While many bricks and mortar retailers have been hit hard by the pandemic, there are ample opportunities to survive, and thrive, in this new age of ecommerce-driven retail.
While the shift to online shopping has steadily increased over time, the COVID pandemic accelerated this shift. However, I believe bricks and mortar retailers that can adapt, innovate, and diversify are well-positioned to bounce back during and beyond the pandemic.
First and foremost, it is important forbricks and mortar retailers to find ways to be more relevant in the eCommerce world. The rapid rise of online shopping, offering ease, convenience, and personalised experiences, means that in-store retailers can find it difficult to create a customer experience that competes.
While Australian shoppers will return to these retailers post-pandemic, online shopping is sustaining its current trajectory of growth and bricks-and-mortar retailers who don’t pivot their offering now risk being left behind.
The growth in online shopping has been exponential since the COVID-19 pandemic. Last year alone saw more Australians than ever shopping online. December 2020 saw a 55 per cent rise in online sales as 5.6 million households shopped online. eCommerce sales exceeded $52 billion, and experts predict this to reach $77 billion in 2024.
Here’s how bricks-and-mortar retailers can diversify as well as grow their ecommerce division to keep up with online players.
- Leverage marketplaces to save on costs. It is important for bricks-and-mortar retailers making the initial move to online not to blow out their budget. Marketplaces are a great introduction into eCommerce, particularly for smaller retailers. I’d encourage retailers to take advantage of marketplaces such as eBay, Kogan and Catch to start selling their products. In fact, marketplaces are growing popularity and proving to be a valuable avenue for small retailers. Globally, marketplaces grew more than 80 per cent last year, generating billions of dollars in gross merchandise value (GMV). The GMV per seller also increased by 24 per cent, highlighting how marketplaces can benefit a retailer’s bottom line.
- Offer more delivery choices. With an increasing number of consumers valuing speed and convenience, bricks-and-mortar retailers need to pivot their deliveries and returns to meet these needs and contribute to their own business growth. A range of delivery choices can also give customers more control over the online shopping journey. Retailers could consider carriers that offer more choice, such as same day, express shipping and alternative delivery options. Options such as click and collect can be more convenient for all parties, retailers, couriers and customers, and provide the expediency customers seek. As spending habits continue to shift online, retailers can also expect an increase in returns. Creating a simple returns process for shoppers can help increase buyer loyalty, and speedier reimbursements may motivate customers to purchase more.
- Use click and collect as the link between eCommerce and in-store. During periods of heavy restrictions and lockdowns, retailers are continuing click and collect services to customers even while closed. Drive-through and kerbside click and collect options are also being offered to ensure safe, socially distanced pick up of orders. Click and collect also allows retailers to service eCommerce customers while driving them in store. This provides further opportunity for the retailer to connect with the customer, build positive relationships and generate more business. At Hubbed, we found 59 per cent of shoppers who pick up their parcels from one of our collection locations, which comprise local retailers such as convenience stores, newsagents and other independent retail outlets, make a purchase there. It highlights how retailers can benefit from click and collect and give their business a boost. Bricks-and-mortar retailers would be able to reap similar rewards by becoming part of a collection network or including a click and collect offering in-store.
- Give bricks and mortar stores multifunctional uses. Bricks-and-mortar retailers can leverage their stores in different ways, particularly during lockdowns and restrictions.Retailers can ship orders directly from their local stores to make use of in-store inventory, while others may transform them into ‘dark stores’ to act as fulfilment centres for eCommerce orders during slow periods. As our country’s economy begins to recover and restrictions ease, bricks-and-mortar retailers can use their strengths to their advantage by offering unique in-store experiences for customers. These include experiences that customers wouldn’t get online, such as exclusive in-store sales, engaging events, or pop-up collaborations with other brands. These perks can not only help build customer loyalty but allow bricks-and-mortar retailers to continue to thrive without sacrificing their offline offering.
David McLean is founder and CEO of leading agnostic Australian parcel collection point network, Hubbed.