Katja Forbes
Aug 25, 2017 · 5 min read

How Retail Stores Can Survive the Online Shopping Tsunami in 2017

Last year saw the unexpected closure of multiple Australian retail franchises and chains across various industries, including children’s wear store Pumpkin Patch and hardware chain, Masters, among others.

Expert commentators speculated on what went wrong and what caused the rapid demise of seemingly prominent brands that appeared to boast strong customer bases and desirable product ranges. Anecdotal speculation cantered on internal belief within Pumpkin Patch that their brand was strong enough to withstand new players entering the Australian children’s wear market, and that they need not keep trend with changing fashion trends from offshore. Clearly, no expert is required to point out the faults with this very flawed way of thinking.

A more serious problem than offshore brands entering the Australian market is the competitive offering that online shopping provides. In fact, online shopping is a much greater formidable force to be reckoned with than any other bricks and mortar store from overseas. In order to properly identify the shift in consumer behaviour, it’s worthwhile to explore the trajectory that brought the commercial landscape to the point it has now reached.

Before the digital era, companies controlled the commercial landscape, rather than customers. Customers simply purchased what was available at the time, and typically had little say about their own specific preferences or actual needs. When a business decided to launch a new product, the whole process from conception to market was created entirely to the business itself. With little overall competition for similar products, companies had a good deal of time for preparation, development and quality control, before the gradual launch to market. Customers would learn about the newest product according to the business’ marketing department’s timeframe, and the message they received about each product didn’t deviate from the marketing spin. Obviously, social media was not available for consumers to share genuine opinions, ideas and feedback with one another, so everyone just had to take the business’ word for what they were buying (which was not at all biased, as you can well imagine!)

The scenario businesses face today is very different to the one described above. We all now operate in a truly connected, real-time, digital world, where business is expected to be more accessible and responsive to consumers. Trends and changes in the market occur very abruptly, almost entirely driven by customer demand. Companies are constantly racing their competitors to be the first to act on demand and to trend, creating new products and changing direction as many times as necessary, resulting in business managers tearing up their business plans (and their hair) in frustration.

So, where does this leave traditional “bricks and mortar” stores, and how they can compete against the more interactive and instantaneous environment of online shopping? The benefits of online shopping are apparent — they can more quickly adapt their product range according to demand, as many operate on drop ship arrangements and typically have fewer lines of stock in storage to sell or return. Secondly, online stores tend to offer customers an overwhelming library of information about each product listed. They can view specific product details: where it was made, customer testimonials, popularity ratings, comparisons to other similar products and more. However, a retail store will be far less likely to even offer a tenth of this information about each product to consumers. A price will be displayed, and other practical information can be found on the back of the box. This shopping experience can certainly be less rewarding and educational than purchasing online, where competitors’ products are accessible to compare with just a click (rather than a 20 minute walk or drive to find anohter store ).

The challenge for traditional stores this year and beyond will be to convincingly compete with online stores. Management of retail stores need to ask themselves what they can offer than is unique to the online shopping experience, and also how they can provides similar benefits to the advantages that attract shoppers online.

The first obvious answer is that the in-person experience has the potential to be vastly more rewarding than the online experience. Why? Because we are talking about human touch. In what ways can your staff make the shopping experience more meaningful and personal when you have the customer face to face, in your store? Depending on what it is you sell, it may be appropriate to offer refreshments, more practical displays of your products in action, and even a real-life comparison between two models they are deciding between. Having a brand new trendy item clothing on your body, a flashy new watch on your wrist or an exclusive handbag on your arm is a much more effective persuasion mechanism that simply looking at an image of it online. Integrate social media interactions with the ‘trying on’ experience to encourage social shopping. People take selfies trying on sunglasses to send to a friend for an immediate opinion. Why not build on that dynamic by making it easy to share the experience.

The one area that online stores excel at is the expansive reams of information provided with each product. As discussed earlier, these could include specific product details, where it was made, customer testimonials, popularity ratings, comparisons to other similar products and even video instructions detailing its use. How can a retail store, with its products for sale on a shelf, possibly compare? Well, it would simply take some fresh thinking outside of the box. What about a beacon for each product that sends information to a customer’s phone for access to all this information similar to the gallery guide at MOMA? Or mounted iPads displayed at various tactical locations throughout the store for customers to access in-depth information on products?

As long as traditional retail stores focus on offering that more social and human aspect to shopping, it’s unlikely that online shopping will take over completely. My advice is for the retail industry to identify and understand their unique points of difference when it comes to the customer experience and then capitalise on these. And remember that, just because you are a physical store, doesn’t mean you can’t also take part in the same playground as online stores. Take advantage of their clientele too, by starting an online store and social media presence, and reap the benefits of the digital era.

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Katja Forbes

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Katja Forbes is a UX design expert. She is International Director on the Interaction Design Association Board. Speaker, media commentator, DesignIt Aus/NZ MD.