The retail luddites
Retailing is arguably the second oldest profession in the world. But the question is “will it survive in the form we know it”?
Are we witnessing the biggest retail revolution of all time? Is the Armageddon of traditional retailing upon us?
At this very time we see some large Australian retailers almost grudgingly adopting internet selling or upgrading to where they think they ought to be. They are way behind the times. The concept of multi-channels is still anathema to them (even though multi-channel commerce is already becoming obsolete and is being replaced with “touch points” and “agile commerce”).
And yet internet selling has been around for decades. The Luddites have fobbed it off and some are still burying their heads. Dismissive of anything but good old bricks and mortar, we hear numbers bandied about of retail sales on the internet being only 3 percent of total retail sales. This may be the case if one considers all retail sales. However one would hardly purchase a takeaway on the internet and very few people purchase food. Those two categories alone significantly distort “non retail as we know it items” included in retail sales.
But if you take “normal” retail sales, most will agree that the figure is closer to 10 percent or even higher. Certainly, in some categories sales will exceed 15 percent. Some of these sales are from offshore retailers – hence the furore a few months ago that GST should be payable on overseas purchases of under $1000. Thankfully that seems to have died down.
But the revolution is far deeper than internet sales. Technology is providing the shopper with a raft of options previously unthinkable.
No need to do price comparisons walking store to store or by phone. One major office goods retailer provides free online facilities. Simply log onto one of their computers and surf the net for price comparisons.
But the real revolution is being sparked by the smartphone – which is really a misnomer. It is no longer principally a phone. Only a small percentage of time is spent speaking on the mobile versus texting versus “the rest”. It is the phone that set the scene for this handheld gadget but it needs a new name.
So what of the impact on retail? Well any smartphone owner can do precisely what the office supply retailer offers – whenever and wherever they like. This is being abetted by applications that allow comparisons by scanning a barcode (and then buying the item). And the advent of the various 2D Matrix Symbologies such as Microsoft Tag are opening up almost limitless information for the customer.
Add to this the notion of “gamification” or “funware” taking advantage of humans’ psychological predisposition to engage in gaming which relies on achievement levels, and you have a whole new world emerging and changing by the day.
Although Ned Ludd would have been smashing a few smartphones were he here today, there was no stopping industrialisation, automation, computerisation or new technologies in general despite his efforts.
There will be no stopping the retail revolution.
NB: The Luddites were a social movement of 19th-century English textile artisans who protested – often by destroying mechanized looms – against the changes produced by the Industrial Revolution, which they felt were leaving them without work and changing their way of life. The movement was named after General Ned Ludd or King Ludd, a mythical figure who, like Robin Hood, was reputed to live in Sherwood Forest.