Phillip Weickhardt, head of the Productivity Commission’s inquiry into the ‘Economic Structure and Performance of the Australian Retail Industry’ says:
“Australian retail must transform to survive.”
Philip describes the situation today saying:
“At the moment, online offshore sales are only 2 per cent of total retail sales [in Australia].
While they’re growing rapidly, they’re not going to completely overwhelm sales from the so-called bricks-and-mortar retailers who are here.
We’re great believers that the retail industry is capable of responding [to this competition].
The competitively astute, the innovators, those people who adapt, will be stronger as a result.”
“transactions, involving the transfer of ownership or rights to use goods and services, initiated and/or completed by using mobile access to computer-mediated networks with the help of an electronic device”.
Why are you making it so hard – for me to give you my money!
Monash University’s Dr Colin McLeod, Executive Director of the Australian Centre for Retail Studies, remembers the WAYMISH factor – from 15 years ago – as being one of the most discerning insights into the world of retail.
At PayPal’s Secure Insight launch in Melbourne, he reminded his audience that it is very relevant in today’s world of online sales.
WHAT DO CUSTOMERS WANT?
“As retailers focus on developing online business and smartphone apps, it’s easy to forget the more human side of customer service. Making the customer feel valued and trusted is important for winning sales.
Free shipping, liberal return policies and loyalty perks, are the top three customer satisfaction strategies.
The 24/7 nature of online retailing, goes hand-in-hand with convenience.
Customer service comes first as [businesses] aim to acquire customers through word of mouth and retain existing customers through good service.”
NB Colin cites Zappos – a Nevada online shoe and clothing store – as a great example of a retailer trusting its customers, and doing well!
PayPal MD Frerk-Malte Feller says connectivity and internet speeds are increasing across Australia providing ‘huge opportunities’ for small business. With smartphones retail is now well and truly 24/7 and success in this new retail environment is all about better connections with customers.
“Australian retailers are being strangled by high retail rents and wages compared to overseas. A lot can’t drop their prices any further. But if they can’t reduce their overheads, how can they transform and survive?
By giving customers a reason to buy from them.
That means value-adding to a person’s buying experience and giving them something they can’t get from an overseas website. It means things like old-fashioned customer service — free advice and a friendly smile. It means using advertising, a website and social media to reach their customers.
Most of all, it means putting customer relationships first.”
New technology continues to redefine the point of purchase…with start-ups being urged to embrace new business models in order to remain competitive.
Pay Pal’s report indicates a changing attitude among consumers with regard to making payments.
There are signs that customers are frustrated with the variety of choices available to them and are seeking simpler solutions.
40% of consumers want fewer, or only one, payment method. This trend was particularly prevalent in males aged 18-30, with 60% preferring fewer payment options.
Australians continue to perceive face-to-face transactions as the most secure form of making a purchase.
Consumers rated purchasing online via a mobile device with the lowest rating in terms of security, stressing a need for retailers to help Australian consumers feel more mobile-secure..
The Australian Centre for Retail Studies identifies self-serve options as a major growth area, particularly in light of the iPad, saying:
“Use customer engagement as the key principle in retail business models,”
The retail sector analysis presented at the Pay Pal launch was fascinating.