Digital Business insights: Bigger rows of shops

"THE staff at Jessops would like to thank you for shopping with Amazon."

This was written on a notice stuck to the front door of a company that had been selling cameras for 78 years in the UK. They finally shut the business in January.

 

As sales continue to move to Amazon, eBay and other online outlets the situation for retailers gets worse and worse. Especially in the high streets and suburbs across Australia.

For many people the new face of retail is Australia Post or one of the freight companies knocking on the door with a friendly smile.

And it's not just about cost or choice it's also about service. Online service is often better, more informed, more professional and even friendlier than the real world.

A slick online site, professionally structured and crafted establishes a controllable relationship in a way that no staff member ever could. It is consistent. It's the same professional relationship again and again.

Online commerce continues to grow.

In these tough times, customers are guarding their wallets and purses and are still not sure about 2014. So Christmas may be an improvement on last year, but is unlikely to deliver big bonuses to the retail sector.

It will take time to settle down. And of course, it may not settle down any time soon because the Federal Government is about to conduct another round of cost cutting, redundancies and slimming, which will put even more people onto the streets looking for jobs, which will increase uncertainty even further.

The price of living goes up and people continue to pay down debt and not spend.

Unemployment, redundancies and worrying means that when customers do spend they want a bargain. And the bargain can come from anywhere.

More baby-boomers are retiring, which puts more even pressure on spending.

Retirement is a time to be thrifty. Time to manage spending even more carefully. And low interest rates do not generate high returns.

Retailers have got to get smarter, They have to change their business models. They have to think in different ways.

They have to consider their strengths.

Shopping is about entertainment as well as procurement. It allows people to see and touch. It adds the extra dimension that the screen can't deliver.

Retailers have to collaborate with other retail outlets to create customer-focused destinations, local precincts with a wide range of specialty solutions.

Start thinking shopper experience aggregated by location. Westfield does it with concrete and parking. And retail chains and the big guys pay a premium to be there.

The "high street" rows of shops have to start thinking about the joined-up experience of somebody walking up and down their road looking for something. What does that mean? Is it an entertaining experience?

Can the 20, 50 or 100 shops in a local streetscape collaborate to make the customer experience better - look better, feel better, present better, promote better. Can the 20, 50 or 100 shops actually collaborate, understand what shared value means and realise the cost and efficiency benefits of working together?

Easier said than done. And stubborn independence can go too far.

Shops have to be the attractive, informed, personable real window on the world and also improve their fulfillment dramatically to compete.

That means speaking to Australia Post and wholesalers to solve the customer expectation. "I like this." "I want this." "I want it now, or at least tomorrow, can you get it to me?"

It means including cafes, restaurants and hotels into the solution. Joining the dots. It means seeing the surrounding retailers as allies not competitors, because they are.

Then the key is to provide fast fulfillment once interest in the suburb is aroused, faster than online. And there is a problem. Because warehouses can carry stock, shops can't afford to.

So direct electronic collaboration straight into the warehouse has to be built in to any solution. You are competing with a giant international warehouse (Amazon) with a shop window to the world. All Amazon has to do is to deliver.

Window shopping in a suburb or high street becomes even more important. Expand the window electronically into and onto your website and the suburb website. No suburb or street website? Create one.

Link and share the window-space up and down the street. Think wayfinding - the journey each potential customer makes each time they visit. Are they hunting for something right now? Or are they browsing? Make it easy to do both.

Make the street smell nice. Make it look nice. Make it sound nice.

Think Disneyworld, and I don't mean literally, I mean understand the principle.

Walt Disney started thinking about Disneyland whilst watching his kids at a fairground. It was dirty, scruffy, shabby and he started wondering how much nicer it could be for families and children ... and there you go.

Most high street environments are dirty, scruffy, shabby and noisy. It's hard to park. It can be windy, sunny, exposed. It doesn't have to be like this.

Time to fight back. Collaboration is a good start. It might be the only affordable and leverageable strategy you have.

Share ideas and consider what a local retail precinct means from the customer perspective. Ask them. Talk to them. What do they like? Why are they here? What don't they like? What can't they find?

Start with things that are easy to do. Map out a journey forwards. What can a collaboration of local retailers do cost effectively. Quite a lot.

But only by working together. And only if everybody pulls their weight.

Next talk to the council about what they can do to help.

Then talk to the retail association about higher-level discussions with wholesalers and fulfillment partners. See what can be done and what can't. Then look at what web based methods can best promote your location, connect to and build relationships with prospective customers and existing customers.

Cross connect. Cross sell.

Include local media.

Build on the strengths of "local", "specialty" and "collaboration". Don't fight. Don't compete with the shops in your street. Compete with other suburbs. Compete with Amazon.

Make your streetscape a great place to visit and then build on it. The more you can build regional,, locational collective value, the more attractive your location becomes to big brands. If you can demonstrate effectively that visitors are spending more time in your suburb than before, then you have leverage.

Bundle offers. Not just within your store, but between stores and cafes and restaurants and fitness centres and childcare centres. Make your location a brand.

Retrain your staff to support this approach. Change their incentives to support the collaborative strategy.

Put investment into smart defence of what you already have.

Invest in technology, distribution and promotion. Match the real world with online. Bring the internet into your shop. Include the best web developers in your town at the planning stage. Ask them for ideas. They know how to do this stuff.

Connect producers and manufacturers into "your local" precinct where possible to provide and add information, knowledge and authenticity to the products for sale locally.

Master "online" while defending "offline". Put your suburb or retail location (50 shops, 100 shops) online.

Most of all don't be scared. Attack. But be smart about it. Don't throw money at solutions, throw smart thinking and your precious time.

And recognise, this is a marathon not a sprint. It's a new collaboration at a local precinct, suburban level. And unless you are big enough to go it alone (Woolies, Coles, DJs, Myers), then if you don't collaborate you are toast.

So get out there. Talk to your competitors. The world has changed. They aren't your competitors any more, they are your new best friends

- John Sheridan, November 2013.

John Sheridan is CEO of Digital Business insights, an organisation based in Brisbane, Australia, which focuses on helping organisations and communities adapt to, and flourish in, the new digital world. He is the author of Connecting the Dots and getting more out of the digital revolution. Digital Business insights has been researching and analysing the digital revolution for more than 12 years and has surveyed more than 50,000 businesses, conducting in-depth case study analysis on more than 350 organisations and digital entrepreneurs.

http://www.db-insights.com/

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