I think 2012 will go down as the year that we all realised retailing had changed, forever! Yes, I know retailing, like all business, keeps evolving but I think it really hit home last year that the good old days are gone.
But before you think I’m referring only to traditional retailing, let me assure you I’m not.
Sure, traditional bricks and mortar stores have been hit hardest but even online retailing is changing with many internet businesses opening physical stores.
In fact, online retailing is now being attacked by other types of online sales models like the “daily deal” websites, new "auction" sites, social media and other new business models so whether you like it or not, unrest is here to stay.
We live in an era where the barriers to entry of almost every business are being lowered. And just when someone thinks that their business is part of the “new world”, whatever that is, someone else comes along with something new and creates more unrest.
The point is that jewellery retailers often think their world has, or is, being turned upside-down by changes taking place across all traditional retailing. But the truth is, even online retailers are under fire from new technology.
For example, online retailers are having to make huge investments in their technology to accommodate the increase in shopping from mobile devices. Many websites that were viewed as “leading” or “cutting edge” just a few years ago are now passé.
One year on the internet is a little like a dog year!
Recognising that physical stores have an advantage over online stores - can that be possible? - for consumers who “want it now”, online retailers are rethinking their delivery options and trying to offer same day, or in some cases, two-hour delivery. They need to compete with bricks and mortar stores on immediacy.
Did I mention that unrest is here to stay?
Push and Pull
It’s been said that the desktop era is over, and we now live in the mobile device era. Mind you, there’s a difference between portable devices like tablets, and mobile devices like smartphones. The latter constantly know your location and have the ability to “push” location-based offers to consumers.
The media, and as a result, shopping, have broken into two distinct models – “push” and “pull”. I think 2012 was the year that social media, along with apps and mobile devices, transformed the way people shop.
Adoption of change takes time but as technology becomes easier to use, adoption time reduces, which increases the adoption rate, which then increases social change.
The interesting thing for business is that we often overestimate the short-term (it takes a little longer to do things) and underestimate the long-term (major change happens faster) which is why the current change in consumer behaviour seems to be happening much quicker than expected.
So what does all this mean for retailers if barriers to entry are continually being lowered and consumers are changing faster that you can say, “cash or credit”?
Well, that depends on whether you’re a traditional store or an online retailer.
Remember, I said that all shopping is undergoing great change. I suggest that most bricks and mortar retailers are better-off than they realise because they can offer a shopping experience that cannot be duplicated online, provided it's a good shopping experience.
Many studies have shown that people are not shopping online just to save money, but because the things that they expected with an in-store purchase (knowledge, expertise, customer service and fun) are not provided.
If all your business offers is a middleman service – the conduit for delivery from supplier to end consumer – then you can only compete on price. You and your business will simply be compared on price. That goes for online retailers too, and it’s a no-win situation; someone else can always be cheaper.
Therefore I believe, somewhat ironically, that the future for bricks and mortar stores is the good old days!
All retailers will have to offer a multi-channel approach for customers but traditional retailers must offer more than just a middleman service. They must revert to traditional retailing to cater for shoppers seeking knowledge, expertise, service and an enjoyable experience.
The great thing for jewellers is that they can easily create a point of difference not only by offering excellent knowledge and expertise but also by offering highly specialised product, unique to each customer.
This reinforces a personal connection between their purchase and a jewellery retailer; just like the good old days when it was a joy to go to a local store.
Ask yourself, is it truly enjoyable shopping at your store?
Better still, ask your customers, the ones that no longer visit your store, they may hold the key to your future!
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