Melbourne, AUS (MyConsulting) August 25, 2013 – by Michael Arendt
Thanks to the Information Revolution, the world of retail is quickly becoming a very different place. Certain businesses are thriving while others die a slow death, hanging on to the last threads of profit available. Just while walking through my local shopping centre the other day, I was struck by how much the place had changed in the past decade. Shops had disappeared or scaled down, whilst others were the same as always. I credit (or is it blame?) the Information Revolution for these changes. The influx of modern information technologies and social media has given more power to the consumer, allowing them to choose what they buy, when they buy it, where it’s made and even the price they’re charged. It’s now more true than ever before – personal electronics dominate our lives. What’s interesting is how we might adapt to this in the future.
Kogan undercuts traditional store-based retailers such as Harvey Norman and Dick Smith
The online retailer Kogan Technologies is one of the fastest growing companies in Australia’s business history. Selling their products directly to consumers, Kogan undercuts traditional store-based retailers such as Harvey Norman and Dick Smith, offering prices that are far lower than their nearest competitors. They can accomplish this by eliminating all kinds of middlemen, from the wholesalers to the retailers and distributors. The only reason this shake-up of the supply chain is possible is the internet – the open nature of the internet makes it possible for consumers to interact directly with manufacturers, not only making purchases, but also offering feedback and ideas. Conventional retailers just seem to dabble or accept their dinosaur destiny. This is just one example of the online world permanently altering the face of retail.
Online stores and auction sites seem to be the wellspring of modern consumer electronics. As befitting their digital nature, many consumer electronics products seem to be primarily sold online. The effects of this can be witnessed in the dedicated electronics retailers Jaycar and Dick Smith Electronics, who also sell so-called ‘hardcore’ electronics components for hobbyists. Over the past decade, Dick Smith have relegated this latter category to the backburner and have focused almost exclusively on consumer items. Jaycar’s early adoption of online sales, as well as their continuous dedication to the electronics hobbyist niche has meant they have perhaps fared better in spite of limited and even non-existent advertising. Dick Smith, despite their sometimes provocative and vocal ad campaigns, seem to struggle a little more. Perhaps they should take a leaf out of Ruslan Kogan’s book.
Dealing with another human being, in the form of an agent, is worth paying for
Travel agencies are an anomaly in the modern retail environment. Five years ago, I would have bet travel agencies would disappear from shopping centres. Such standards as music shops (such as Sanity) and book shops (such as Borders, Angus and Robertson and Collins) have disappeared. But, travel agencies are surviving. Why? Simply by virtue of what they sell. Unlike many businesses going under, travel agencies offer services, not products. While it is now possible and indeed popular to organise overseas trips without an agent (just look at the success of WebJet), the human touch hasn’t quite left the building. People want to feel secure when traveling. Dealing with another human being, in the form of an agent, is worth paying for thanks to that sense of security. Travel plans are complicated things, and like many things in life, it’s important to leave it up to the professionals.
Have you recently received your car insurance renewal offer and felt ripped off? Online insurance services may make that feeling a thing of the past. iSelect and other online services survive by comparing rates and quotes from different insurance providers, suggesting the best option for their client. This is an incredibly clever strategy – clients turn first to the online service for convenience and value, whereas insurance companies need to keep their prices lower in order to remain competitive. After all, wouldn’t you want to look your best standing right next to your competitors?
The future will see counseling and relaxation tools or trips without any online electronics
Taking all of these remarkable changes into account, we have to ask ourselves the question – is there a future without mobile electronics? This is where it gets interesting. I’d say yes, but there’s a catch; only during specially selected vacations. Are you experiencing yourself, head down, watching your phone and being overwhelmed by the electronic impulse or addiction? The future will see counseling and relaxation tools or trips without any electronics devices allowed, focused on retuning your life without the influence of electronics. Of course, people will organise these sessions using their iPhones.
Yes, the retail scene is changing, for better or for worse. Only one thing remains constant – businesses will have to change to stay afloat, let alone succeed. The internet, online marketing and sales is absolutely crucial. Businesses that neglect it probably won’t last for long, unless they find a low-tech niche to bury themselves in. Take a look at the world of business online, bone up on how it works and apply it – that’s the best recipe for business success in the future.
By Michael Arendt Creative Director of Online Marketing Agency MyConsulting, Melbourne, Australia.