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Online Retailers Threatened by Australian Bricks-and-Mortar

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By Published On: July 23, 20180 Comments

New research from Monash University reveals Aussie consumers prefer shopping in-store to pureplay digital shopping experiences, but customer experience via both channels can help fix this.

According to the latest research from Monash Business School’s Australian Consumer, Retail and Services (ACRS) research unit’s quarterly survey of shoppers, retailers are failing to capitalise on the resurgence of bricks-and-mortar retail and the popularity of omnichannel experiences.

The report has revealed that 65 percent of consumers prefer to shop in-store, while only 18 percent of respondents quoted online as their preferred method of shopping.

Dr Rebecca Dare, the managing director of the ACRS’ research unit within the school’s marketing department believes Aussie retailers are missing out on vital sales due to a lack of in-store personalisation and lacklustre customer experiences.

“We see trends overseas with empathic, human-centred design and advanced technologies that make shopping easier and/or more pleasurable, however, in Australia it’s all too common to see that in some cases the basics aren’t right,” she says.

“Stock is piled high to the ceiling, merchandise is displayed poorly, and finding personalised customer service can be difficult.”

Current trends indicate that consumers are shopping more in-store now, than they were just two years ago, especially when it comes to non-grocery related purchases.

“We are also seeing similar trends overseas. Nearly 80 percent of shoppers in the US purchased more than half of their items in-store in 2017,” Dare says.

Although, she also notes that retailers in the US are better accommodating to consumers as they flock towards physical retail stores. For instance, brands like Nike are focused on merging online and offline offerings in its bricks-and-mortar shop fronts, with things like technology-enabled personalisation and in-store shopping that’s made easier through the company’s updated digital app.

This is evident in the new Nike by Melrose store, which is designed to give consumers a heightened customer experience. The store reportedly “leverages the power of digital” to remove some of the friction points that generally arise when retailers transition from traditional bricks-and-mortar retail or a pureplay environment, into an all-encompassing omnichannel offering.

The footwear and apparel company decided to open a physical store that’s dedicated to promoting in-app sales after achieving positive sales growth via its app, with its online NikePlus members making up a large portion of its mobile sales in the last 12-months.

Traditional retailers also have the opportunity to leverage sales in real-time, with Dare referencing Ikea in the UK, who create rainy day displays with products like umbrellas when it’s wet out. She believes that examples like these are sparse in the Australian retail landscape.

“There is a return to the importance of customer experience at physical stores. Human touches and sensory experiences of a store visit is increasingly important, particularly with millennials – who prefer to spend more money on experiences than on material things,” she says.

The technology to cater to new customer experience demands is available, through retail AI solutions like Alibaba. The company recently demonstrated its latest in-store/digital AI tech at a pop-up concept store in Hong Kong at the start of the month.

Working in collaboration with GUESS, the e-commerce juggernaut displayed its latest project – FashionAI.

“With the latest AI technologies, like machine learning and computing vision, FashionAI can now recommend items that match [a person’s] personal style,” said Zhuoran Zhuang, vice president of Alibaba Group.

“That gives imagination to consumers and injects new ideas into fashion brands and retailers to rethink their business and sales models. Leveraging AI in fashion, therefore, offers many untapped opportunities for fashion retailers.”

This sort of technology is popular in Asian markets, especially China, but has been slow to be adopted by Australian businesses.

According to Dare, “shoppers miss the customer experience of physical stores; ‘real-life’ connection with other people, touching things and trying them on is not an experience you get online.”

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