Adapt or die: the online shopping revolution

Written by Tim Blight

Writer, traveller, amateur photographer, teacher. Based in Melbourne and Lahore.

March 15, 2013

Upon my return to Australia several months ago, I observed a strange phenomena which had gripped the television airwaves. It took place while viewing a commercial for a popular electronics store. The advertisement claimed that one of the advantages of shopping with the store is that “you can actually go in and touch and try out the items before you buy”. In other words, it’s better to shop there than online where you wouldn’t be able to try before you buy (although you may just save yourself a whole lot of money). Advertising in Australia now reflects a new reality where companies fall into one of two categories; those who get it, and those who don’t. The company in the commercial clearly fits in to the second category.

Harvey NormanIt will not come as a surprise to anyone that online shopping is here to stay. But perhaps what does continue to surprise some is the extent to which online shopping is penetrating traditional market share, and the reasons for this paradigm shift. In 2011 the outspoken co-founder of Harvey Norman, Gerry Harvey made headlines for his tirade against the “un-Australian” act of online shopping. His campaign against ordinary people fairly seeking out decent prices for electrical goods had failed by mid-year, but this parochial sentiment is what stimulates the type of advertising described in the opening paragraph.

To older generations, the idea that a consumer wouldn’t need to “touch and try out” a product before buying it may seem completely alien. However that ship has long since sailed. Really, when one is saving hundreds of dollars, choosing from a world of options (beyond the belief of some), and getting a superior product delivered right to their doorstep with a fair returns policy, who’s going to miss a few minutes of digit-on-whitegood pleasure? As scores of consumers raged on comment columns back in 2011, Australian consumers have voted with their feet, and given up on the relatively small range and high prices in the hokey stores downunder. Of course, there are cases where shopping in an actual bricks-and-mortar store has its advantages – grocery shopping places a certain amount of trust in fruit and vegetable selectors to choose quality pieces, and it is fair enough that people would rather do that themselves. Despite conceeding much ground in recent years (and the bulk of domestic bookings), travel agents are able to search for special deals and consolidate their commission to offer discounted packages. They also offer expertise and logistical support for multiple flight/hotel/service books on the one complex journey.

However in most cases, it makes logical sense for stores to compete with, rather than resist the online shopping revolution. Book store giant Borders shut down all of its Australian stores in 2011 – a consequence of online competition, a tough economic environment and people reading rather than buying in their stores – however it maintains a popular internet presence. And to offer a competitive service online, stores must stop seeing their internet presence as an afterthought, and rather central to their business – similar to what Westfield has done, where brands are offered through the website even if they don’t have a physical presence in any of their malls.

iPadFinally, the ignorant, paranoid, parochial idea that shopping in store creates jobs in Australia is simply misinformed and wrong. Most retailers offer in-store products that employ thousands more people overseas than they do in Australia – after all, it takes many Koreans to build a Samsung television, but it only takes one Australian to sell it in a store. A properly developed delivery chain would employ Australians on the ground. Moreover, the idea that Australians shouldn’t be contributing to other nations’ economies is insular and extremist – why not extend that attitude a bit further and suggest no-one travels overseas for their holidays, lest they spend money on someone who looks or acts differently? Spending money on ostensibly ‘Australian’ brands benefits foreign investors and shareholders in any case, and saving money by shopping online means Australians individually have more money in their pockets anyway. That’s certainly the reason why Australians are killing off their national airline internationally, by choosing low-cost carriers and Asian or Middle Eastern airlines, and no-one seems to have a problem doing that (for better or for worse).

Anyone taking a flight from southeast Asia to India would witness the hoardes of middle-class Indians carrying television sets into the cabin as their hand luggage. This is seen as a threat to local business by many Indians, however the Indian business sector has largely raced to embrace the change, rather than resisting it. As a result, online shopping is booming in India, and the nation’s economy is benefiting as a result. If India can embrace such a quantum shift in retail habits, surely Australia can somehow pluck up the courage.

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