Mark Freidin

Internet retailing in Australia. Am I allowed an opinion?

People ask me lots of questions about my knowledge or what special skills I have that give me creative licence to write articles and opinions on the state of internet retailing in Australia. Well to tell you the truth I don't have any, and that's what my secret is. You see it's my ability to explore and ask questions about things I don't know about, or understand then group them together in some sort of logic (or illogic).

Shopping TrolleyI am passionate about internet retailing and selling online. I got hooked on the internet in 1995, posted my first website in 1997 (don't think many people visited it but I loved building it and updating it). In 2003 while studying a post graduate course part time, I chose a unit called internet marketing, the text book for the course was written by Dave Chaffey a guru on internet marketing in the UK. In doing the course I realised how little I really understood the channel, so I started asking questions, and reading forums, and asking more questions. (Dave Chaffey is now a colleague by the way).

In between all this, a national retailer approached me to research and develop an ecommerce strategy for them. Talk about striking gold, I was in heaven. At the same time I learned first hand the politics of decision by committee, the inability for bricks and mortar retailers to actually grasp the technology behind a website, the infrastructure needed to support it and what needs to be done to drive traffic to a site. Oh, I almost forgot, the issues between designer, developer, ERP integrator, senior management, and poor me, the arbitrator, the piecemaker and pacifier or possibly even the fall guy if and when things went pear shaped.

This really got me thinking about the rest of retailing Australia and their experiences or opinions in looking at or doing online. Was this possibly a reflection why online retail in Australia was really in its infancy? I started to research this; There were all kinds of excuses why online retail doesn't work. Let's look at some of the most common: 

  1. Australia not being a catalogue culture like the US. I thought this to be a load of bunk, the UK was not a catalogue culture and they rock online.
  2. Not enough internet users! Sorry 15.3 million users as of Dec 07 (74.3% of the population) is enough for me.
  3. Broadband uptake is weak. This may be true to a certain degree but look at these numbers 4,700,200 connections as of Sept 07, 23% of the populations  (a long time ago by web standards) - Stats from: internetworldstats.com

I could go on and on but you get the point!

So where has it gone wrong? I have read every article scattered over the web about this topic, and boy was this frustrating to find. I don't have a definitive answer and I don't think all these hypotheses although interesting help those wanting to go online, as a matter of fact they are damn good propaganda not to go online, and that's probably what the reason is. It's become a self fulfilling prophecy. The big names in retail don't go online because its not in their shareholder's interests once they got burnt first time round, so the shareholders nod dumbly and don't trust online because the big boys say it cant work. So when some retailers do go online and test the waters maybe they face this distrust that has been bred into these people.

Ok, you get where I am coming from (or not).  

I have therefore made it my mission instead to be a trailblazer and help find the holy grail of internet retailing in Australia, with my friends who have already gotten it right at Get Price, Catch of the Day, Deals Direct, dStore, directshop.com.au, Lasoo, Catalogue Central and all the rest of you that are selling on line and feeding your kids and paying your mortgages from your online incomes.

Instead of finding reasons why online retailing doesn't work, join me to share knowledge, come together and make internet retailing in Australia a success. I'm here for the greater good. I'll be passionately pursuing this topic regularly.


COMMENTS

Posted by Jonas Katzellenbourg, 26 June 2009

Great article Mark - it certainly prompts us to think about how we use the web not only in building brands but in building business!

I think you have forgotten some of the most important aspects of what drives Online Retailing and its success - Proposition and Experience.

Rather like Social Media or eCRM - eCommerce, I have found, is about re-enforcement, translating the experience of offline shopping, online.

People are always eager to 'get' a bargain, i.e. why places like OO.com.au and DStore.com.au have fared as well as they have in the eMarket Place. There is very little emphasis on the perceived 'value' of the goods or retailer, rather just on the bottom line price. For a stock clearance retailer this is a perfect but for a challenger tier or premium retailer this is brand poison.

I think in the cases you brought up of the UK and USA, regionalism plays an important part. I think it comes down to the psychology of the Australian consumer, unlike the US and UK we take our cues from the top of the market, not the bottom. Hence why premium tier retailers in the US, were the last to establish strong eCommerce propositions online, i.e Bergdorf Goodman and Barney's.

I believe you are extremely right about the self-fulfilling prophecy of doubt but perhaps for a different reason. Until premium tier retailers establish a size-able presence in the Australian Online Market place, eCommerce as a successful retailing option will remain limited because of the wariness of the consumer seeing the big guys in town not doing it.

What I have seen is that the most successful online retailers, like successful department stores, offer a restricted selection of goods that appeal to 40-60% of their stock. What I have seen of Australian offerings, is that, there is too much choice, too much variety and not enough emphasis on why to purchase from that retailer, or what the retailer represents. Something that is becoming more critical in this current economic environment. There seems to be a definite trend of people wanting to show that the recession is not affecting them or that they continue to belong to a particular 'class' also people are becoming more conscious of a Brand or Retailers origins and 'story'.

Similarly, the proposition of how they are retailing and advertising is inconsistent across all media. Most Australian eCommerce attempts have been out of brand guidelines, with little emphasis on getting the consumer to interact repeatedly with the site (i.e. the importance of re-inforcement), also the attempts have been poorly thought out and plagued by a lack of transparency in their operations.

Keep up the good work!

Posted by Scott Maxworthy, 29 June 2009

Great Article Mark, you're right - there is a fundamental vested interest in bricks and mortar and with that the old advertising channels still dominate the landscape - ie bang for marketing buck.

Change will occur when it is easier for consumers to purchase online then the local store - in much the same way as most of now days do our banking online.

At the moment when we think "local" in most cases the results are offline - a local plumber, a local mechanic, local hairdresser, the local chemist etc. It's hard to imagine the online ROI for these businesses. In the meantime online category killers emerge.

The tipping point for retail online adoption will be when most small businesses in Australia (new market competitors) have a web presence (around 30% at this time). At that time Google indexing on localised services will generate far more effective search results.

Remember, only a five years ago Yellow Pages dominated small business advertising space.

Posted by azappa , 29 June 2009

We really need to be discussing the following disiplines:
- Distance selling
- Managing online sales and what this takes away from 'real world salespeople'
- Sourcing product/logistics/delivery standards
when we talk online retail in Australia.

Without introducing and making these three topcis transparent and develop serious disciplines in them, online selling is only going to be for the brave and uniquily modelled.

Try searching for distance selling authored for the Australian market and see what you come up with - 0

Posted by Mark Freidin, 29 June 2009

azapa

Thanks for your comments (see above feedback). The reason for the coming into being of the internetretailing.com.au site is to address issues like this, i.e the soft areas of online retailing. Over time we will provide expert commentary, articles, meet ups etc to build around these areas. Thank you for being aware of these things, and pointing them out. If you have some salient points or a strong opinion, send me an email and we can explore this further.


CHAMPION IN FOCUS

Mark Freidin InternetRetailing.com.au Mark Freidin
Company: InternetRetailing.com.au
Position: Founder
Mark works with fast growing online and multichannel retailers. He assists in formalising strategy, structure and process...i.e operational optimisation. something most entrepreneurs don't or won't even think about until they stumble. Mark worked at Catchoftheday.com.au for 18 months to do this very thing Read Mark's full bio

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    What the US and UK experts don't know about Australian Internet Retailing, we do! -Resources, perspectives, knowledge and more for those wanting to know more about selling online. A place for vendors to show their wares and skills  More info & Contact Details



     

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