Management Memos

Making Measurably More For You Since 1985

November 2016

Arrival of the ROBO Customer
digital and In-store shopping

Concerns about the impact of the online shopping revolution on bricks and mortar retailing in Australia turn out to have been misplaced. Shopping centres are thriving, according to Scentre Group's chief executive, Peter Allen.

Allen points out shopping centres are adapting to new consumer trends and demands driven by technology. He says this is still only the beginning of changes to come.

Online shopping will continue to grow in Australia, because Australian retailers are behind their international peers in e-commerce. "But human beings are social animals," Allen argues. "We still like to get together."

InStoreThe role of the shopping centre manager in that sense, is to act like a giant curator - selecting the right mix of stores, and experiences, along with excitement, to attract people to visit. Rather than erecting fortress-like shopping centres with impenetrable walls (based on an ambition to keep clients shut within them as long as possible), the modern centre must have easy access in and out. It must be closely integrated with its local community.

A change rapidly overtaking the industry is the notion there should be any real divide between online and off-line shopping. Instead, it's all about using technology to make all shopping easier - no matter how or where or in what combination.

That includes ideas like click and collect - where a product purchased online can be picked up in-store. Retailers still prefer customers to physically collect their goods. That allows them the chance to "up-sell" more services or goods or accessories, while removing the relatively high cost of delivery over that "last mile".

According to Allen, leading UK retailer John Lewis does 30 percent of its sales online - much more than Australian retailers. However, customers who physically collect those goods in the stores then spend 30 per cent more.

SmartPhone"Thanks to the smartphone, we've created a marketplace connected 24/7 where consumers can shop for whatever they want, whenever they want it, wherever they are," says Michael Ford, chief executive of The Good Guys.

Yet while the company's website influences two thirds of total sales, about 85 per cent of visitors to the site say they don't intend to buy online.

He refers to it as the rise of the ROBO customer - Research Online, Buy Offline. "Retail is no longer about online and offline." he says. "There is no divide. Digital is simply an extension of the physical store, and the physical store is just an extension of digital channels."

Put like that, it sounds simple. Difficult for retailers to get right. But vital.

(This article is based on an original article written by Jennifer Hewett for the Australian Financial Review.)

First, there was advertising!

An essential part of running a successful business, is to build a base of loyal customers who will periodically buy your goods and services.

Even if you offer high-quality at very low prices, there still won't be any sales if no-one knows about you.

You will need a strong advertising campaign. But it will end. Customer Relationship Programs keep paying back as long as you keep working them effectively.

So make the most of your advertising. Make it the beginning of a powerful Customer Relationship Program

  • First, Attract Customers

A good advertising program attracts new customers, which you will 'capture'. Use them to build a loyal customer base over time. Loyal customers can be a powerful marketing tool in and of themselves. But that's just the beginning!

  • Look to Improve the Bottom Line

A successful advertising program will make you more revenue and profit. Once again, that is only the beginning.

  • Be Careful with Cost

There's no guarantee that the increase in income will cover the cost of the campaign. That's your judgement call. Remember, though, this is only the beginning. An effective customer relationship program is the goal.

  • Don't Fret the Competition

Your competitors may notice your advertising, and retaliate. That won't matter though. You're already way out in front. You're beginning a Customer Relationship Program.

  • So What's Next?

Setting up a customer relationship program will consolidate all the work you have done in getting this first batch of customers through your door. It will help you get them through the door again. That is its undisputed value.

It is, however, a complex web of legal issues, copywriting, and graphic design factors. Email brings along its technical issues too. What you need is a good helper to get you going.

Getting a supportive service company to help you is a valuable key to success.

(For more help, contact My Red Zebra here.)

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Any advice, information or comment contained in this document is general in nature, and should not be relied on as the basis for any specific commercial, business, employment, or financial decision. Specific advice should always be obtained for each individual circumstance. Accordingly any advice, information or comment contained herein is for general guidance only.


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