Three retail problems you don’t need to worry about

Small and medium-sized retailers face a lot of challenges just now. Among them, argues Ian Newcombe, are pessimism and misinformation. The MD of Multi-Channel Retail at Sanderson tackles common internet-related myths.

There are a few misconceptions that have appeared, hand-in-hand with the rise of internet shopping, but we should take them with a slight pinch of salt. Here’s a look at three of these and why we shouldn’t be worrying about them.

1. “High street shops are over”

Many an article, news story and commentator would have it that the heyday of the ‘bricks-and-mortar’ shop is firmly behind us. And it is true that many high street shops are closing. Deloitte research suggests that 4 out of 10 shops will close over the next five years.

However, the same report makes it clear that what retailers need to do is to evolve the way they operate, to be able to compete in a multi-channel world.

Take John Lewis as an example:

As one of the UK’s biggest retailers. of course they have an online store. But did you know:

•         Two-thirds of sales involve both in-store and online customer interaction
•         One-third of all online orders get collected at John Lewis shops
•         The company’s online director says that physical shops are ‘hugely important’ to the success of the business

2. “The more people buy online, the less they buy in-store”

There is sometimes a hesitation to invest too much in ecommerce capability, particularly from companies who rely on their shops: “Do we want to push people online and away from the salespeople in-store?”

But this isn’t quite what happens.

Research actually shows that being online can help drive up your sales, on the Internet, and ‘in real life.’ PwC conducted a survey of consumers, which showed that 1 in 5 customers spend 25% more at retailers that do both physical shop and online.

Customers might do their research or even buy online, but bricks and mortar still holds these advantages:

•         Being able to touch and feel the product
•         Taking it away with you instantly
•         Avoiding delivery costs
•         Returning items easily
•         The ‘day-out’ factor – shopping as an experience

3. “Customers only buy from companies in their own country”

In response to the argument that the Internet provides retailers with access to a global marketplace, sceptics often respond that online shoppers aren’t interested in buying from overseas companies. Tax and currency questions are often cited as barriers.

So is global shopping a myth?

Well, it seems that the overseas market is a ripe one for British retailers. In Australia, for example, 70% of consumers regularly shop on foreign websites. Another report last year found that in the lucrative markets of Brazil and China, 27% and 46% of consumers chose a foreign website as their favourite online shop. Closer to home, Germany’s list top 10 online shopping sites featured three companie based abroad.

So the global marketplace is a big opportunity. And savvy UK retailers get this. Up to 72% of them are selling and delivering goods to buyers outside of the country, and this is set to rise.

And then there’s mobile. To find out about how smartphones are changing shopping, have a look at this infographic featuring key facts and figures about mobile commerce.

For more information, visit www.sanderson.com