Australians were able to shop Amazon Prime Day for the first time this July. However the web giant’s annual flash sale faced serious competition from Australian online shopping market leader eBay, which launched its own site-wide sales event to compete with its new competitor.
Whether or not Australian Prime Day proved a success, it’s clear that Amazon, eBay and the Chinese web giants Alibaba and JD.com are growing in profile and reach, ensuring that online sales will continue to cannibalise traditional Australian store sales in the coming years.
Our new report Traffic analytics: Powering Australian physical stores in the e-tailer age details the competitive challenges on our high streets today, and presents a host of ways that retail footfall data can be used to bolster store performance, and help retailers retain customers in an evolving market.
Our key message is that there are plenty of ways to use bricks and mortar space to shine, and beat the onslaught of online competition.
What Amazon Can’t Do
Globally we have seen a rise in the concept of WACD — ‘What Amazon cannot do’ — a way to fight back against what Amazon offers through specialism, creation, experience and expert help. Within our report we explore some of the lessons learnt from other regions where Amazon has entered the market, and where progress has been made to adapt to a new retail landscape.
Innovative retailers in Europe, North America and Asia have remodelled, introducing drama and unique experiences into stores, and made progress integrating store systems for a more omnichannel approach to customer service and engagement. Australians are moving in this direction too.
Many are using store traffic data to help them design new layouts, on-site features and cross-channel marketing campaigns in line with tracked customer behaviour. Benchmarking across a store estate helps retailers fine-tune these transformations, making informed decisions as they future-proof their businesses.
Here’s how next generation bricks and mortar retail is coming to the fore in Australia:
‘Retailtainment’ – fun, laughter, learning
Retailers are hosting workshops, throwing parties, and offering unique experiences in their stores rather than merely displaying inventory. French group Sephora, allows beauty fans to take classes and experiment with beauty products, while Paperchase in the UK offers in-store crafting events such as ‘make your own Valentine’s Cards’. German DIY retailer Bauhaus hosts women only evening workshops to learn DIY skills. In Australia, JD Sports, the branded sportswear retailer, is opening stores that boast state-of-the-art lighting, DJ sets, and store events such as street dance performances, enhancing the customer experience.
Staff assistance – real people, real connections
Stores that can differentiate with unique product and knowledgeable staff to help progress the customer journey are likely to keep the threat of the pure-play retailers at bay. Offering exclusive, luxury or own brand ranges, coupled with the human touch puts the online marketplace experience firmly in the shade. Globally, retailers such as John Lewis, Apple, Warby Parker, Fossil and Lego have well-trained staff on hand to share product knowledge, upsell with hand-held devices and engage directly with customers. In Australia, retailers such as Bunnings and Country Road are wising up to these opportunities. Traffic data analytics can help optimise labour scheduling in line with peak trading hours, making sure the very best service is on tap when needed most.
Click and collect – omnichannel services on site
In the US, 40% of 2017 ‘holiday’ season shoppers used click and collect, according to the International Council of Shopping Centres, and of these 90% made additional purchases while in store to collect. Many US and European department and specialty stores are investing in tech to make sure omnichannel services are slick, and staffing adequate, and Australian retailers are also seeing the benefit of in-store collection. For instance Myer has said that its click-and-collect had grown strongly to represent 15% of orders in July 2017, and the department store group is developing smaller format stores where this is a key feature.
Traffic analytics will empower retailers in the new landscape
It’s clear that bricks and mortar retailers have considerable advantages over Amazon, Alibaba, JD.com and the other pure plays. Now is the time to ramp up these benefits and make them work harder to drive sales and secure a long-term future.
Traffic data analytics can help in understanding the shopper journey and behaviour patterns, enabling retailers to introduce new way of connecting with customers.
With traffic counting technology, and data insight, it’s possible to pinpoint stores, or areas within stores, that aren’t performing, so that strategic improvements can be made.
Labour can be optimised to ensure the best sales people are on the shop floor exactly when the biggest sales opportunities are expected. And marketing can be insight-driven and vastly improved thanks to benchmarking. These are just snapshots of what can be achieved with real-time and historic footfall data analytics.
Adapt now to survive is the mantra in Australian retail today
Change is non-negotiable for retailers who want to survive the retail revolution. “Limited direct pain is being felt today, but in five years’ time the status quo could be very different,” says Adam Ioakim, General Manager for Australia & South East Asia at ShopperTrak. “It’s clear that Australian retailers now have a window of opportunity to adapt their offer and retain their credibility and their customers, and survive. But inaction could lead to extinction. Not developing a survival strategy, and evolving the core retail offer could be very dangerous.”
Read our report on how data insight will empower retailers in the new landscape.