At a time when discretionary spending is tightening, and the cost of doing business is going up, retailers must be more focused than ever on the ROI of their day-to-day operations and take advantage of any untapped opportunities to grow.
This is the topic of an exciting new video series from Shopline, a leading smart commerce platform that recently launched in Australia.
Over the next few weeks, we will be sitting down with a range of retail experts to discuss how retailers can meet customer expectations for seamless omnichannel offerings and position themselves for success, despite the economic pressures ahead.
In the first video in the series, Inside Retail’s managing editor of features and premium, Heather McIlvaine, speaks with Shopline’s country manager for Australia Jon Levy and Shippit co-founder and joint CEO William On about the state of play in online retail, and how retailers can level up their e-commerce offerings.
Here are three key takeaways from the conversation. You can also watch the video on demand here:
1. Tap into the online retail boom
Despite the well-reported in-store shopping boom, data shows that e-commerce sales have not returned to their pre-Covid levels, which means there are more people shopping online today than ever before.
“Over the last five years, e-commerce, which started at 12 per cent [penetration] has seen a massive uptick post-Covid, with it running at about 18 per cent of total retail sales. In the US, it’s close to 22 per cent, and in the next five to 10 years, it’s tipped to grow to 30-40 per cent as a percentage of total retail sales,” On said.
“So it’s a pretty exciting time to be in this industry, as the future is bright, and a lot of people become more tech-savvy and default online.”
2. Keep a close eye on the right metrics
While increasing advertising spend might be a perfectly reasonable way to grow sales when times are good, when times are tough, retailers must focus on different metrics to ensure they’re getting the most bang for their buck.
“It’s not just about attracting a customer once and selling and moving on. It’s about the lifetime value of that customer,” Levy said.
“With these times, you need to be very conscious of the cost of acquisition, be able to offer discounts to loyal customers, be able to offer layered discounts, have loyalty points and be able to leverage your existing customer base.”
Another cost that retailers should consider is their logistics. On noted that many retailers resist outsourcing their logistics to a 3PL due to the perception that they can do it better, but this is a mistake.
“I think the two big inhibitors [to a great online shopping experience] are either costs or capability,” On said.
“Assuming the costs are in budget or recoverable, the real question is how do you get the talent in to do the work? What I’ve seen a lot of retailers do is work with tech partners who know what best practice looks like.”
3. Expand overseas and explore other growth opportunities
As the saying goes, “never waste a good crisis.” As the world prepares for a tough economic environment ahead, it could be the perfect time for retailers to expand their business, either by going overseas or launching a new product.
On pointed out that Southeast Asia is home to a population that is twice the size of the US, with just single-digit e-commerce penetration, making it an enticing opportunity for online retailers in the Apac region. Meanwhile, Levy noted that there’s still a lot of room for growth in the domestic market.
“Try something new – try new product lines, even experiment with a pop-up store, where you can get some immediate feedback. These are some really powerful ways to understand and iterate on your offering,” Levy said.
Even something as small as implementing a clearer returns policy, or estimated times of arrival for shipping can increase conversion and boost topline revenue, while renegotiating agreements with suppliers and asking for cost savings, can help preserve margin.
Check out the other videos in this series for further insights.
