Home – New Forums Marketing mastery Retailers mixing online with B&M in a brave new retail world

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  • #976220
    King
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    Here is part of a longer article in the Sydney Morning Herald that looks at the efforts of some large retailers to try and mix online with bricks and mortar operations.

    There is some good food for thought as to how soloists in the retail sector might be able to do similar things.

    Australia’s national accounts show that in the year to June, real consumer spending rose by 1.75 per cent for goods, but more than twice that for services.

    It is skewing the relationship between retail sales and household spending, according to industry experts. ”Retail sales provide less of a guide to household consumption than [they] did in the past,” says a report from the consumer behaviour researcher Directional Insights.

    ”Increasingly, household consumption is moving from goods to services – particularly health, education, online shopping, utilities and travel, none of which is accounted for in retail sales.”

    Online shopping is the obvious bogy on the horizon for Australia’s retail sector, even though it made up less than 4 per cent of retail sales last year and half of this was through local websites.

    Even here the impact is expected to be selective.

    ”As online retailing continues to expand, some retail sectors will be more at risk than others. In particular, sectors that are non-food or

    discretionary will be more vulnerable to offshore online competition, including clothing, footwear, gaming, books, magazines and recreational products,” says Nerida Conisbee, the national research director at Colliers International.

    She is not alone in thinking that online will change bricks-and-mortar retail without necessarily replacing it.

    ”The importance of channel integration is becoming more apparent as shoppers demand the ability to click-and-collect and transact in-store via mobile devices and kiosks,” Conisbee says.

    ”This is in line with the shift for retailers to hold lower stock levels and in some cases the in-store experience shifting towards browsing.”

    This appears to be the strategy for one of the few success stories in Australian retail, Oroton Group, which plans to close some stores and channel more resources to strategic sites.

    ”While these stores are profitable, with the extraordinary growth of online we believe it makes strategic sense to close some lower-volume stores at expiry and expand some stores in strategic locations to showcase the full range,” its chief executive, Sally Macdonald, told investors last month.

    Gerry Harvey is expressing similar confidence about Harvey Norman’s new online retail site.

    Consider the bulk of the average item sold at a Harvey Norman store. And the fact that the company already has delivery operations in place at every store in Australia.

    ”The big thing Harvey Norman’s got going for it is we’ve got sites in every town in Australia,” Harvey says.

    The company has also found that not everyone wants to wait for delivery, which is another plus.

    ”When someone buys something online, at least 50 per cent of them pick it up in store,” he says.

    One of the surprises for Harvey Norman was how buyers would come to a store then buy later online. And while actual furniture sales are low online, ”the sales of accessories have gone up 70 per cent online … so that’s had a massive increase in volume”.

    Moving to this new world of clicks and mortar is not so easy, though. Just ask Zahra, who started a

    spat with his predecessor, Mark McInnes, over claims that the department store’s woes partly stem from the fact that it was a late adopter of an online strategy.

    Its antiquated point-of-sale technology also needs replacing before it can integrate its in-store sales process with online and enable the multichannel offering. These fixes will not be cheap and definitely won’t be quick. A pilot for the new point-of-sale system is scheduled for the middle of next year.

    But there is some good news for the store.

    Even Australians who buy online will, on average, be buying 75 per cent of their Christmas presents in-store this year, says Directional Insights in a recent report.

    ”When it comes to shopping for Christmas presents, the in-store experience is still king,” it says.

    Read more: http://www.smh.com.au/business/tis-the-season-to-be-sorry-as-sales-figures-tell-the-story-20111216-1oyk6.html#ixzz1gk6skMQO

    #1079802
    Steve_Minshall
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    One thing I am noticing that pleases me as a B&M about to dip my tow in OL is that over the last 12 months or so online is now becoming more about convenience and service rather than just price. It used to be a dilemma how to have a cheap online offering and a more expensive B&M offering. Although still a factor, I don’t think that is so much the case now.

    In this article and also I heard the former head of OL for WallMart say what a significant part of OL sales was order online:pick up in store. Are my buyiing habits just odd because I really don’t get this? If I order on line it is for convenience so I get it delivered, if I buy from a shop it is because I want to browse so I show up there. Would you buy like this? Why? Is it a perception that collection in store will be quicker than buying in store?

    #1079803
    King
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    Indeed the buy online and pick-up in store is an interesting conundrum….why buy a toaster online then go and pick up up unless:
    1. the delivery cost is too high (without consideration of my time and fuel values)
    2. I am going to the area/centre anyway
    3. The customer service is so crap I cannot face putting up with them any more than I need to
    4. I have the perception that I am buying it cheaper online than I can buy it in the store.

    #1079804
    Steve_Minshall
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    King, post: 100288 wrote:
    Indeed the buy online and pick-up in store is an interesting conundrum….why buy a toaster online then go and pick up up unless:
    1. the delivery cost is too high (without consideration of my time and fuel values)
    2. I am going to the area/centre anyway
    3. The customer service is so crap I cannot face putting up with them any more than I need to
    4. I have the perception that I am buying it cheaper online than I can buy it in the store.

    Yes but for 1&2 I would just go and buy it in the shop without pre-committing to it. I might change my mind on the way, I might get too busy to go, etc.

    For 3 unless it was a truly unique item I would give my money to someone else.

    4. Possibly.

    The only other reason I can see is that people may see it as a way of getting something put aside for them so that they don’t waste a trip. Or maybe pay on-line and get the office junior to go and pick it up for you.

    As I say, I wouldn’t do it but it is proven that some people like to shop this way so I am genuinely interested to know what motivates them.

    #1079805
    JohnW
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    Our local “Hardly Normal” store now display “No photographs” signs all around the place.

    Is this a rear guard action against product scanning with mobile phones and online price shopping?
    Regs,
    JohnW

    #1079806
    Shaukat Adam Khalid
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    buy online and pick up in store is a bridge between offline and online purchase and works well for TElstra.

    The idea is that you browse in your own time and space then pick up the item knowing that it’s waiting for you so there are no issues about being out of stock.

    To tell you the truth, i prefer this model. been buying this way from umart for years.

    any issues with faults, returns, etc can be dealt with in store.

    #1079807
    Sentinel Meteorology
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    Offering the option of buy online and pick up in store is an interesting hybrid, and could be a good option to offer browsers in store who leave to check out the product online, by offering them the option to buy what they saw online safe in the knowledge that they will be getting exactly the item they saw in store, perhaps a slightly safer option than buying a similar item from an online-only store that they can’t physically inspect before purchase.

    This is an especially compelling option for things like clothing where slight variations between similar items can be important to the buyer. I think as online grows, this will become one of the key differentiators for B&M stores, alongside the ability to take the purchase home immediately.

    #1079808
    Corey
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    it’s all about offering the client a choice.

    Cheers
    Corey

    #1079809
    altaimage
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    We’ve seen online stores working in with bricks and mortar stores come a lot closer together the last couple of years. We’ve launched a large amount of eCommerce sites and the ones that do really well offer not only the advantage of convenience/price to online consumers but the additional service extras expected in store (layby, wish lists, pick up from store, check availability etc)

    A lot of customers want to check you out online before coming in and finding something’s out of stock or that you no longer carry it anymore or even just to find alternatives and educate themselves on what they’re wanting to buy.

    If you embrace the crossover between the two mediums it’ll definitely pay off in the future especially when retailers are being pushed for every inch of extra service they can offer.

    #1079810
    tradr
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    Just made a post about this very subject. Some interesting stats, and perhaps a solution. Feel free to comment at the bottom of the post.

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