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Will global online shopping destroy retailing as we know it?

12th August 2011

Will global online shopping destroy retailing as we know it?

We are beginning to see changes in the behaviour of shoppers, now they realise what opportunities online shopping can provide. No doubt many have heard about the Adidas All Blacks jerseys that can be purchased for half the local price online overseas - but that is just the tip of the iceberg. An estimated 34% of all online sales in New Zealand will be going offshore in 2011.

The internet allows brand owners and product producers to connect directly with the people who want their services and goods. Google and Facebook help you find the smallest backyard designer or connect with the biggest global brands directly. James Gilbert, Director of Australasian ecommerce provider Solutionists, says that global courier services and downloadable intellectual properties such as books and music, have removed location as a competitive advantage for international brands. “Retailers can no longer use other brands to draw customers simply on the basis that they are located close by with free parking” Gilbert says, “Location just doesn't matter that much anymore.”

If this trend continues is there any future for New Zealand retailers? Yes, of course there is. For a start, there are some products that just don't work online - The $2 Shop for instance. Secondly, retailers have a unique insight into what their local customers really want. So the key is to use this knowledge to create products and services under their own brand that uniquely satisfy the requirements of their customer group, Gilbert says. “Many retailers are already doing this, some more than others, but there is certainly a trend towards retailers designing, specifying and manufacturing products under their own brand. For retailers who take this own brand approach, suddenly the world of internet shopping becomes an opportunity instead of a threat.” Gilbert explains that while there might only be a small percentage of customers in the world who want the same colour and style of winter coats as an Aucklander in August, even a tiny percentage of 2 billion global shoppers is a huge market. With a unique product or service offer, Google and Facebook will work for the retailer instead of against them.

Gilbert says it is equally important that your online offering is delivered at a world-class standard, in order to remain competitive in a global market. “The return on investment figures for many of our clients shows that retailers could expect to recoup their full ecommerce investment within 6 months of launch”. “While the cost of setting up an enterprise level webstore can be significant, it is nothing when compared to that of a physical store – with much lower overheads, and a much bigger audience.”

With an easy to reach global market emerging for New Zealand retailers, it's good news for those who change, and finito for those that don't adjust.

About Solutionists Ltd.:
Solutionists are a leading ecommerce and integration company with offices in Auckland and Sydney. They deliver world-class e-retail solutions based on best practise standards, which allow their clients to compete at an international level. Solutionists’ clients include Overland Footwear, Huffer, Barkers, Mi Piaci, Nicholas Jermyn Shirtmakers and Sabatini.

For more information about Solutionists visit www.solutionists.co.nz

ENDS

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