I’d like to immediately call into question the distinction between online and offline retail. I’d be curious to understand how anyone could possibly justify the actual destruction of one over the other with any realistic data or a straight face. Physical retail stores are not dead and gone. That’s just not going to happen.
It may be looking that way in more advanced ecommerce markets like the USA, UK or even Australia (to name just a few). However this is definitely not the case in emerging markets like the one where I’ve decided to build an ecommerce startup; South Africa. Even in those more progressive ecommerce markets, I don’t believe that the physical retail experience is going to completely die out.
Recently one of the largest online stores in South Africa, Takealot.com, raised a funding round of ±$100m. That’s a lot of money in South African Rands (over a billion Rand) which is being put to use through acquisitions, marketing and I’m sure expansion in the coming months. But Takealot recently also launched an absurd marketing campaign using the hashtag #RIPTrolley.
A trolley is a South Africanism for a shopping cart that you put product into when walking around a store. Yes, there are still people who actively walk around stores when they want to purchase things. Crazy, but true.
Here’s the Takealot campaign
This campaign is flawed for a few reasons. The main one being the absurdly low volume of online shoppers actually making transactions on a monthly basis in South Africa. Yes, that figure is growing and some might even say at a rapid rate, but relative to the amount of money being spent daily in actual retail outlets in the real world, ecommerce is a speck.
Sure, it’s a clever way to tell the people of the country that ecommerce is here and a force to be considered. However, another reason that the campaign doesn’t really work is that it doesn’t solve one of the key problems that many South Africans face when it comes to online transactions: trust.
I’ve literally walked a customer through the checkout process, step by step over the phone only to have them exit the transaction at the final hurdle because they didn’t think that it was a safe transaction to make. They’ll happily give their credit card (with the CVV number on the back) to a waiter at a cheap restaurant, but my website is untrustworthy. Madness. Crazy or not, this is the situation we’re faced with daily.
So where to from here?
Shopping malls are where teenagers go to cause trouble and waste their youths. I hear you. I get it. I was there once too. But in truth, people at shopping centers are mostly there to shop. They get in their cars and drive all the way over to a big building filled with retail outlets that sell a variety of different products. And they repeat this process daily, weekly and more.
Imagine that a shopping mall is like Google, except in real life. It houses all of the items that consumers are looking for in one place. It allows you to enter one place and search for (and buy) a variety of things.
Shopping malls are the Google of real life.
The only major difference is that shopping malls don’t index the entire world’s retail outlets. Some would say that this is a problem. I would argue that this allows consumers to avoid choice paralysis (too much choice leading to no actual choice being made and no money spent). But that’s up for debate.
I do believe that the shopping mall is a massively undervalued retail space in the contemporary approach to retail and traffic to your product.
Currently my sock company, NicSocks.com, drives traffic by posting content, using social media to promote that content and our product line. It’s hard work. It’s really hard work. I’d go so far as to say that it’s probably the most difficult thing that we do right now; drive traffic to our shop.
If we had a retail outlet at a shopping mall we’d probably drive a lot more consistent traffic. Sure, there are always complications: Rent, staff, theft, stock management and more. But I’d be almost guarenteed to have a stream of people walking past my shop. Then the best I can hope for is that my product is good enough to make them enter the store and buy something.
It goes without saying that people like to buy items that they can touch and feel. This is the Touch Feely effect. Yes, I’ve just coined that phrase in relation to ecommerce vs real world retail.
The Touchy Feely effect is a strong deterrent for many online shoppers. I struggle to purchase suits, jackets and pants online because I am very pedantic about what the fabric feels like. If it’s itchy or heavy or thick or light or summery, etc, etc. There are a million different reasons for me to not buy something online and not being able to feel the product before I buy it is a major one.
In store, this is not a problem. I’ve often had people ask me to send them a sample of our bamboo socks before they buy them. Bamboo is a different fabric and one that consumers don’t come across very often so they want to touch it, feel it and experience the softness compared to their existing socks. This is the perfect example of a real world retail experience outperforming the online experience.
Now lets briefly discuss The Google machine.
You think it’s as simple as building a website that sells a product and then… BAM! People magically discover your website because the Google machine listed you, ranked you and rated you highly so it drove people to your website.
Most of the time you’re going to need to hire a “specialist” who is going to shovel shit in your direction and tell you what you need to make your website and ecommerce store “SEO friendly”. Just in case you are reading this and don’t know what SEO stands for, that would be Search Engine Optimisation. If I were an SEO specialist, that piece of information would have cost you $100.
Then, once you have listed in the Google machine, you’re still not on your way to customer heaven. You still have to fight tooth and nail with your competitors to bid for keywords, rank for search terms and get customers through Google to your website. It’s hard out there for a shop.
Ranking on the first 2 pages of Google is an accomplishments of epic proportions. Do not understimate this task.
In short, Google is a long term investment that takes years of work, content and trust to reap the benefits. Compared to a shopping mall where what you’ll mostly need is a the ability to pay rent and a bunch of stock to sell.
The only logical direction for this discussion to go is everywhere. You need to take your product to where the consumers are. Don’t let the platform or medium dictate where you sell your product. If the best place to go right now is online, then do that. If the best place to find customers is in real life and in an actual retail environment, then do that too. But do something, anything to make that sale.
Being a small business is tough. Those arguing about offline, online, inline, through the line and every other line should realise one thing:
It’s not about offline vs online.
For me, everything is on the line, all the time.
*header image courtesy of Pondspider