Kiwi retailers struggling to compete with the growth of online shopping need to employ the same technology innovations as their U.S counterparts according to a retail marketing expert.
The general manager of sales and marketing at Reachmedia, David Nation, says many New Zealand retailers are already struggling – with the latest online sales figures estimated to be $2.7 billion per annum, an 18 per cent jump on the previous year.
He says our traditional bricks and mortar retailers currently face an “uphill battle” to win back foot traffic and have typically tried to compete by reducing costs and discounting.
But Nation warns this type of response has no longevity and challenges local retailers to adopt the U.S model by investing in the latest generation retail technology to enhance service levels.
In the States some larger retailers have already equipped their stores with geo-locating phone apps so consumers can track their location in store and be directed to the product they need. He says it’s this type of technology that Kiwi retailers need to utilise.
A recent study of 50 of New Zealand’s leading national retail brands revealed only half had a mobile optimised website and of those that did only 12 had store location functionality linking to Google Maps.
Nation says that integrating this type of functionality into smartphone apps and mobile websites will make significant differences to retail foot traffic and customer perceptions of the store.
He points to an example of a U.S pharmacy chain which has gone a step further and allows consumers to scan and send their prescription barcode so it is ready for them when they arrive.
“Pharmacy staff even bring the medicine to the car on arrival reducing the need for customers with sick children to get out of of the car unnecessarily,” he says.
This clever use of technology has even taken the age-old agony out of shopping for a pair of jeans says Nation.
One U.S chain store has installed a system which allows consumers to answer a series of questions and then utilises an algorithm to select a pair of jeans for the customer to try, he says.
“Another large beauty retailer offers tablets in store so if the product a customer requires is not in stock, it can be ordered from in the store and be despatched to their home, often before the buyer leaves the outlet” says Nation.
He says other American retailers are offering free WiFi instore as another tool to secure sales at the till rather than online.
“It’s a really smart idea, when the customers connect to the free WiFi, the store home screen pops up displaying specific promotions based on remarketing insights which recognise which products the customer has searched for previously.
“This has the added benefit of creating an element of trust in store with the customers, as the retailer is seen to be giving access to the internet allowing customers to freely compare prices,” says Nation.
It is this innovative use of technology that Kiwi retailers need to employ to provide a greater level of support to customers and lure them away from online shopping, he says.
“It’s a matter of identifying the gaps in the retailers service offering and using technology to fill it, common complaints include ; queuing to pay, not knowing whether a product is in stock, not being able to find a nearby outlet and lack of trained service staff. Kiwi retailers need to embrace technology and see it not as a threat but a complementary part of their business and one that builds brand loyalty,” says Nation.
Nation says in particular the rise of mobile devices in the shopping equation is an opportunity for local retailers to integrate technology into their service offering.
He says currently 77% of consumers will connect with stores via a store locator on a mobile device but only 1% will use a buy now on the same device.
“When a consumer browses on their desktop often it lacks intention to purchase, however with mobile devices the purpose is more clearly defined. The opportunity exists for retailers to better understand customer usage of mobile devices and increase sales conversions,” he says.
“With mobile devices overtaking desktops in the USA, it is more important than ever for retailers to develop strategies that marry the best of technology with personal instore service.
“In the US we are seeing more mobile coupons which are activated by push notifications when the consumer searches for a product or store on their mobile device, no paper is required as the customer simply scans the barcode at the checkout,” he says.
Nation says already smart local retailers like The Warehouse have seen the potential to grow instore sales by following the U.S lead and introducing new services which combine online shopping and the convenience of rapid instore pickup.
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