The emergence of Internet retailing or e-tailing as is popularly known has been a, key driver of change in retail. The increase in the number of Internet users not only in the developed markets but also globally, has placed new demands on retailers. Online shopping facilitated by auction are the realities of retail. Internet savvy consumers understand the power to shop and buy on their own terms. Internet both enhances and competes with the store i.e. the brick and mortar experience. Comparison shopping is anew reality of the e-age. Retail Snapshot 1.2 focuses on some interesting findings of a research study presented at the World Retail Congress, 2008.
Retail Snapshot 1.2: Digitized retailing is the way of the future>
Contrary to suggestions that the online channel may soon prevail over bricks and mortar stores, new research commissioned by Visa Europe and announced at the World Retail Congress indicates that these two routes to market are likely to perform complementary roles. With internet sales expected to account for almost 20% of turnover by 2012–15, and websites becoming increasingly transactional rather than informational, we are also likely to see a rise in the application of technology within the retailer community. As a result, there will be a rise in automated self scanning, product tracking for inventory using RFID (Radio-Frequency Identification) and targeted promotions delivered directly to consumers while they shop. In addition, they are likely to have access to PC / web based facilities in store, giving immediate access to product and customer reviews.
According to “The store of the Future 2012 – 2015, a Visa Europe commissioned report by the Center for Retail Research, if we fast forward seven years, the fate of the high streets seems uncertain with over one quarter of retailers ( 28.7%) expecting a drop in store numbers. Stores are likely to change with 70% of retailer expecting to introduce new formats and more information services by this time.
Customers will be able to order on the website and pick up items in stores, whilst smaller stores may focus on services and information rather than on holding large inventories. Automated self scanning begins to loom large on the horizon with over 22% of retailers expecting to introduce this in some form. RFID tags are likely to be introduced by 34% of retailers to help them make better use of product inventory management and in future, it can be used to offer customer promotions, whilst almost 50% of retailers expect to use technology to send customer targeted promotions using demographics and loyalty cared information through email and tests.
Other key findings of the report which interviewed retailers across European countries include:
1) Almost 60% of retailers think the overwhelming purpose of retail websites will be transactional while one fifth see it as informational.
2) Around 60% of retailers expect their website ad physical stores to be similar, while almost 23% expect them to be completely different with very separate functions.
3) Of those who do not expect to achieve full consistency between websites and physical retail stores over half expect to be operating separate formats.
4) More than two thirds of retailers expect to launch new formats such as information services and local pick up alongside existing ones, with retailers in the UK and Netherlands being the likely to do this.
5) By 2012-15 over 71% of consumers are likely to carry out pre-purchase research using the internet.
6) 48% of retailers are expected to provide electronic devices for customers in the form of electronic kiosks or interactive PCs by 2015, with retailers in Sweden and Germany most likely to have introduced these technologies (52.7% and 52.6% respectively)
7) 48 % of retailers think electronic payments are important or very important in achieving customer automation i.e. self service, automated payments. The strongest view being held among those in the UK (53%) and Netherlands (50%).
When asked about the likely future adoption of advanced payment technologies, European retailers show a high degree of potential acceptance, particularly in the UK, of payment options such as contact less cards, multi application cards that can be debit or prepaid at will, key jobs and mobile phone payments.