Red Zebra Business Centre - Management Memos
October 2012 Making Measurably More For Your Business Since 1985! Page 1
Time to Think About Trading On-Line


he new focus of retailing - and indeed, trading of all kinds including B2B - creates a need for new thinking, and new approaches to our trading task. Quite literally, the whole way of approaching the retail task, and the B2B selling and order fulfilment tasks has radically changed. Traders of all kinds must adapt!

Retailing Has Changed - And Not Just in Multi-Channelling!

The first goal in retailing has always been to motivate customers to come into our retail shops. That seems just as it should be.

Now things have changed  mightily, and in a reverse of that paradigm, our first goal is to bring our branded offer to the consumer.

This cross channel retailer that propagates this seamless branded movement across the channels recognises another important factor. The retail organisation structure of the past will not be satisfactory as the retail organisation of the present. It certainly will not live in the future.

Now the speed of change is rapid. Could you have imagined three years ago that about 60 per cent of Australians (and growing) own a smart phone and can purchase products directly from these devices?

Smart Phone

Could you have imagined that over 75 per cent of Australians have some presence in a social networking community?

These profound changes mean that a good trader in the future will need to be a connected, 24/7 trader, using all the touch points available to its brand from the physical retail environment, through to social media sites and an active web shop.

Can you imagine a retail organisation making use of a skill set that encompasses:
  • Social media planner, journalist, technical director and monitor manager.
  • On-line fulfilment, web shop designer, engineers, managers, planners, SEO experts, content managers.
  • Mobile technology planners, engineers, content managers.
  • Social community planners, social community marketing managers.
  • Cross channel event planners.
  • Content developers.
  • Cross Customer engagement and innovation leader.

Put differently, how many current traders of today are looking to embrace the new order of trading using an  organisation that has been optimised for the age which is now passed?

The author of 'Future Shock', Alvin Toffler, said it best when he asserted " The illiterate of the future will not be the person who cannot read. It will be the person who does not know how to learn."

That certainly applies to the trader who doesn’t embrace the learning and business development that is fundamental to a cross channel trading culture.
NAB Index Shows On-Line Sales in Strong Advance

On-line sales grow strikingly, while multi-channel marketing helps build shop sales.

The NAB On-line Retail Sales Index provides key insights into on-line spending in the retail goods space, capturing domestic and international trends, as well as regional and age demographic trends. It’s based on up to 2 million non-cash transactions per day, scaled up to replicate the broader economy.

According to the Index (NAB On-line Retail Sales Index), traditional sales totalled $220 billion in the year ended June 2012, with on-line retail spending at $11.7 billion - both traditional and on-line experienced strong growth rates in recent months.

The Index shows that domestic retailers remain the dominant force in on-line sales as retailers take a multi-channel approach by developing an on-line presence alongside a traditional store front."

Buying on-line

On-line sales growth recorded a recovery in June – lifting back up to +19% year-on-year

  • Australia’s total on-line spending was around $11.5 billion in the year ended June 2012. This level  is  equivalent  to  5.3%  of  traditional  bricks  &  mortar  retail  spending  (excluding  cafés, restaurants and takeaway food) for the year ended May 2012.
  • In June 2012, the NAB On-line Retail Sales Index rose to 189 points – up marginally from 187 points in May 2012.
  • In dollar terms, on-line spending grew by around +19% year-on-year in June 2012. This represents a significant strengthening compared with the previous two months (+14% and +15% in May and April respectively). Despite this recovery, the growth rate for on-line retail sales remains considerably lower than the levels from a year earlier (+32% year-on-year in June 2011).
  • On-line sales growth remains considerably stronger than traditional retail bricks & mortar retail – which saw a rebound in growth in May, up from 0.2% to 4.2% year-on-year (on a non-seasonally adjusted basis). After seasonal adjustment, the growth rate was more modest, at 2.8% year-on-year (compared with 1.7% in April).
  • Quantium’s analysis suggests that the traditional mid-year period of toy sales at Australian discount department stores appears to have spread to the on-line sector, with a notable pick up in stores for these items during June.

This means that the growth rate for on-line sales rebounded in June, counter to the slowing trend in recent months.

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