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2018-12

What does the future of retail look like?

by Daniel Salter
 | 
27 November 2018

What tentative steps are Aussie retailers taking to service the changing needs of shoppers and what can you do now to get one step ahead.

We may not yet be at the point where everybody shops for their weekly groceries via an augmented reality supermarket and have their goods delivered by drone, but the technology is already in existence to make it happen.

Myer and eBay Australia, for instance, recently teamed up to launch the world’s first augmented reality department store. Using “shopticles” (AR glasses provided by eBay) shoppers can browse 20,000 items in the virtual store and those with an active eBay account can purchase via their headset.

Drone delivery, similarly, is on the cusp of becoming reality in Australia. A company called Wing is already trialling the use of drones for delivery in Canberra. Well known brands such as Guzman Y Gomez and Chemist Warehouse are amongst those 150 companies signed up to the trial. 

While drone delivery is still in its infancy, the launch of Amazon Prime in Australia in June 2018 is likely to have an immediate impact on the expectations of shoppers in the region. Members benefit from delivery within two working days as well as a host of other exclusive offers. 

With so much rapid change in the way people can shop, it will be interesting to see which technologies rise to the top and become all-prevalent. 

The future of shopping

Consider how you shop. Do you go into a store to checkout an item in person then order that same item online (a practice known as showrooming)? Or do you live your life online, researching products, reading reviews and tapping into social networks before making your purchases online?

These practices have long been the discussion of media speculation spelling the end of the bricks-and-mortar store as we know it. However, we believe that there is still a place for both the online and in-store experience. Some 49% of respondents to our 2018 Salmat Marketing Report said they prefer to buy in store, while 32% of consumers said they prefer to shop online.

In fact, even retail juggernauts such as Amazon are experimenting with their own bricks-and-mortar store experience with frictionless payment. Amazon Go is a concept store located in Seattle where shoppers can leave without manually purchasing items at a checkout desk. Shoppers simply have to tap in using the app when they enter and the app will track all the products shoppers have picked up off the shelf. Once the shopper has left the store they will be sent an invoice and receipt for the items.

Amazon’s venture into bricks-and-mortar bookstores is another way in which the online/offline shopping experience is merging into one. While the stores tend to hold limited stock, they are merchandised in the same way as the online store, grouping together books that people often buy together. A recent New Yorker article questioned whether this approach will limit the thrill of discovery many feel when shopping in store, undermining the experience.

Impact of technology

Technology is increasingly becoming an important interface between consumer and brand — regardless of whether the purchase is made in store or online. A recent article on The Conversation highlighted that “the number of smartphone owners in Australia sits at 88%, and purchases made via mobile phones have risen by 25% in 2017”.

The article gives the example of Dan Murphy’s which has decided to take a “right-size” approach to its stores on the Gold Coast (stores are smaller, but with an emphasis on store pick up). Using mobile technology, shoppers who have purchased via the app will automatically alert the store when they get close so their order is ready for collection when they arrive.

Voice is another technology that has potential to disrupt the way in which people shop. Sales of in-home devices like the Google Home and Amazon Alexa in Australia have been steady since they entered the market in July 2017 and February 2018, respectively. In the future, it is likely that shoppers will be able to compile a list and then purchase their shopping via a virtual assistant. 

How retailers can adapt

Consumers are more savvy than marketers give them credit for. When we surveyed marketers and consumers for our 2018 Salmat Marketing Report, we discovered there was a big disparity between how marketers thought consumers bought and how consumers actually shopped. 

Marketers believed that consumers have little control, purchasing more in-store than originally intended (56% compared to 31% of consumers); make impulse purchases (54% compared to 24% of consumers) and generally go shopping for fun (50% compared to a mere 25%). 

If marketers are struggling to understand how consumers shop now, then they are likely to become more confused as the shape of shopping changes in the coming years. Investing in the basics now, will put retailers in a good position for the future. Establishing a strong eCommerce presence and online brand (using search) will form the basis of any digital marketing campaign.

But there is still a place for bricks-and-mortar stores. David Jones’ investment in its Sydney store — particularly the curation of its shoe emporium to include a vast array of international brands that have historically only been available online — suggests retailers are now taking seriously both the online and offline experience.

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About the author
Daniel Salter
National Sales Director - Lasoo

Having completed a Bachelor’s degree in E-commerce Daniel was first employed by IBM, which put his trajectory on the path towards Salmat, where in 2007, he set up Salmat's Digital Catalogue business with Paul Marshall and Matt Mason. Today, Daniel is a Business Consultant within the Group Solutions Team, where he spends his time looking for new opportunities to differentiate and innovate Salmat's Media business by analysing market trends and listening to what Salmat's retail customers want.

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