The announcement that Bose intends to close 119 stores across Australia, Europe, Japan and North America should come as a warning to offline retail outlets. Online shopping is far surpassing walk-in outlets.
According to Google, interest in the Black Friday sales eclipsed Boxing Day and reached record numbers in Australia in 2019.
While traditional big box retailers like Harvey Norman and JB Hi-Fi have seen interest in Black Friday nearly double year on year, online interest in Harvey Norman on Boxing Day was down 5 per cent from last year and JB Hi-Fi only saw a modest 10 per cent increase.
Searches for ‘click and collect’ also reached new highs, which confirms speed of purchase and low friction sales processes are the path to more revenue whether you’re a play online retailer, bricks and mortar outlet or a hybrid.
Job losses can be minimised if retailers maximise sales from their online outlets. This is an important consideration when you take into account the implications for the Bose employees currently working in the retail outlets.
The rise of online shopping
Agile retailers, irrespective of size, are already taking advantage of increasing online spending by analysing the online shopping patterns of customers and making it as easy as possible to find and purchase the right product. Often minor changes can result in basket sizes doubling with minimal additional costs.
However, simple retail practices that have been developed for decades in offline stores are not being transferred online.
For instance, many retailers ‘mystery shop’ their walk-in stores but very few apply the same practice online. An online mystery shopper can often identify major blockages impeding additional purchases.
Recently, we did an online mystery shop of a client and found it was very difficult to locate the checkout. How ludicrous would it be if you went shopping at Bunnings but couldn’t find the checkout? It’s amazing some retailers sell anything online with what they make the customer go through.
When you walk into Bunnings you are not met with a sign directing you where exactly to shop yet so many ecommerce sites have a ‘shop now’ or equivalent banner on their home pages. These design elements on retail sites are indicative of where ecommerce is not understanding the customer psyche.
Offline retailers don’t make you navigate past a series of billboards, banners and pop ups before you can actually find a product. If they did, they would lose sales. Conversely, when these things are removed from ecommerce home pages, sales go up.
Customers want to find what their looking for, understand the cost, make a decision and check out as quickly as possible. No one likes to be kept waiting.
Offline this is achieved through staff, store greeters, a logical store layout and clear ticketing. Ecommerce sites can achieve a similar experience by having a fast loading site, making internal site searches prominent, having clear navigation, making shipping costs prominent during the buying process and checkouts that are simple and fast.
When the buying process becomes quick and simple, not only do transactions increase but so do basket sizes. If it’s a convoluted process to find a product, understand what it costs and put it in the cart, research has shown that customers are going to buy fewer products.
One simple mindset change for online retailers that would begin the process of increasing sales, is to stop treating your home page as a shop window and start treating it as the front counter of your shop.
More online sales means more jobs for packaging, delivery and manufacturing. Closing the bricks and mortar store doesn’t have to be doom and gloom. However, capturing additional online sales in a competitive environment needs more analysis of online consumer browsing and purchasing habits.
So, the challenge for Bose and other retailers is to keep the online mystery shopper approach and to keep refining and adapting the online retail environment to suit the customer rather than the website designer.
Jim Stewart is the CEO of StewArt Media.