One can’t ignore 95,000,000 monthly visitors to Amazon. And, one cannot ignore the fact that 95% of Americans shop or will shop at Walmart. Ecommerce is set to grow 200% over the next five years. It has grown 38% over the past three months in the USA alone. In comparison to Walmart’s online rate of just 11%. Macys, Sears and Walmart are closing stores citing competition from Amazon as a major factor of declining sales. However Nordstrom have taken up the challenge, 25% of their business is online and they have set the bench mark for other traditional bricks and mortar retailers to follow.
Ecommerce is an opportunity not a threat, it’s not a passing trend and it’s here to stay. The number of people that venture into stores to touch and feel is shrinking. Transport costs and parking fees continue to rise and access becomes more time consuming. Anti-social behaviour in and around the cities and shopping malls continues to worsen, all of these factors are driving more and more customers online.
Amazon has taken another gigantic step buying a bricks and mortar super market chain for an estimated 34 billion. The sole reason for this decision is to improve the online groceries service by guaranteeing two hour delivery. Amazon will deliver groceries from the closest store according to zip code. In addition to this brave move they are trialing a supermarket with no check outs in Seattle, after the technology has been trialed and perfected Amazon will roll this out into all stores. Rather than setting themselves up against well-established competition they have used innovation to drive them beyond any competition.
Another example is Elon Musk; his fearless approach to the future via technology has opened new consumer doors. His electronic cars will have a dramatic effect on traditional gas powered vehicles. We have to break from the shackles of the of mentally “if it is not broke don’t fix it”
When it comes to ecommerce, Australia lags more than a decade behind and it will take another decade for them to catch up. Many local brands have gone into administration over the past two years, Herringbone, Marcs, David Lawrence, Rhodes and Becket, Oroton. British retail Giant, Top Shop and Top Man, failed and after two years of poor trading their closed their doors. The two and only department stores are struggling in the face of online competition. Myer shares have dropped from $4.00 to 53 cents in four years and David Jones shares have dropped 45% in three years. Myer’s online business equates to less than 1% and David Jones is currently at 2.6%. Both online stores are clunky, awkward to navigate and out of date and delivery times are greater than delivery times from stores in the USA and UK.
The rule of thumb
The rule of thumb is at least 10% of your retail business must be online. Both are competitor focused and mimic one another. There is no sign of innovation, just one sale after another; they have become bargain basement style. Recently Textile Traders have announced they will close all stores and trade purely online, similarly Airflex will close all but flagship stores and focus more attention online. And, finally let’s be honest, service standards in Australian department stores are way below average. Under staffed, poorly trained, poorly paid and managed under archaic hierarchy mentality.
You may as well put a large sign in the window saying shop onlineA customer in Australia can purchase $1,000 worth of articles from Nordstrom in the USA and have it delivered to the door within 5 days. You pay no duty or tax and get a lot more for a lot less. Shop online at Amazon and the choices are infinite and the service is simply amazing. The psychology behind online shopping is there are no human barriers to confront you, you simply choose, click and pay and wait for the surprise.
So what are your choices?
Drive to the local mall, search thirty minutes for a parking spot that’s probably going to set you back about $25.00, argue with your wife, get served by some pushy commissioned based sales person with no product knowledge. More than half the day is gone and it’s been a waste of time. We’ve all had this kind of unpleasant experience. Now, you can save a lot of time and money by shopping online and use the time and money you have saved to take your family out for a pleasant lunch and enjoy some quality time together.