Retailers – Combat Overseas Online Sales Growth with Better Marketing!
Online sales figures for 2010 have Australian retailers worried. Late last year a selection of Australia’s top retailers including Myer, Harvey Norman, Target, David Jones and Borders lobbied the Federal Government in a bid to have the current $1000 tax exemption on online purchases abolished.
The strength of the Aussie dollar saw overseas online purchases through the likes of Amazon.com and ebay.com climb considerably with the latter reporting that Australia was its leading growth market in 2010. Australians it seems, like to purchase online, with clothing, electronics and hardware leading the way – so it’s no wonder the major retailers are making this desperate attempt to get the government to win back business for them.
The usual scaremongering phrase of ‘Australian job losses’ has been cast out too and there is a certain irony in major retailers demanding the Australian government act to stop consumers shopping online rather than buying locally to save jobs when the same retailers source the vast majority of their products overseas to the detriment of Australian jobs.
Most Retailers Don’t Compete On Price Alone – Online Is No Different!
Instead of wasting time lobbying the government and alienating the general public by seeking an introduction of a tax on overseas internet purchases under $1000, retailers large and small should look at ways to combat overseas competition through better marketing intelligence and significant value-adds to the product or service being offered.
In traditional, offline retail, price has never been the sole basis upon which rival stores compete – so why should online shopping be any different? Retail stores invest millions and even billions building brands and positioning themselves as leaders in their target market, applying the same rationale to the internet seems the obvious course of action. Retailing isn’t all about price – factor in the customer
service experience and real value for money!
Three competitive advantages that give Australian retailers the edge over online alternatives in the Australian marketplace:
Speed: Modern consumers are more educated and discerning than ever but importantly they are also more impatient than ever. If you can deliver a similar product in ONE DAY to the online alternative which can take WEEKS, even for a few dollars more, most consumers would take that option.
Security: The risk associated with online purchasing is still a huge deterrent for many consumers, and rightfully so – goods damaged or lost in transit, the wrong size/colour etc. After-sales service, warranties and consumer-friendly returns policies can distinguish domestic retailers from overseas providers. The last thing consumers want is to try tracking down a warranty or refund in a different time-zone and legal jurisdiction – it’s a nightmare! The majority of customers will pay a little extra for the comfort of knowing such a nightmare can be avoided.
True Total Cost: Consumers are often drawn to great prices on online auction sites but don’t factor in overseas freight costs. Your total price is never that far off online price plus shipping costs on comparable goods, so distinguish your price as being the true cost and emphasise free deliveries, if offered.
*Match and improve upon best practice and find new competitive advantages. Online marketing, like offline marketing is about communicating your competitive edge to your target market.
Three ways we believe Australian retailers can re-position themselves to deliver superior value to consumers:
A comprehensive cross-channel marketing strategy: Big retailers love to invest in lavish ad campaigns, celebrity endorsements and well-located superstores and their marketing budgets are rarely frugal but the nature of modern retailing demands a big marketing effort online too. Cross-channel marketing campaigns are the future of how businesses reach their target markets. Trying to monopolise the market place by inhibiting web-based retail is a narrow-minded mindset, which simply won’t work.
Get a stronger online presence: There is no reason why Australian retailers cannot match overseas counterparts in terms of online presence. Investing in search engine marketing and search engine optimisation campaigns puts your brand in touch with your target market faster than any other form of advertising. Not only that, they are willing and ready to spend as soon as the interaction takes place – something that virtually never happens with traditional media advertising.
Offer something extra like an in-store pick-up facility on online purchases: Offering something overseas stores cannot offer is an easy win for competitive advantage – rewards schemes and pick-up facilities are great incentives. A pick-up service would be particularly useful for clothing, hardware and electronics as the ‘touch and feel’ experience allows the consumer to check for imperfections or whether or not the item has the functionality or appearance they want.