As highlighted by Deloitte in it’s report ‘Move quickly to capitalise on online retail‘, the success of niche pure players is evident, from receiving venture capital investment, to being pioneers and innovators within the online space (e.g. mobile and social networking) and of course being able to identify gaps in the market and seize opportunities for success.
The question is… how will these niche pure players disrupt the retail playing field for traditional business models?
“Our Aussie retailers can’t take a‘wait and see’ approach on this one as they are already getting left behind,” warned Damien Tampling, National Technology, Media and Telecommunications Leader at Deloitte. “A rapid, small, but still meaningful investment in the space, is better than waiting for a perfect model that fully integrates with the supply chain, franchise model or in-store POS.”
“Grays Online, Catch of the Day and Ozsale are all online retailers that have been courted by venture capital style investors over the last 24 months. They saw the potential and moved quickly,” he pointed out.
In the report, Tampling outlines five key areas retailers need to concentrate on when moving their businesses online:
1. Structure operations in order to move quickly and innovate constantly.
2. Develop a focused product strategy and roadmap. The value proposition of ‘buying everything in one place’ does not translate online where customers can easily switch between multiple websites or apps in the same session.
3. Think through the best inventory management model – depending on the level of risk and the capacity to hold inventory, retailers need to weigh up the pros and cons of various models.
4. Create a plan for how the business will engage with suppliers.
5. Leverage customer data to create targeted and relevant marketing campaigns that drive brand and location-based engagement.
The report also highlights that in the current retail market, it is niche players that are setting an example of being flexible, agile and focused – traits which traditional retailers need to adopt in order to provide a compelling offering.
“There’s no doubt that competition will become more aggressive, and we are likely to see more players acquiring or merging to gain scale, grow or survive. So big retail must move quickly to develop and deploy a strategy that allows them to at least be in the market in a meaningful way,” Tampling said.
He also raised the questions with regards to the future of retail:
- Will the department store as it exists today disappear?
- How will the big retailers work out where to play?
- Could there be a ‘half-way’ house – a more showroom-type model for retailers, that ends in consumers still buying from them, but online from offshore DCs?
- Where will the start ups play next?
What are your thoughts?
Article by Nirosha Methananda
Nirosha is a content creator for The Media Pad, publisher of Power Retail. Coming from a marketing and communications background (in the legal, retail and online industries), Nirosha is excited to be able to put her knowledge and experience to work for Power Retail. Recently engaged, Nirosha is immersing herself in the joys of wedding planning! She is also an avid reader (of mostly fiction), always keen to get onto the golf course, likes to paint, tries to sing and is able to recall useless celebrity facts at the drop of a hat!