How Retailers need to Adapt

Speaking about online shopping with people in retail only few years ago would reveal disbelief and some contempt. The believe was that people would prefer to go to the shop, see the product, touch it, buy and take it with them. This online thing was considered overrated and would never work. Well, things have changed and today, in 2017, retailers are worried and rightly so. According to a recent report by The Nielsen Company, some 93% of people globally have shopped online. Today, for many retailers, it is not enough to have a brick and mortar shop. It must be both a physical shop and an online shop. Retailers need to adapt to the changed consumer behaviour.

What has changed is how people access and use the internet. There are 3.5 billion people using the internet and 2.6 billion using internet connected smartphones. This will only increase in the coming years. One source even estimates that 6.1 billion smartphones will be in use by 2020.

It is not only that most people on earth will have a smartphone and access to the internet. The real change is in people’s behaviour. People are getting used to opening a browser and type in what they are looking for or asking questions. The emergence of smartphone assistants such as Apple Siri, Microsoft Cortana, and Google Assistant, devices such as Amazon Echo and Google Home are just fuelling this trend. If not that, platforms like Facebook, Snapchat and others bring flood of new ideas and products before people. As more and more sites are offering products online with a seamless and convenient experience and product delivery, more people are starting to trust online as a way to purchase products. It is becoming a livestyle to get stuff by by online ordering.

Then what about retailers. How will the adopt to this change? Here is what retailers need to do. First thing is to realise that local shopping has huge advantage. Local shopping meaning retailer in your neighbourhood or city. While big companies like Amazon have a huge selection of products, they are still a global company. That might change, but local retailers have advantage of the closeness to the customer. And in case something goes wrong, the customer can always drop by.

Second, retailers need to be visual online. The online presence needs to be complete with product descriptions and pictures, providing a great experience. And it needs to be findable. With 81% of shoppers starting a purchase by an online browser search, those that don’t get on the first page are not visible. Those with no online presence simply do not exist. The better and more convenient the online shopping experience, the higher the chance of the shopper completing the purchase. The goal must be to minimise any barrier to shop and that includes filling out complex forms. Being online not only drives online shopping, it actually drive consumer visits. One study found that 50% of consumers that search for product will visit the store that comes up.

Third, delivery logistics must be fast and convenient. The companies that manage to build up good sales through online channels have realised that fast service is key to repeat business. If you think about the customer first, giving a choice for when products are delivered is crucial. Customers that want delivery within an hour should have that choice. If they want a product between 3 and 4 this afternoon, they should be allowed to select that specific delivery time. Retailers should optimise their processes around the customer first, and then optimise them for themselves.

Fourth, transparency is important. We live in real-time world with small messages flowing all the time. When an order is placed, a message should go to the customer. Also, when the order is packaged, ready for delivery, in transit, and so on. The millennials generation expects these information pulses to come all the time. They are not a nuisance, but bits of info that keep you up to date of what is relevant to you at the moment.

Online shopping is becoming mainstream and retailers must accept that. It is important to realise that this is not the battle of online vs. offline or about offline finding ways to survive. It is about having both. Retail is not going away, it is partly shifting as the customers adopt new ways to shop. Retailers that only focus on offline are risking loosing part of their sales while still supporting expensive store space. Retailer of brick and mortar stores that offer online shopping in the right way, will likely be the winners.

 

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