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Retailers must think beyond bricks and mortar to secure their future

Alan O'Neill


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'Of all the industries that exist in the marketplace, retail is the one that stands out for me as the one that has experienced probably the most disruptive change in the last 50 years.' (stock image)

'Of all the industries that exist in the marketplace, retail is the one that stands out for me as the one that has experienced probably the most disruptive change in the last 50 years.' (stock image)

'Of all the industries that exist in the marketplace, retail is the one that stands out for me as the one that has experienced probably the most disruptive change in the last 50 years.' (stock image)

Of all the industries that exist in the marketplace, retail is the one that stands out for me as the one that has experienced probably the most disruptive change in the last 50 years. Whether you see it as positive change or negative is all to do with your attitude and your willingness to embrace Retail Darwinism.

There is a lot of confusion and noise around how online shopping is causing a retail apocalypse and the closure of physical retail stores. I don't believe that is all to do with online. But more about that another day. Right now, online is the story of the time. Recently I heard Simon Harris, Minister for Further and Higher Education, talking about adult literacy. Reflective of our new world, he called out reading, writing and digital skills.

For sure, online is eating into the overall retail spend and as it becomes more efficient and sophisticated, it will inevitably grow. Some figures were released during the lockdown that suggested that the global spend on online retail (not including airlines, hospitality, bookings etc) was about 12-13pc, with experts suggesting that it is unlikely to grow beyond 20pc of the overall retail mix.

However, Covid-19 has changed much of that. The inevitable spike in online purchasing has advanced the global needle by three-five years. It will, of course, drop back, but it is still expected that the overall mix will increase post Covid-19 from 12-13pc to about 15pc as new migrants to the channel grow to love it.

Now to look at the Irish figures. According to the CSO, the percentage of all non-food retail spent online (excluding motor, fuel and bars) grew from 8.8pc in July 2019 to 13.4pc in June 2020. Clothing, footwear and textiles show the biggest jump from 5.7pc in 2019 to 16.4pc in June 2020 (July results are not confirmed at time of writing).

Whatever about the numbers, the bottom line here is that online is growing and it's a significant part of the strategic mix for retailers. You might wonder why I'm even saying this. Well it's because of the interesting chat I had with Oonagh McCutcheon, the Corporate Communications Manager of IE Domain Registry. She shared the latest Tipping Point Report with me and it makes for very interesting reading. Here are some of the highlights along with some of my own observations.

1. Consumers. Since the start of Covid-19, Irish consumers have embraced online in their droves. There is an obvious spike as you can see above. But what is heart-warming is their wearing of the Green Jersey. The sense of solidarity seen by the shift to buying from Irish online retailers, accounts for an increase to 53pc of the overall online spend. Although it shows 'we're all in this together', there is still an opportunity (47pc) to grow that some more.

2. Small retailers. Quite shockingly, there is still a cohort of small retailers (34pc) that should, but don't even have a website. And only 25pc of all SME retailers actually sell online. Given that 82pc of online shoppers do so somewhat frequently, this makes those non-adopter businesses lose out. Strangely, 46pc of them say online is not their priority. Excuse my bluntness, but their relevance in their locality will continue to diminish, jeopardising their, and their employees', livelihoods.

If the reason is cashflow, take comfort from the excellent State supports that are in place from your Local Enterprise Office (LEO). You can also get advice from Retail Excellence Ireland at retailexcellence.ie

3. Your online store. The Green Jersey sentiment won't last forever. As soon as normality returns and consumers feel less patriotic, they will once again start comparing sites across the whole global spectrum. Retailers need to use this time right now to further enhance their online shop-fronts, their range and their descriptions.

International players have greater choice or 'endless aisles' online. Perhaps you could speak to your main suppliers about getting their support with this. Photography and descriptions offer you an opportunity to localise your site with language and detail that will inspire your customers to buy. That means that you can no longer just 'copy and paste' your suppliers' catalogues.

4. Click-and-collect. Businesses that started out as pure play retailers (ie online only, otherwise called DTCs - direct to consumer) are now opening stores. Why? Two main reasons stand out. They want to build a human rapport with their customers. And, experience shows that customers can be influenced to buy more when they come in to a store to collect their online purchases.

5. Returns. Recent research shows that customers' buying decisions are hugely influenced by the online retailer's returns policy. Use that to your advantage as a local supplier servicing a local customer base where international supply chains can be troublesome.

6. Data. Omni-channel is the next step beyond multi-channel. Multi-channel means that you enable your customers to buy either in-store or online, by telephone or by email. Omni-channel is when you use technology to join up all these channels and offer your customer a seamless experience - where all touch-points are connected. That and the use of data for personalisation may be a step too far for those with less budget. But don't let the noise around omni-channel put you off starting with the basics, described above.

Alan O'Neill is Managing Director of Kara, specialists in strategy, culture and people development. Go to www.kara.ie if you'd like help with your business. He is author of Premium is the New Black

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