Guest Blogger Brian Walker provides a snapshot of the current retail landscape.
The retail sector is transforming, and you don’t need me to tell you that, however the
speed in which online, especially through current mobile technology, is accelerating
is breathtaking.
Whilst our overall retail sector across Australia has a sales line of circa $320bn, we
see that online sales average at best 10% (although that’s an average with some
retailers reporting up to 40%) and online sales are growing at double digit growth.
We believe, at Retail Doctor Group, that this will mature to approximately 20% by
2025.
And the rub here is that the growth in online is principally in the “value” end of the
market – noting that Amazons’ entire product range, for example, is circa 70% in this
area.
And we see this with the increasing pressure on the department and discount
department store sector by the way as stores start to downsize and even close.
Now here is the good news, amidst all this change, we see the market pretty well
across all sectors, polarising and by that we mean the large-scale retailers generally
focussed on efficiency, fulfilment and the very broad term of customer experience. If
you like, a divide between buying and shopping such that “buying” will increasingly
become the domain of the Amazons, Alibaba’s, some other online marketplaces and
larger physical retailers who have the offer and infrastructure to compete.
At the other end of the spectrum we see the renaissance of the speciality retailer,
who can focus on their service model, creating their own loyal customer advocate,
building their community and offer additional value and experience that their online
counterparts can’t compete with,
In our local area, I see some nice examples of retailers focussed on their community,
offering a range of nice touches, such as classes in their product usage to offering
more services in their offer. One of our local bicycle retailers for example, offers to fit
Amazon purchased parts and then becomes the point of maintaining the bike.
Nice adapted offer, richer margin and overall business growth and a reminder that at
its heart retail is a people business.
Business growth, innovation and adaptation in today and tomorrows market are
inextricably linked.
Best Fit Retail
Brian
