Not a day seems to pass without the media discussing the growth in online commerce and the impact it is having on existing businesses. Of course, Amazon is leading the way, especially as the retailing behemoth launched its Australian operation in December last year, but this is just the tip of a multi-billion-dollar iceberg that was estimated to surpass $US2 trillion worldwide in 2017.
With numbers like that and with predictions of those figures doubling by 2021(!), it’s not hard to see the fear and concern that online retailing is bringing to the existing marketplace of traditional retail.
How can retailers combat this emerging juggernaut and keep themselves in business? What strategies will help overcome the rising tide that suggests consumers are shifting their preferences away from bricks-and-mortar retail and towards online shopping outlets?
The first step is to realise that online retail is not just about shopping. Online giants such as Amazon are beginning to invest in bricks-and-mortar outlets themselves, which is a sure sign that they know the new retail war will be fought on more than one battlefield.
There are many ways that retailers can make themselves more competitive against online opposition, far too many to list here. Some of the better ideas are as follows.
Establish a niche
Before retailers fragmented themselves based on geography, their focus was on providing product that met the needs of people in their own suburbs or towns.
Now marketplaces are global, which means retailers must consider offering a select niche product to a larger audience – for example, ‘bohemian body accessories’ may not be currently in your store but plenty of people out there like them if the 21 million search results in Google is any indication. Choose a specialty that isn’t readily available in your area and become a destination retailer for that item.
Go online
Being online doesn’t mean having a Facebook page with 800 fans and a website that leads nowhere; it means being active in the internet space. Consider putting some serious effort into e-commerce and commit to building a following for your store.
Learn from online competition
Study the best of the e-tailers and watch how they operate. Amazon is the master at suggesting other items to buy when shoppers make purchases. This works for them so why not apply the same principles to your own business website and in-store shopping experience?
Treat the internet as a friend
An attitude change from traditional retailers is going to be half the battle. There is no point complaining about online retail as the stores are not going away anytime soon. Instead, think of ways to embrace e-commerce rather than reject or ignore it.
Don't become fixated
Healthy respect is important but retailers who spend all their time trying to catch online stores out for false advertising are failing to focus on their own offerings. Better to make sure your own store is performing well.
Don't underestimate them
Too many businesses can be guilty of believing they do it best and ignoring competitors as a result. Assuming you have the best products and best service is no guarantee of a great result even if you do indeed have these things.
Don't start a price war
Everyone knows online retailers have lower overheads and cut out the middle man. When your bricks-and-mortar competitors try and do that now, you don’t throw your pricing out the window so why would you do it in response to online competitors? Hold firm and promote quality, trust and service.
Always be flexible
If the internet has taught retailers anything, it has taught them how quickly change occurs. What worked last year may not work this year so retailers need to constantly adapt to the wants and needs of their customers.
A personal experience
The greatest strength of bricks-and-mortar retailers is the ability to personalise. There is no stronger experience than a face-to-face one. The internet has a harder job establishing loyalty so traditional retailers must build on the relationships they have with customers who already know and trust them.
As much as retailers complain about competition, the sector would be weaker without it. Competition boosts customer demand and gives the trade a benchmark for which to strive. Ask Muhammad Ali how he would have felt about boxing without Joe Frazier? Competitors bring out the best in the industry and make the game worth playing. Furthermore, they make victory taste that little bit sweeter.