When it comes to “disruption”, there are very few sectors more in the gun than traditional retail.
Speaking at the Online Retailer Conference & eCommerce Expo in Sydney today, MP Paul Fetcher, Parliamentary Secretary to the Minister for Communications, today had a few choice words for Australian retailers and where their future lies.
Along with the internet, Fletcher said that disruption to the online retailing sector has been primarily impacted by two main factors.
“For many years Australian retail was somewhat behind the world’s best, and secondly… Australian customers have become much more sophisticated and demanding over the last 30 years or so.
“Until the 90s, the Australian retailing industry… was to a significant degree immune from international competition. Most Australians had little practical opportunity to buy from overseas retailers, most did not know what they were missing out on.
“Retail in Australia was particularly vulnerable to disruption from internet-based offerings and that venerability has been reinforced by Australian customers demanding a much higher level of service.”
Fletcher also shared his five predictions for the future of retail in Australia.
1. Online businesses will continue to exploit the internet’s potential for customising and serving specific niches.
The minister referred to Disrupt Surfing, the startup which allows customers to order surfboards online with customised designs as an example.
2. mCommerce (mobile commerce) will become increasingly important.
“The Chinese market offers a glimpse of the future,” he said.
“Online consumer spending in China is growing at 50% a year and it’s increasingly driven by consumers using mobile devices rather than PCs.”
He referred to Alibaba’s transactions, where over 40% are made on mobile devices.
“With smartphone penetration as high as it is in Australia, clearly mCommerce is an important area of potential here as well.”
3. Online retail will become an export from Australia.
“In a world with billions of consumers online, many Australian businesses are now able to serve markets that would have been impossible to reach 20 years ago,” he said.
“The (Chinese) market is worth AU$500 billion in online commerce in 2014, and we’ve been working to create new opportunities with the free trade agreements with China, Japan and Korea, and I certainly hope, and expect, that there will be Australian online businesses siezing some of those opportunities.”
4. New retailing opportunities will come from the Internet of Things (IoT).
“If the packaging of a good contains a chip which allows it to be tracked from warehouse to customer, that can give customers increased confidence when buying online,” he said, using G World Group’s “smart wine bottle”, as an example of a business using the innovation.
“With counterfeit products a big problem in the Chinese market, this gives consumers reassurance that the product is genuine and communicates valuable information back to the producer.”
5. The physical distribution of goods delivered online will improve.
The MP used Australia Post’s delivering tracking, mobile delivery management, 24/7 parcel lockers, and other services as examples of the delivery services Australians will come to expect from a retailing experience in the future.