Is the retail sector insane?

Is the retail sector insane?

Albert Einstein once said the definition of insanity is doing the same thing over and over again and expecting different results. Does this mean the retail sector is insane?

B&T Magazine
Posted by B&T Magazine

With post-Christmas sales been and gone most retailers felt little joy from the cash register this holiday season. This comes hot on the heels of Clickfrenzy, the much hyped online shopping sale that left many retailers angry and disappointed, potentially setting back e-commerce in Australia by several years.

Online shopping, which grew by 25% in the last year, the strong dollar and slow recovering consumer confidence have combined in a perfect storm for pureplay in-store retailers. Yet with so much going against them, most retailers are soldiering on, business as usual, despite indications that consumers want more.

From the emergence of pop-up culture, to branded experiences, sustainability and the ubiquity and convergence of mobile devices, today’s consumers bear little resemblance to those a few short years ago.

Consumer behaviour and expectations have changed considerably. With the convenience and seemingly infinite choice afforded by the Internet, the reasons for shopping in-store are becoming fewer and farther between.

While it is clear, from the hordes of consumers converging at shopping centres across the country on Boxing Day, that we Australians like nothing better than to get out and browse, being busy doesn’t necessarily translate into sales.

In a recent study conducted by Square Holes market research on behalf of NoQ, eight in 10 shoppers said they would walk away from a sale to avoid waiting in line. So even when it comes to convenience and immediacy, two of the last remaining ‘advantages’ of buying in-store, retailers are beginning to lose ground especially as services such as Want It Now and The Iconic’s three hour same day delivery become more common.

While major brands such as Tesco, Adidas and Telstra are using technology to create innovative experiences to drive more traffic in-store, the problem is not how to get more people there it’s how to convert them better.

Knowledge and expertise is no longer a competitive advantage, especially considering how the combination of Google and a smartphone puts that information in the hands of the customer, empowering them like never before.

Relying heavily and regularly on endless discounts and promotions can do more harm than good in the long run (unless that’s your brand) with consumer interest moving away from these traditional tactics that were previously relied upon to drive sales.

In-store choice is also no longer a factor when anything you want can be found on Amazon at the click of a few buttons.

Which brings us back to convenience and the progression of mobile technology presents in-store retailers with an opportunity to create better purchasing experiences that align with the increasingly busy lifestyles of consumers by empowering them to use the technology already in their pocket.

Starbucks continues to be the poster child for retail innovation, creating mobile experiences that make buying from them easier, while the Domino’s app makes ordering pizza intuitive and, dare I say, fun while helping to ease congestion and shorten waiting times in-store.

Put simply, it’s becoming evident that mobile will be the next frontier. Consumers aren’t just using their phones to make a call -they’re incorporating them into every aspect of their lives.

With technology now commonplace and barriers to entry dropping by the day, the time is now for retailers to drop the insanity and shift their thinking by embracing the endless possibilities right at our fingertips.

Brad Moran is the Founder and CEO of mobile commerce platform NoQ