Dion Chang unpacks why retailers should embrace an online presence
|Published
We’re living in convenient times where consumers are spoiled for choice when it comes to shopping experiences. Since Covid-19, many people started warming up to the idea of online shopping and, as it grows tremendously, retailers have no choice but to hop on the bandwagon.
Dion Chang of Flux Trends, a local trends analysis company that distils, translates and packages trend insights into business strategy, breaks down the trends currently impacting the retail industry and the importance of online presence.
He believes “seamless service and user experiences, considered design and a high-value shopping experience can draw customers from their hermit states”.
With the age of the “hermit consumer” heralded by publications such as The Economist, consumers continue to turn inwards post-Covid-19, spending more time at home and acting accordingly - shopping online, ordering groceries for delivery and turning to social media for inspiration.
“The Economist picked the term ‘hermit consumer’ at the end of 2023 and they reckon it’s a $600 billion consumer shift globally, and we can even see it in South Africa even though we might not have a mature e-commerce industry as more developed countries have.
“We’ve seen a quick uptake in terms of e-commerce and you could see that play out in the competition between the four major supermarket retailers battling for your attention and for that online presence and e-commerce because people want value and convenience,” said Chang.
While small businesses thrive in online shopping, a renowned local destination, the V&A Waterfront has noticed a slight drop in the frequency of shopping visitors, which is likely due to these general shifts in shopping habits and increased uptake of online grocery sales which has reduced the daily or weekly shop in favour of monthly shopping visits.
However, although there is a slight drop in frequent shoppers, their spend per head has increased materially which more than offsets the drop in frequency.
“People have migrated to online convenience purchases. For your groceries, things that you want to be delivered and there’s no real change. Obviously, with the physical stores, there is an advantage of more tactile things like buying clothing, shoes, and things that people want to see or try on because sizing is not always uniform in terms of online.
“So yeah, it depends on what that store is selling. With that said, your really big stores are going to need both physical and online presence because that is the nature of where the business is going,” Chang explained.
Adding to that, he said some giant retailers are still struggling to combat the two (online and offline experience).
“In the light of a challenging economy, there’s a lot of pragmatism so whether you’re shopping offline or online, people want a lot more for value. A lot of people are picking loyalty on service, so you have to have a homogeneous service whether it’s online or physical shop, I think people want retailers to go beyond.
“In terms of physical experience, it is beyond financial marketing. It’s about wanting to make customers feel like they belong to a tribe or brand. And online that also means fast response possibly a much more of a human response rather than just coming up with algorithms and bots that will answer your questions.
“So it’s return, service, value and all of those things and I think the challenge is to have that blended service level, especially when times are tough and they are tough at the moment,” he said.
To give consumers the best of both worlds, most retailers now offer buy-online-pick-up-in-store. This helps customers take advantage of online specials and also allows them to browse in-store specials when they pick up their items.
That way, the retailer wins in offering both online and offline experiences.
“Tech-savvy shoppers are becoming centre stage, and demand is high for retail that seamlessly straddles online and offline spaces.
“This form of phygital integration sees the physical store meet the online in a way that caters to the unique needs and expectations of different generations,” Chang added.
And if you are social media savvy, you would’ve noticed that most brands use social media to promote their products.
For example, most hair and fashion companies have a huge presence on social media. They use apps like TikTok to show off their products, which also helps with engagement and answering frequently asked questions instantly.
“Livestreaming e-commerce is gaining traction in the retail landscape, merging entertainment with shopping in a dynamic, interactive format on social media platforms like TikTok,” said Chang.
Furthermore, he states that there should be an online presence for all retailers, specifically social media presence, as a convenient and accessible option for small retailers to engage in online shopping.