The retail landscape is changing. But like stones in an ever-changing current, established global players survive and set the new course, while smaller retailers, unable to adapt quickly enough, struggle to stay afloat.
Much has been made of the recent arrivals of Amazon and Alibaba to Australia and what their presence means for our retail sector. Is it a bane for smaller retail businesses? Or is it a boon in disguise? And if it’s the former, how do we arm local retailers so they can thrive in the new online retail street fight? Large e-commerce marketplaces like Amazon and Alibaba have dominated the global retail landscape for some time. They are perhaps the leading examples of the retail resurrection; the transformation of how goods are sold online.
But with rumours of falsified reviews, algorithms hiding the best deals for customers and allegations over the destruction of brand-new items, they might not be the perfect platform for either customers or sellers. So where does that leave smaller retailers, for whom the aforementioned practices are as inconceivable as they are horrifying? The problem for smaller retailers is, whether they sell through Amazon or go it alone.
On one hand, these marketplaces are established with a broad customer base and the potential to boost a small retailer’s reach exponentially. That’s an immense opportunity for smaller retailers who lack the capital or expertise to promote their products through traditional means. But on the other hand, there’s the cost and the loss of branding opportunities. On average, they charge sellers a 15 percent ‘referral fee’ per sale, on top of the existing monthly fees and more for advertising and rankings. That’s not an insignificant sum of money, especially for smaller retailers where every dollar is important. It also neutralises smaller retailers’ brand identities, meaning they’re starved of one of their greatest competitive advantages: their uniqueness.
But the industry is changing and in today’s competitive retail market, it is imperative that retailers transform their existing model by embracing the technology and tools that can help their businesses evolve and grow through digital means. And now technology is no longer the sole domain of global companies with deep pockets and offices full of experts. Democratising access to enterprise-grade technology has shifted the power of balance.
Online store builders are now as accessible and affordable as they’ve ever been, and are a great resource for helping retailers prosper online. They provide the same cutting-edge technology and infrastructure that giant marketplaces had once monopolised, while simultaneously allowing retailers to build direct, lasting relationships with their customers, retain more of what they earn and maintain all of their unique and appealing traits. It not only enables a brand to play in the marketplaces but also helps create their own online property.
Whether offline or online, the retail industry is undergoing a digital transformation. Even traditional brick and mortar businesses can digitise their operations and benefit from this wave of the retail transformation. Independent retailers are the fabric of communities and high streets across Australia―they’re unique, they’re personal and they’re vibrant. Indeed, 90 per cent of Australians prefer to shop for local products first and foremost, so there’s clearly an appetite for what Australian retailers offer. And that’s why, to capitalise on the demand that exists for their services, small retailers now have access to all the tools they need to digitise their retail business.
By establishing a digital presence, smaller retailers have the opportunity to expand their potential customer base beyond the traditional high street. They’re no longer limited by geography or physical access to customers. Instead, with technology empowering them, the globe is now their shop floor. Affordable, accessible technology is the foundation on which small retailers can create sustainable, robust and dynamic brand that can stand tall against mammoths like Amazon and Alibaba.
By Timothy Kasbe, managing director for Zoho in Australia and New Zealand & Global Large Enterprise