New technologies set to revamp retail landscape: Report
Tuesday, October 18, 2011/
New technology continues to redefine the point of purchase, according to a new PayPal report, with start-ups being urged to embrace new business models in order to remain competitive.
The report, titled Secure Insight: Changing the Way we Pay, was compiled by PayPal in conjunction with Forrester Research, Nielsen and the Australian Centre for Retail Studies.
It identifies the factors influencing Australian online commerce, which is forecast to reach $37.7 billion by 2013, an increase of more than $1 billion since last year’s forecast.
Frerk-Malte Feller, managing director of PayPal Australia, says there’s much more to online commerce than having a website, urging retailers to lift their game.
“The culmination of new technologies and new business models are radically altering the retail landscape as we know it,” Feller says.
“These emerging channels bring huge opportunities for local Australian merchants to compete in the online market and increase engagement with their customers.”
“We have seen a wealth of new business models emerge that are redefining the point of purchase. For example, QR codes allow traditional media to become a virtual storefront.”
The report also reveals a changing attitude among consumers with regard to making payments.
“Consumers regularly switch between payment methods depending on the product they are purchasing, and carry multiple payment methods with them at most times,” the report says.
“There are signs that customers are frustrated with the variety of choices available to them and are seeking simpler solutions.”
The report reveals 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.
Price and security are also important to consumers; 40% said the “price of the product being purchased” is the number one influence determining which method to pay with.
However, the research shows some consumers feel the choice of payment method is not theirs to make, with retailers restricting choice by insisting consumers pay cash for low-value items.
Meanwhile, 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 report says.
Colin McLeod, executive director of the Australian Centre for Retail Studies, identifies self-serve options as a major growth area, particularly in light of the iPad.
“The key to the new world of retail is to use customer engagement as the key principle in retail business models,” McLeod says.
According to McLeod, there are five main ways iPads are being used at a retail level:
- Self-service kiosks. Customers can unlock content, access product information, browse merchandise and surf social networks. An iPad kiosk is relatively inexpensive also.
- Assisted selling. Purchase history, new lines and videos can be uploaded to the iPad. It is used to assist the sales associate in showcasing other products that may currently be out of stock or only sold online.
It can also be helpful in comparison shopping. Customers can sift through various items, comparing various elements such as price and style.
- Customer relationship management. iPads can be used to sign up customers for promotions and email alerts, either at the register or in the hands of employees.
They can store previous customer purchases and up-to date-loyalty card information.
- Customisation. This can easily be achieved on the iPad as customers can take control of the design process, from jewellery to sneakers.
- Point of sale. Retailers have begun using iPads to eliminate long queues and create a self-service option for customers.