Clicks and bricks – the future of retail

Written by

Andrew Millar


September 5, 2012

As I said in the last Bleat, the world moves in cycles… though I have to say that those waiting for Chardonnay to become fashionable again are in for a long time between drinks…

My point was that we’ve seen direct door to door selling give way to mass advertising that drove people to Emporiums (wonderful word), only to see door to door selling return heavily disguised as ‘social media’. And I raised the question: what’s next?
If all things old are new again, what is the new version of the department store? Because people will shop out of their homes again; we are ‘social animals’ and shopping is a social thing to do. We are all tribal at heart.

And we love to browse.

But how is that shopping experience going to be reborn…

So I wandered down The Mall to see if I could see signs of cracks in the pavement. And while I think the place is in dire need of a wash and brush up, there, plain as day, I could see the first waves of a whole new way of retailing shining through.

Nike… Nespresso… and soon a company Apple store… these are the forward guard of new selling… what we see here are strong international brands controlling their unique identities in retail spaces they own.

Department stores blend brands within departments, placing competitors side by side. In these new spaces an individual brand can control the conversation. Department stores have tried to protect their territory by developing a ‘store within store’ strategy. But this has had only limited success. People are not shopping at these big Palaces of Retail anymore.

Since the GFC, consumers have vowed never to pay full retail again. And local mixed brand retailers are feeling the effects of people using their stores to ‘try on’ goods with the explicit intention of going on-line to buy at the best possible price. Local loses out.
But having company-controlled stores means the brand wins either way. Buy at the store or buy on-line, you are still purchasing an Apple product.

They have control of pricing. They have control of model run-outs. And they retain control of their sales force.

This ‘showroom’ mentality is one of the ways to combat growing on-line sales. It is predicted that the amount of money spent on purchases via the internet will grow to $33.3 billion by 2015. And with the introduction of the National Broadband Network, it’s only going to get bigger.

For a while anyway, brand retailers know that the future is going to be a combination of clicks and bricks…