“Pure play online and pure play offline retail is dead” says Dr Sean Sands of Monash University’s Australian Centre for Retail Studies.
Sands told the ACRS Retail Insights seminar this morning that retailers need to be blended across channels and not just dedicated to one channel.
Sands says despite predictions of the demise of bricks-and-mortar retail as a result of the rise of online, traditional retail is alive and kicking.
“Yes retail has been through a very disruptive stage but retail is here to stay,” he says.
“For me its not about extinction so much its about evolution.”
This is borne out by ACRS data which shows 92% of retail transactions continue to be made through stores.
Sands says there are five retail trends for 2015 and beyond:
1. Compelling brand story and distinctive experience
Sands says a compelling brand story can be conveyed through design, product or salespeople.
“Barriers are being blurred between production and consumption,” he says.
One Sydney small business which does this well is shoemaker Andrew McDonald in the Strand Arcade.
McDonald hand-makes shoes in his store which he sells for between $1000 to $2000 a pair.
“ You can come in and experience your product being made,” Sands says.
“This is changing the way retail thinks about the end consumer. There needs to be a collaborative experience.”
McDonald is involved his customers in the creation of the product to create that story and distinctive experience.
2. Customised offers based on personal preferences
Retailers need to customise offers based on consumers’ personal preferences according to Sands.
He says one trend in consumer preferences that SMEs can latch onto is the desire to purchase local.
Sands calls this “glocal” where consumers want everything to be global but local to them as well.
“Local can become a very efficient and effective strategy whether you are a small retailer or international,” Sands says.
He cites the example of the organic grocery store Terra Madre in the Melbourne suburb of Northcote.
Sands says the store is a very simple space, crowded with products but always packed with consumers.
“In this store the product is the hero,” he says.
“It feels very authentic and very local.”
3. Transparency and real-time inventory views
Sands says retailers can use technology to improve their back-end processes.
“Transparency and real-time inventory is something many retailers don’t have the ability to grasp,” Sand says.
“It is very much about putting service design as a methodology at the centre.”
Sands warns many retail staff are stressed about their job.
“It’s not plain sailing,” he says.
“They are apprehensive about the fact that customers often have more information than them when they come into the store. “
4. Enhanced and consistent experience across all channels
According to Sands, “brick is the new black” as previously pure play retailers are flocking to physical stores.
“Consumers want the ability to touch and feel and the ability to evaluate products,” he says.
“Physical spaces are not just places to sell but experiential spaces and also broadcast spaces.”
Sands calls this blending of physical and digital as “phygital”.
“It’s about bringing together online and offline experiences,” he says.
But Sands warns the experience has to be consistent across all channels.
5. Two way social experience
Sands contends retailers using social media need to ensure that it is a conversation.
“Not just a push or a pull strategy,” he says.
“The search phase [before a purchase] is becoming much more about discovery, inspiration and innovation.”