It’s not online vs. offline, it’s about convergence

This is a guest blog by Sassoon Grigorian, Head of Government Relations for eBay

The new retail world is convergence.

The Productivity Commission report into the Economic Structure and Performance of the Australian Retail Industry released in December is not about winners and losers; it is not about retail vs. online; nor is it about commerce vs. e-commerce; it’s about the new retail paradigm.

With more than 10 million Australians now shopping online, commerce has hit a critical inflection point; consumers are spending an average of one hundred minutes shopping online each week. They are shopping on their computers and on their mobile phones – on the bus to work, while watching TV, and while browsing in their local shopping centre.
The internet empowers consumers like never before with greater control and choice, but it’s only the savvy retailers that are embracing this consumer-driven change that will ultimately survive.

This has been reinforced with figures being released that retailers had their busiest ever period of online shopping over Christmas 2011.

Mobile phones will increasingly have applications that allow barcode scanning. Still in its infancy in Australia, these applications will allow you to scan an item in store and instantaneously, see everywhere it is available for sale online or nearby. You may be searching for a camera in your local store, the application informs you of another store selling the exact item at a discount, but you don’t want the hassle of going somewhere else. You decide to order the product on your mobile phone, and the retailer offers free shipping and they will deliver the next day. These scenarios will be increasingly common and can be achieved with current technologies that will continue to blur the line between online and offline shopping.

Australian consumers will continue to get smarter, and more demanding. They are now using their mobiles more than ever to make price comparisons, search product information and ensure they are getting the best deal possible.

Global financial firm Morgan Stanley predicts that within 4-5 years’ time, there will be more people using their mobile than the internet on their desktop to shop. According to eBay’s own research, Australia has amongst the highest smart phone penetration globally with 1 in 4 Australians regularly using their phones to shop online.

Online is not a competitor to traditional retail, it is a partner, that if fully embraced will guarantee future growth for retailers, large and small.

One of its key recommendations, the Productivity Commission recommended the establishment of a Retail Council of Australia to make recommendations on the future of the retail sector. That Council representation would certainly be strengthened with representatives from the online retail environment.

Multi-channel commerce is the biggest catalyst for growth in the retail industry today, encouraging entrepreneurship, enabling new businesses to emerge and compete with more established players, and opening up the opportunity to sell to a global customer base.

This in turn spurs long term economic growth. It also creates significant opportunity for established manufacturers; retailers and logistics providers who are prepared to evolve and meet the needs of this new modern day consumer.

To do that though, retailers need to embrace this new retail paradigm.

You can follow the eBay Government Relations team on Twitter at @ebaygr.

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