Having seemingly perfected the design and allure of the modern day mall, large property developers and retailers are both fearful of and flummoxed by the online purchasing revolution. With billions of Rands invested in a mass of monolithic malls that stretch from Milnerton to Matatiele, retailers are understandably bewildered by the rally on on-line transactions. While high street retailers were intent on negotiating exorbitant rentals and price-perfecting their products to cover excessive operating costs, it appears that they failed to notice their customers taking to the clouds – quite literally. With the same breed of gilt-edged glam and rows of homogenized stores, it’s somewhat unsurprising that high street consumers have taken to online shopping like mall rats to a month-end sale.
With the obvious advantages of time-saving and sheer convenience, there are a host of other factors driving consumers to i-street. The relative ease of online credit card payments removes the mechanics of purchasing from the consumer – a somewhat double-edged sword for the compulsive shopper as online transactions only serve to disassociate the buyer from reality. That said, the online consumer is able to shop at leisure at any time of the day or night with shopping aisles and queues being something they might well tell their grandchildren about. Add to this free shipping and door-to-door delivery, and most people are left wondering what the mall appeal was all about in the first instance. Ease and convenience aside, the real value of online shopping lies in consumer empowerment through the likes of price comparison engines, product reviews, social media groups and after-sales service discussions in chat rooms. The new consumer is shopping in a truly global ‘mall-in-the-clouds’ where nothing is ever out of stock and everything is for sale.
Gone are the days when granny would drive from Checkers to Pick ‘n Pay to OK Bazaars to find the best bargains on butter or the lowest price on lamb. Technology is completely transforming the shopping experience and retailers are being, albeit somewhat reluctantly, forced to reinvent their raison d’etre. Modern thought amongst retail experts is that stores will mutate into mere showrooms for their available products and brands – a place where would-be consumers can experience the brand, touch the product and view the wares, following which purchases will be made online. This school of thought follows the rise of a new trend in high street shopping now dubbed “showrooming” – where people use their smart phones in-store to determine whether prospective purchases are available cheaper either online or elsewhere. Without discriminating, it appears that “showrooming” is an under-40 phenomenon, with Millennials and Generation Z being far more digitally connected than any other generation.
Although high street is under threat by recession, high rentals and the surge towards online purchasing, it certainly isn’t facing outright extinction. Experts believe that high street will evolve into an advertising place for brands, where outlets will need to offer consumers an engaging and exciting experience of their brand. The new high street showroom will need to employ visualisation technology so as to provide the consumer with an incomparable experience of the product. Digital placement of that couch in your lounge, simulated 4×4 trails in off-road vehicles, virtual dressing and hairstyling – this is the future of high street where outlets will be physical ‘brand cathedrals’ for the online purchaser.
One definitive fatality of the i-street revolution is the outmoded salesman who regularly knows less than the uber-informed consumer who’s price-checked, compared products, read product reviews and discussed the product on Facebook and Twitter no less. With the advent of this new breed of online consumer, it is somewhat disturbing that, according to research firm Accenture, 75% of retail executives admitted to not understanding the changes in online purchasing, whilst 4 out of 5 executives admitted to not taking advantage of opportunities offered by new technology.
When Jeff Bezos, a former hedge manager, wrote his business plan for amazon.com, he estimated it would take a decade to turn over $100 million. It took two years. Hailed as Silicone Valley’s greatest visionary, he almost embarrassingly admits that he only ever intended Amazon to sell books, and only to Americans. Amazon now employs 70 000 people, turns over $48 billion per year and has made Bezos a wealthy man with an estimated personal fortune of $21 billion.
Although Bezos is blamed for being the leader of the internet trend that is defacing local high streets, he defends himself by saying that Amazon is only forcing retailers to be smarter and more innovative – and one can’t help but agree with his sentiments. Boasting overly ostentacious interiors, ill-informed sales people, regular lack of standard stock items, congested queues, indifferent customer service and downright horrendous music, innovation is long overdue. Only thirteen years in, the 21st century has already had its share of revolutions, and the i-street revolution may be one worth watching.
Have a super day!
Categories: Lifestyle Financial Planning