Every day I get an email from RetailWire, a daily online publication that is read by thousands of people in the retail industry. It’s the number one forum for discussions about hundreds of important issues and, even though the site focuses on general retail topics, what is about to be shared is relevant to every business in every industry, including jewellery.
A recent article by RetailWire posed a question about the emergence of virtual-reality (VR) technology and whether it will make bricks-and-mortar stores less relevant. The truth is that VR and augmented reality are just enhanced ways of viewing and experiencing products online. Yes, VR will change the way people shop online but it’s still ‘virtual’ and therefore not real – consumers can’t touch the material to determine the quality of the bracelet or ring they’re looking at through a VR headset; they can’t try it on either. So, how could this technology make physical stores less relevant?
The discussion of physical stores becoming irrelevant has been a topic of conversation since the first online purchase was made in 1994. According to a video produced by e-commerce software program Shopify, the first online transaction to be protected by commercially available data encryption technology took place on August 11, 1994 when a shopper paid the equivalent of AU$12.48 for a copy of Sting’s Ten Summoner’s Tales CD online. At the time, people said e-commerce was the kind of business that would never work; people would never buy online. That same year, American electronic commerce and cloud computing company Amazon came into the picture and, well, the rest is history.
Adobe’s research cites online sales from Black Friday 2016 in the US to be valued at more than US$3 billion (AU$4 b) and Cyber Monday sales, just three days later, also at more than US$3 billion (AU$4 b).
Market research company Forrester predicts that online sales in the US will exceed US$523 billion (AU$703 b) annually by the year 2020. In addition, the company predicts that online retail sales in the Asia-Pacific region across the same period – Australia, China, India, Japan and South Korea – will reach US$1.4 trillion (AU$1.9 t)!
Should retailers be scared? Only those ones who aren’t willing to change. Across all industries, business is changing. The old saying that the only consistency in business is change is true so retailers must get used to it.
Did ATMs eliminate bank tellers? Did video really kill the radio star when MTV went live back in 1981? The answers are no and no.
Maybe the consumer is migrating online to do more shopping and maybe this means physical stores aren’t as relevant to some shoppers as they once were but this doesn’t make retail any less relevant. The appetite for products is higher than ever.
What makes a retailer less relevant won’t be because sales are moving from in-store to online. Instead, it will be because that retailer doesn’t adapt to the way their customers want to buy. This is the same for any business – customer-buying habits are changing. Adapt or watch businesses die a slow and painful death. At the end of the day, retailers must be willing to change as their customers change.
By the way, experiencing VR is a must. The most amazing three-dimensional images and videos are on full display simply by putting on what looks to be a pair of goggles.