Aussie retailers shouldn’t necessarily jump on the same e-tailing bandwagon as US counterparts , an Online Retailer conference in Sydney was told yesterday.
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So says respected Forester ecommerce analyst. Sucharita Mulpuru, who gave some valuable insights into the US market and F-Commerce, showrooming and why the darlings of the Internet aren’t always right, yesterday.
The analyst cited some of the top errors US retailers have made – including ‘jumping on the Amazon bandwagon”, over embracing apps, blaming excess taxes and ‘showrooming’ for your woes (hmm, sounds familiar) .
(And if anyone is unfamiliar with the showrooming term, it’s where consumers check out goods in a brick and mortar retail store, then buy it online to find a lower price).
These latter woes in particular rings strongly here in Oz as we recall the furore Gerry Harvey and his High Street colleagues caused when they demand the government drop the GST tax threshold to under $1000 for online goods purchased from international sites.
The US is always flagged a few years ahead of us Aussies in the online retailing space, but the Yanks may not be so avant-garde after all, says Mulpuru.
But they must be doing something right as online retail has increased share by 6% in the US.
So stop whinging, as these aforementioned woes have been thrashed out by US retailers long before. (Its worth noting Harvey and Co have been quiet since the backlash erupted among consumers fed up with paying far too much for consumer items anyway).
Also another vital error – “believing the supernovas are best to crack the local market”. So who are the supernovas?
Apple, Google, Amazon Facebook – the Internet giants that dominate the scene whether we like it or not.
While these stalwarts are “great repositories of information” and major drivers of traffic these obvious ecommerce platforms aren’t all they’re hyped up to be, says Mulpuru.
The quick rundown of the 4 internet commerce supernovas is this:
Google: accounts for half of all global visitors but “lacks strategic direction, Facebook’s M-commerce and ‘F-Commerce’ “failed to fly” and social commerce is “negligible” as it drives only 1% of sales, research shows.
Amazon “a force that belies its size” and “Amazon are akin to the new Wal-Mart” – even though it is smaller in size, says the Forrester analyst.
And the establishment of a Sydney based Amazon warehouse may be a “double-edged sword” as the e-tail kingpin often starts selling goods itself if its sees an online ‘partner’ making big sales on product lines as it did with PC accessories.
Amazon positions itself as a “partner” but ends up being a “competitor.”
Apple also has an annoying habit of being slow to respond to problems in its eco system and their terms can also often be a pain and everything on the app store is on their terms, which can be risky if you’re depending on just one mobile app to drive online traffic.
“Apple is not so much a gift from God but rather is The Godfather” says Forrester’s ecomm guru.
On the issues of apps, they’re not always as useful as they seem, even though 55% of online retailers in Australia are now selling via mobile-accessible sites, it was revealed yesterday.
But the Starbucks app, for instance, accounts for just 5% of its total transactions so its hardly the golden path to a successful mobile strategy.
The ecomm guru also gave some general tips to Aussie retailers:
– Have a holistic marketplace strategy:
Don’t just partner with one (i.e Amazon) – a lot of retailers are now starting to hook up with several marketplaces. Some retailers like Asos have even launched their very own marketplace, in order to avoid paying commission to Amazon and abiding by stringent rules, in the case of Apple apps rules.
She also cited new formats emerging like ‘Fancy ‘that lets retailers sell products that are similar to ones a consumer is already browsing online.
– Optimise for mobile web.
Its easy to say but hard, if not impossible, to do and mobile shopping may not live up to the hype.
Android is the “winning platform but it is fragmented” she warns. And there are also other OS to optimise, like Apple iOS, Windows, BlackBerry and so on which can be a major nuisance – not to mention a massive cost and time drain.
Instead of dealing with Apple some like shoe retailer Steve Madden retailer decided to optimise their own site for various OS.
“Optimising for all the different OS is starting to become unsustainable …and retailers are starting to realise this fast,” she warns.
– Be a fast follower rather than a beta partner. Don’t just be the first to market for the sake of it.
Mulpuru cites a case study in the US between two retailers – one who spent $5m on and another who spent very little.
But guess what?
Practically the same level of mobile traffic on mobile m-comm sites – just 1.5%
“So is the best mobile strategy just to not have one at all?” she asked the retail audience.
– Innovate and reinvent your consumer shopping experience:
There is still a lot of “hanging fruit” like email and payments which retailers have still not got sorted despite the advent of ecommerce as a major force – many are not even PayPal members, which is pretty basic stuff.
The key to online is also solving the “last mile problem” where a consumer buys the products but delivery is an issue.
Wal-Mart allows free pick up instore and in FedEx offices for those customers who live further away, which is cited as a good strategy by the analyst as it can help with that “last mile” dliemma.
(Most of us can probably recall abandoning a shopping cart as the delivery price was too high or too much trouble).
Targeted email campaigns to consumers are still “strong” despite the advent of other forms of messaging like instant messaging and Facebook, with many now received via mobile; it is important to optimise for that platform.
And “forget the sales tax arguments..change the store” and add new categories, says Mulpuru, citing Warby Parker in the US who has stores within stores and acquisitions and partnership with others is vital to increase footfall.
The analyst cites Walmart who acquired Aussie start up Grabble, which provides retailer with a point of sales app for purchases.