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Will the Retailers Win This Year


Has the New Retail arrived? Has eCommerce merged with bricks and Mortar retail? Its February 2014, and a wonderful time to be alive and relishing in the collaborative technologies that have evolved from the internet and the world wide web.


Cloud technology and open source technology has enabled smaller business to compete with mammoth enterprises. These Cloud and open source technologies have allowed smaller businesses with cash restraints to leverage more powerful technologies without the costs of development from the ground up. No need for internal virtual private networks (VPN’s) and internal IT infrastructures including servers, modems, computer hardware.

Compare the landscape to February 2009, when launched and things were very different. Magento, an online department store shopping cart platform that is available as a free open source solution via its community edition and options for paid enterprise support, was a fledgling start-up barely a year old, but for those in the know, it was originally called Bento, and a clumsy beast in its early iteration, and virtually unknown. There were other options such as OS Commerce, however they were not feature rich. Integration of warehousing and inventory control was also a luxury of the privileged, who could afford the cost of Enterprise Resource Planning (ERP) systems and the added cost of cross platform data integration.

Move forward to 2014 and Magento is a thriving platform enabling many of Australia’s smaller as well as enterprise websites. and Harvey Norman come to mind.

ERP systems have also become more affordable with Australian developed systems such as Qdos offering accounting, full inventory control and warehousing fully hosted in Australia integrated to Magento (and other web sites) via an application programming interface (API). At a slightly higher price Netsuite an American product provides a similar offering out of the USA. As these cloud based solutions are effectively service providers, they have dented business growth of traditional server based ERP systems by offering their product as a monthly subscription fee. Other less sophisticated accounting packages that offer basic inventory control such as Xero, Saasu and MYOB and cloud based linking platforms such as Saaslink and allow small business to link various cloud components together to patch together a kind of enterprise system at a budget unheard of in the past.

But, despite all these wonderful technological wonders, how are things in the world of retail fairing at the moment?

In my work as an ecommerce optimisation, integration and change management consultant, I have noticed that commoditised businesses, i.e. businesses such as online department stores are finding it a lot tougher to stay relevant in a market where vicious price competition on appliances and mass produced consumer goods is resulting in a lot of excess unsold stock. Online retailers are unable to turn this stock over even at reduced prices after all how many juicers can each household own?

The glut of consumer goods available for sale, by example appliances is also partly related to the slowdown in first home buyers amongst other things. At the end of 2013 Euromonitor produced a research paper indicating that Whitegoods brands Dishlex and Simpson, which are generally strong sellers to first home buyers are struggling to find customers as the number of first time homebuyers on a budget has dried up. Interestingly, brands such as Bosch and Miele are seeing increases in sales of Whitegoods as older cheaper equipment in homes are starting to age and fail. Completely contra to this, higher quality European brand household appliances such as toasters, juicers, kettles are losing market share to cheaper no name brand or lower quality Chinese made and branded toasters, kettles etc, finished off in flashy stainless steel, and there is a deluge of cheap imports online and in store across the country.

In my opinion things are changing in favour of established bricks and mortar businesses. For those retailers that have invested in cross channel technology, and are able to offer online ordering and pick up in store (click and collect), and can accept returns of online purchases in store, great customer service etc. and offer a full 360 degree marketing approach with the intent of achieving omni channel or near omni channel relevance, the game has changed.

In 2010 businesses such as, and began to disrupt retailing, and were seen as darlings to the investor community and the public loved the disruption. has recently listed on the ASX and I would assume is on an acquisition trail to add members to its database to keep investor confidence up. was bought out by GraysOnline, and although active has not made any noise. has quietly bid farewell to its C level management team, and bought back some of its shares from the consortium of investors that originally ploughed $80 million into the Catch group. Are these subtle signs the Halcyon days are over for these dynamic upstarts as the national giants get comfortable with the technology and take over dominance of the overall retail space. Big W, Officeworks, and Dick Smith come to mind here. Converse to this, discussions recently with the owners of niche online businesses, and at a dinner hosted by Reed Exhibitions recently pointed out that their niche businesses are faring very well at the moment. It seems the old rule of thumb of niche focus is evident here. Paul Greenberg, CEO of the National Online Retailers Association (NORA) has been quite vocal for some time that there is no such thing as online versus offline retail, rather a multitude of channels which have been enhanced by the introduction of online retail as just another channel. Greenberg refers to this as “the new retail”

My comments are purely a collection of observations. Since 2005, every observation and prediction I have made relating to online retailing has come to fruition. Let’s see in 12 months time (almost 60 months in internet time) if I am still correct.

I also recommend an article posted on in the UK – High street rises again as consumer demand redraws the retail map

Mark Freidin Google +

About the author :Mark Freidin is the Co- Founder of, and is a consultant and an advisor. He can be reached HERE

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