Omnichannel tips for Australian brick and mortars

Internet Retailing

24th Aug 2016

Predictions of the demise of bricks and mortar retail have largely missed the mark. Not only are most retail transactions still completed in store, over 90 per cent in 2015, but there is also a growing trend of online-only retailers, such as Amazon, Warby Parker and Bonobos, opening physical stores to allow customers to experience their products in person.

The reality of the digital shift in retail is more subtle, with technology creating as many opportunities for bricks and mortar retailers to reach customers and increase sales as their online counterparts. This was the focus of the paper, “Technology in retail – from centre stage to supporting player,” that Deloitte published recently. It identifies the best approach for retailers to implement omnichannel strategies.

“Australian retailers are becoming wise to the challenges that e-commerce can bring, but are they aware of the opportunities that the same technology can also give them?” David White, national leader of Deloitte’s retail, wholesale and distribution group, asked. After all, 40 per cent of in-store visits were also influenced by digital in Australia in 2015.

“Instead of digital replacing physical channels for retail, a combination of channels is being used by shoppers. And successful bricks and mortar retailers have developed omnichannel initiatives to better synchronise their online and offline offerings,” White said.

According to the paper, the most effective retailers don’t make technology the focal point of the customer experience, but rather the infrastructure that enables it. “There is a big difference between truly integrating digital technology into the physical retail experience, and bolting it on as an afterthought,” said Deloitte spatial and brand experience leader, Robbie Robertson.

“Successful digital technology integrations in retail help the customer to save time and find what they are looking for. And on the other side, they help the retailer to understand their customers better and to track what’s working,” Robertson said.

“Most importantly, it won’t feel like an additional layer. It will be behind the scenes, or will integrate so seamlessly into the customer experience that they won’t notice the technology, only the positive outcomes,” he said.

The paper cited a 2015 article by TechCrunch which suggested three rules for adopting technology in retail:

1. The technology must help customers do what they came to the store to do, that is find and experience products.
2. The return on investment for the retailer must be crystal clear and compelling.
3. The experience must enhance the magic of a great real-world retail experience, without distracting.

Some bricks and mortar retailers are already using technology to enhance the customer experience, including Topshop, which has built virtual fitting rooms in many of its stores, and Blackmores, which lets shoppers at its Sydney retail location see their brain waves on a screen and observe how they change after meditating. Ikea’s physical catalogue allows customers to get a 360-degree-view of furniture layouts by scanning the image with their smartphones.

Increasingly, companies are springing up to help retailers develop and implement omnichannel initiatives. “We’re witnessing dozens of Australian startups take on the challenge of helping retailers to bridge the gap between digital and physical commerce, from shelf-stocking robots to beacons presenting customers with personalised special offers, virtual reality changing rooms to online training platforms for employees,” White said.

“Compared to their overseas competitors, Australian retailers will always find it hard to compete on size and scale. But no one understands better what Australian customers want than Australian retailers,” he said.

The Deloitte paper is the first in a series that will focus on trends in Australia’s retail landscape.