By Aimee Chanthadavong
It’s a known fact Australian retailers continue to lag behind its US and UK counterparts when it comes to new technologies adoptions, but it seems the slow uptake is working in their favour – although not for too long.
Speaking to RetailBiz, Andy Lloyd, NetSuite general manager of e-commerce products, said unlike US companies who rushed to buying up e-commerce Australians have taken their time and are able to do so with caution.
“When e-commerce came around everyone in the US went out and bought it, except the problem was that these systems operated separate to existing back office operational systems,” he said.
“But we have always had the belief your e-commerce is an important strategic part of your business. So by connecting your e-commerce system to your back end it enables you to do things like feature products on your site with more strategy based on things like inventory levels and margins as oppose to just listing products on your webpage.
“Then we have companies like Walmart now trying to solve the problem of how they can integrate their e-commerce with their old system, which is going to be a nightmare.
“So as Australian retailers are getting online for the first time they can do it with this awareness that online systems need to work with back end system. All different departments of a business should run on a single set of software.”
This caution is also a sound warning to retailers that at some point they do need to adopt some type of e-commerce system before it’s too late.
A joint research from NetSuite and the Australian Retailers Association, conducted by Frost and Sullivan, has revealed online retail spending – including purchases on local and overseas website – by Australians are expected to grow 39 per cent to reach $25 billion by 2015.
While more than 50 per cent of Australia’s 77,000 retail businesses have a website, only one-third currently accept orders online.
Mark Troselj, NetSuite APAC managing director, said that a successful omni-channel strategy will be the key to the survival of many Australian businesses in coming years, as the online environment accounts for an increasing proportion of overall sales.
“We’ve been very slow due to how we trade compared to the rest of the world,” he said.
“But what has happened in the last three to five years is the growth of e-commerce and the strength of the Australian dollar. For those two reasons, Australians have worked out that it’s cheaper to buy overseas when you compare it to what’s available locally.
“So at the moment when you see e-commerce in Australia it is being used more as adjunct to drive traffic in-store instead of being converged with the rest of the business. This is why we’re seeing pureplay companies like Avago and KitchenDirect superseding in success than the more traditional retailers.”
But the implementation of new technology is not as costly as it seems. While US companies like Nordstrom may have invested over $140 million to integrate their order management system with the inventory system and Toys ‘R Us order spent over $1 billion on order fulfilment, Lloyd said it’s a lot more affordable than many retailers think.
“Omni-channel is challenging for retailers as it forces them to spend money on something they don’t feel comfortable with and it forces them re-evaluate the role of physical retailing,” he said.
“But as with any change in any organisation it’s always tough. This is why we encourage retailers to adopt a common platform for all their systems – a chance many Australians retailers still have – so they have a common global visibility of their business from the inventory through to having a 360 degree view of your customers.”