Declining Retail and the Internet
The economy has had a bit of a tough time since late 2008 and the Global Financial Crisis (GFC). The world did not end, but there has been a change in our consumer culture I think. We are saving more than we have in the last 20 years. The high Australian dollar has made imported goods cheaper for us, but we are still holding onto our spending dollars. Just this week we saw Premier Retail, formerly the Just Group, with brands including Just Jeans, Jay Jays, Portmans, Jacqui E, Peter Alexander closing up to 50 shops. It is nearly 3 years since the GFC but a return to rampart consumerism still seems a fair way off.
I think in addition to us becoming more cautious with our spending we are also spending differently. Many years ago shops bought goods to us. If you lived in a rural area, the general store shipped in many goods, displayed them on shelves for you, and you went and bought what you needed. The shop was your sole source and you could only buy what they had got in. Where else were you going to get your essential supplies? You could not justify taking the horse and cart to the next city over. The retailer was in a position of power.
People are using the Internet more for their shopping nowdays. You can access it any time. You can compare prices easily. You can get exactly what you want, instead of walking down aisle after aisle and settling on what the shop keeper has decided to stock. With the rise of social media and websites like Facebook and Twitter we are also seeing people follow businesses. People are engaging with the story of a business and supporting them. People are opting in to the messages businesses are sending out. Rather than being bombared by advertising, people are now selecting businesses they want to hear from. Businesses benefit because rather than advertising to everyone, they can target their messages to their particular audience. Consumers benefit because these businesses are customer focused.
See the shift? Instead of the shop keeper being in a position of power, the consumer has that power back. Consumers have so much convenient choice, they can compare and buy when they like and have it delivered to their door.
So, like we heard in the dot com bubble of 2000, is the Internet the panacea of our retail ills? I dont think so, the Internet is just another way to do business, another aspect of your business. Your business website, your newsletters, your social media engagement all have to be part of your business. They need to be built from within, to reflect your business culture, your uniqueness, your niche and competitive advantage. They should not be an ad-on you just try once. For websites and social media to work they need to reflect your business. They also need to engage with and meet the needs of your customers. The new generation of consumers are frugal and savy, but get them on your side and they are loyal and become champions of your business.