WHEN billionaire retailer Gerry Harvey launched a bid to get GST imposed on online purchases less than $1,000, he unwittingly provided a major publicity boost for internet shopping in Australia.
To the horror of many struggling retailers, Mr Harvey’s high-visibility campaign had the effect of increasing the profile of online retail, which already accounts for about 4 per cent of total sales in Australia.
It’s a small but steadily growing segment of the market that’s forcing changes across the sector as retailers, property owners and manufacturers grapple to find the opportunities in this developing space.
While the quantum of online sales is still small, the internet’s role in research is massive and much more difficult to quantify.
Retailers across all segments are aware that customers do their price research online, seeking comparisons from east coast and international sites, often before going into a store to negotiate the best price, especially for big-ticket items.
Fashion has proved one of the most popular online purchases, and with many sites offering no-questions return policies for items that don’t quite measure up, a lot of avid shoppers have swapped the high street for the comfort of their own living room.
CB Richard Ellis most recent online retail research report canvassed more than 10,000 shoppers and found that two in five people shopped online, with clothing and footwear the fastest-growing online retail categories.
However, CBRE research revealed 90 per cent of consumers still visited a physical shop to view the product they wanted before making their online purchase.
So there are still plenty of opportunities for traditional fashion retail and, according to Colliers International retail leasing associate director Peter Millard, there are lots of strategies retailers can employ to internet-proof their business.
Mr Millard said there were several examples of fashion retailers that used genuine discounts and gifts to draw their customers into their stores.
“Retailers need to move away from the traditional model of putting stock on the shelves and hoping it will sell, they need to market themselves a lot more,” Mr Millard said.
“Country Road, Witchery and Main Peak all have very successful loyalty programs where you can redeem cold hard cash on your next purchase.”
These offers are often communicated through digital channels but customers need to go into the store to redeem it.
While many retailers gather email addresses for their customer base, it’s their strategy for communicating with these customers that separate the good retailers from the great.
For retail landlords such as ISPT, which owns enex100 and Forrest Chase, the challenge is drawing people into the centre and extending their stay.
Gill Collins calls it the “linger factor”, and as senior marketing manger of ISPT’s WA portfolio she dedicates a lot of energy to developing special events that will draw customer into the centres.
“If you can create something that you can’t experience online … you can really make a difference and attract some more people,” Ms Collins said.
The most recent attraction at enex100 was an exhibition of the costumes from the hugely popular Mad Men series.
Ms Collins said events such as the Mad for Fashion exhibition boosted traffic through the centre by about 10 per cent and bolstered sales by at least 5 per cent.
But it also demonstrates the influence of popular culture on retail and how popular television series and celebrities drive fashion trends, many of which are popularised and communicated through blogs and websites.
Ms Collins said the popularity of food shows and celebrity chefs had changed what people bought in supermarkets and enhanced food shopping.
However she said it was crucial retailers understood their customers and how they communicated, how they used technology, and this should define how retailers, in turn, spoke to their customers.
“With regard to Forrest Chase, which is an inside-out centre, we use digital advertising as a major strategy; if you can have a radio promotion or someone engaging with an SMS from a mobile billboard, you are talking their (Generation Y’s) language,” Ms Collins said.
“If you know your customers there are opportunities to use technology to your advantage.
“And the retailers that are going well are the ones that manage to integrate technology, old fashioned service, excitement all those things together.”