The War Between Bricks & Mortar and Digital Retailing
We live in interesting times, retail wise. Maccas has now added Deliveroo to Uber Eats delivery service.
Since October 2019 you can also have your booze delivered by Uber Eats from Liquorland. So, the big boys of retail understand that “Build it and they will come” is no longer the answer. The drive-through may have been revolutionary in the 60’s but the message from consumers is now “Bring it to me”. And the consumer is prepared to pay $5 - $6 for the service.
Even more revealing was the purchase last July of Catch of The Day by Wesfarmers. And at a handsome 13 profit multiple. Seen by many observers as a purchase of supply chain capability, Catch is a pure digital play and has a large database of active customers. That is why Wesfarmers paid a high price. These retailers have clearly done the analysis and reached the same conclusion. Bricks and mortar is losing the war. Moreover, it will not survive on its own in the long term. This has significant implications, not only to retailers but to shopping centre owners, property investors, logistics suppliers and the labour force.
So, what does all this mean?
All retailers must have a digital transactional capability. Facebook and a nice website will not cut it. Consumers must be able to spend on the site.
Clean data and proactive data collection will be a licence to play. Accurate customer and detailed information on their likes, dislikes and spending behaviour will be essential.
Customer intimacy will be a key competitive advantage, both in-store and electronically. And retailers will need to be consistent in style and “personality”.
Systems need to be slick, inventory accurate, processes flawless and consumers demands met on price, quality, availability and delivery time.
The good news is that the basics of satisfying customers hasn’t changed with technology. And if you aren’t getting the basics right, it won’t matter how you go to market.
Author: Bernie Bicknell, Partner nem Australasia
This article is based on research and opinion available in the public domain.