Analysis

Thursday 24 July 2014

Aisling O’Connor: High street bubble set to burst asshoppers embrace e-tail therapy

Published 03/01/2013|05:00

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Has the time come for the long goodbye to the ringing till and the tired-looking sales assistant muttering: "Please enter your PIN"? As the internet continues to transform how we work, rest and play, e-commerce is reshaping the retail landscape as we know it.

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Christmas shopping has been big news in recent weeks. Many Irish retailers reported an increase in revenues and footfall on last year – even though astute shoppers held off for early sales as well as spending big in the premature 'January Sales' from Christmas Eve onwards.

But while queues were forming on the evening of Christmas Day to bag discounts when shops opened, more shoppers than ever clicked their way through the bargain rails – with reported online takes of £300m (€370m) and £400m (€492m) on Christmas Day and Boxing Day from British 'armchair shoppers'.

The Irish uptake of online shopping has been slow – most likely due to broadband availability issues and foreign-based online retailers not offering delivery to Ireland. The globalisation of the retail environment, paired with the surge in smart-phone ownership, has opened up a worldwide mall to Irish shoppers.

Visa Ireland expects that the average Irish consumer will have spent €227 online over Christmas, which is a substantial proportion of an individual's holiday budget.

Recession-battered shoppers are working harder to keep their jobs, and are perpetually on the hunt for a bargain. Despite the threat of identity theft, the convenience and savings fostered by the online environment are attractive to time-poor and technology-rich consumers looking for a low-cost high life.

'Always on' is the best description of the changing face of the retail landscape. The implications of the estimated 71pc smart-phone ownership in the Republic affect every shopowner from department store to the twee bookshop.

Mintel Ireland reports that as the internet becomes an ever-increasing extension of who we are, switching off can lead to the feeling of being 'cut off'. This 24/7 attitude is good news for retailers with e-commerce capabilities.

Where consumers struggled to fit shopping and banking into their busy schedules they can now do it all on the bus to work; while watching their soaps and dramas on demand; or moments before the head hits the pillow.

So the message to bricks-and- mortar retailers is that not embracing e-commerce is effectively closing their doors to customers when they could be open – and missing out on the opportunity to compete in global markets.

The likes of Holden Leather Goods of Dingle no longer has to wait for tour buses to welcome well-heeled customers to its fabulous, far-flung store.

But what will become of the shopfront and retail park? The reason why Amazon is the global leader in online sales is due to its main product mix, low overheads and free delivery. Toys, books, music and DVDs are not touch-sensitive purchases. Feeling a biography's weight in your hand is not essential to the decision to buy the book.

So, Amazon's undercutting of prices and easy '1-Click' ordering could spell disaster for toy and book stores not engaging an online strategy.

Fashion is a tricky one, though, for the e-tailer. With so much of the decision to buy based on fit and feel, the internet proves a difficult market place. Buying cosmetics, accessories and bags online is less risky, but skinny jeans, shoes and lingerie can be miss more than hit, in fit.

Delivery and returns in online shopping also puts people off. Though most UK and US online stores offer free returns, this often applies only to home country orders.

Dependence on postal services, couriers and express shipping not delivering on its promise can make click-to-shop more hassle than it's worth. This Christmas, many a red-faced gifter handed over a printed-out email confirmation with the promise of a gift that failed to make it on time.

So for many a consumer, the internet is still an information super-highway useful for researching future in-store purchases, but the tide is changing. Innovations in marketing and logistics will ultimately overcome the existing drawbacks of e-tail therapy.

Over 50pc of Irish people are currently shopping online, a technology trend that will undoubtedly explode in 2013 – and it is the high street's bubble that will burst.

Irish Independent

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