Online versus in-store: a false dichotomy in retail
A report from one of Australia’s largest shopping centre operators suggests that the so-called war between online and offline merchants is an over-simplification, and that retailers need to accept and embrace the fact that consumers expect digital integration in their shopping experience.
The annual Recommended Retail Practices report from AMP Capital Shopping Centres (AMPCSC), which operates 36 retail centres in Australia and New Zealand, looked into shopper habits in the $240 billion sector. It surveyed young men and women, and younger and older mums, and found that of the 75 percent of Australians who are online, 85 percent use some form of digital media to assist in shopping. That’s roughly 5 million households researching purchases online through retailer and manufacturer websites, search engines, retailer newsletters, email alerts, and social media.
But with the vast majority of retail purchases still being made in bricks and mortar stores, AMPCSC’s head of marketing and communications, Stuart Langeveldt, says that the structural shift taking place in Australian retail cannot be shoehorned into a simple online versus in-store dichotomy. “Our findings clearly show shoppers expect a seamless integrated experience from their desktop to their smartphone to the store itself.” He says Australians are connected, and are increasingly demanding digital access wherever and whenever they want. “They don’t expect their shopping experience to be any different.”
Australian consumers now demand the ability to shop anytime, anywhere and across multiple channels, but the in-store and in-centre dream is far from dead. In fact, the report found that heavy online shoppers now see physical stores and shopping centres as leisure destinations. That is, they are places in which shoppers can immerse themselves and disconnect from the outside world. Is this implying that the digital environment is now considered ‘the real world’ while shopping centres with physical stores and physical people is a distraction from it? It’s a suggestion that’s certainly illustrative of the new paradigm AMPCSC is reporting.
By way of example, the report documents several cases of existing retailers with forward-thinking digital facilities, including British supermarket chain Tesco’s virtual shops in South Korea (where the store is called Home Plus). Set up in everyday locations such as subway stations, the virtual stores are basically floor-to-ceiling pictures of supermarket shelves with QR codes that customers scan with a smartphone to put in their virtual basket. After a virtual checkout, the goods are then delivered to the customer’s home.
Another example is US giant Walmart’s introduction of a system whereby customers can order items online and then pick them up at their nearest store. Locally, Dick Smith Electronics offers a similar ‘click and collect’ function.
On the flip side, UK-based online clothing retailer Banana Flame is trying to recreate the in-store experience, allowing customers to virtually try on clothing by ‘holding up’ the items in front of a webcam to see if the style suits. Shoppers can also share images with friends for a more social form online shopping.
This blending of online and offline worlds is the future, according to the report, and the sooner Australian retailers embrace this new paradigm instead of seeing the digital market as a competitor (as seems to be a major issue in Australian retail at the moment) the better.