Why internet sales will continue to grow

online sales1Everyone’s circumstances are different. I happen to live in the Southern Highlands in NSW which makes shopping a challenge but I somehow think that I would be shopping more and more on the internet anyway – especially at this time of the year.

Just from a physical point of view, who wants to get in their car, drive to a shopping centre, battle to find a car space and then fight the crowds? Quite apart from the cost of fuel and trying to get service in store.

On Saturday night November 21, at 9.25pm I placed an order for an item from Kmart.

On Sunday morning November 22, at 10.48am I received notification that the item had been shipped.

On Monday evening November 23, at 9.15pm I received advice that the item was in transit.

On Tuesday morning November 24, at 9.12am I received advice that the item was awaiting me at our nearest post office.

One might think that a large company such as Kmart would be sluggish in their reaction to online purchasing but to the contrary. They deserve 10 out of 10 and a gold star. The service was terrific.

Terry Corbell, The Biz Coach, quotes some interesting numbers revealing that the increase in internet shopping among high income earners is almost double that of the lower income earners.

He also comments that retailers with multi channels fare better than those with just one.

What this all points to is that it would be brave (and silly) to predict where internet sales will be within say, the next five years.

But one thing that can be safely said is they will increase and not decrease.

Another interesting development which will affect retail is robotics.

Robots have filled 350,000 prescriptions without error at two hospitals in the US.

On TV last week there was talk of people being paid not to work as robots take over their jobs.

Try getting service at any big box retailer. It’s not easy and this is explicable. Costs have to be kept down. But imagine that there was a friendly courteous robot available for you to ask a question. One so clever that it can give you advice and suggest other items for you to purchase. And when you have had enough, you simply say “shut up” and with no hard feelings the robot strolls off.

All futuristic nonsense you say. Well on December 13, 2013 I wrote about drones delivering goods to your door and this is now far advanced.

Where does this leave bricks and mortar and the trade unions? I guess the robots may demand award wages and penalty rates and have a super robot to negotiate for them!

More seriously, robotic staff will arrive. It is a function of time as is the delivery of goods via drones. Internet sales will grow to who knows where. Some shopping centres will become skateboard rinks, sports stadiums, hotels – who knows?

In May 2012 I wrote: The period 2010 to 2020 will be recorded in history as the decade in which the biggest changes in retail occurred in centuries. A bold statement and one I do not shrink from one iota.

I cannot be proven wrong for another four or five years, but change in the last three and a half years seems to indicate that we have a lot more in store for us (pun intended).

Stuart Bennie is a retail consultant at Impact Retailing and can be contacted at stuart@impactretailing.com.au or 0414 631 702.

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Comments

1 comment

  1. Brett Stevenson posted on November 27, 2015

    I think Stuart that one of the only certainties in 'retail' today is that consumers buy goods. Whether that be online, in store, omni-channel etc is not the question. Whoever sells to consumers need to make money (so, for example online sellers may not have the same labour and rent costs as a traditional retailer, but they certainly will in terms of IT and 'administration' costs) and its up to business owners to do the sums and see what works for them. A standard measure of feasibility is to ask am I going to get at least 20% return on the money I am investing in this business. If not, then don't even consider it. And also what % of every dollar that comes in the door goes to profit for me. Apart from very very high turnover stores this needs to be at least 10% (I suggest) for anyone to consider going into business. Forget all the old benchmarks of % on debt, or staff etc. Just watch these two indicators and at least it might save some business owners losing money. Try this test on some well known retailers in the public arena. It's a good indicator of troubled times ahead for some, or of management greed with others.

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