experiment and adapt. Become a leader. But never go full defensive.
Nathan Bush is the founder of e-commerce consultancy at 12HIGH. He was previously group digital manager at Super Retail Group and was placed in the Top 50 People in E-commerce four years in a row.