Not being online can be liberating

digital, shop, online, future, omni-channel, multi-channel, onlineThroughout the history of retail we’ve had the innovators, the fast followers, the consolidators and the lemmings. Someone pioneers a new initiative. A group of exploiters copy it without really understanding it. A clever group work out how they can improve it. And when it becomes a thing, the lemmings blindly follow it. Many of them over a cliff. This phenomenon can easily be applied to e-commerce or its later incarnation – omnichannel retail.

The current wave of opinion suggests that you cannot be a serious retailer if you have not enabled e-commerce.

Yet another example of group think, this herd mentality approach puts aside the simple law of economics that requires a compelling return on the cost, complexity and distraction that e-commerce demands to be enabled and maintained at a level that meets consumer expectations. In addition, it exposes all your pricing and inventory to competitors. Many of who are not retailers but low cost distributors, pirates and sharks.

E-commerce should not be an automatic inclusion in the operational armoury of all retailers but a carefully considered and well-resourced enhancement to a smart omnichannel business model. E-commerce itself is still constantly mutating and within the next five years will not resemble its current structure with the top three e-commerce brands alone already commanding more than fifty per cent market share (and growing).

There is no doubt that every retailer today needs a marketing strategy to attract customers and a sell through strategy that turns and clears merchandise through their ‘system’. But e-commerce doesn’t automatically follow. Bunnings for example has experienced strong offline growth for over twenty years simply through geographic expansion, marketing and merchandising strategy. It has only been since geographic expansion options have dried up that they have begun to move into e-commerce.

If there were no customer or business advantage that results in growing or supporting sustainable profit increase, why would you entertain all the inherent risks in e-commerce. Yes there are risks and big ones.

Retail businesses are at their strongest when entrepreneurial merchant culture develops a clear strategic framework that sets them apart from competitors and examines every executional option through that lens rather than blindly incorporating a series of copied enablers that add cost, complexity and risk without comprehension of how they fit and enhance the business model beyond what the technology vendors print on the label.

In the modern world of retail there exists an abundance of opportunity and options. Arguably to the point of confusion for consumers, suppliers and retailers.

The best of the best realise that what sets them apart is confidently selecting what to do and (more importantly) what not to do, to take control of their success. Otherwise the market – in all its ruthlessness – will do it for you. And that is a different kind of liberation.

Peter James Ryan is a retail expert and head of Red Communication. 02 9481 7215 or [email protected].

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