WNA Blog

Sun 21 Feb 2016

Disruptive Trends: The Changing Face of Retail

Business Planning & Strategies

The collapse of Dick Smith has highlighted that traditional bricks and mortar stores, and retail models are on the way out.

Consumers now purchase differently than they did 10 years ago with people taking up online shopping at an increasing rate. Australians spent over $18.1 billion in online retail in the twelve months leading up to November 2015. Online shopping is now 7.3% of all retail spending (1) with annual growth running at 16%.(2)

However, consumers no longer see retail as an either/or situation. Consumers don’t shop either online or in-store. They do both.

Where are we now

Consumers now:

  • Research products online before they go to a traditional store.
  • Check prices and check out competitors prices via their smartphones while they are in store.
  • Use social media for referrals or to research or discuss potential purchases.
  • Order online and collect instore.
  • Order online, have delivered to their home and exchange faulty items or incorrect sizing instore.
  • Try on or test an item instore and order online (either from the same or different retailer).
  • Order from eBay and collect at local hubs such as Woolworths.
  • Expect to be able to order online for same day or next day delivery if they are within a major city. This is especially true for millennials who have stronger instant gratification requirements than previous generations. (3)

Modern consumers now shop with a strong multi-channel digital focus. They see businesses as having one continuous presence, with the expectation that the business will have consistent stock ranges, policies and practices across their online/offline experience.


To capitalise on this trend, businesses need integrated stock, ordering and customer systems. Real time data becomes critical and every aspect of the customer purchase journey needs to be analysed to remove friction and increase seamlessness.

Businesses are starting to rethink their online/offline divide. One response is to reduce floor space and make the bricks and mortar purely the showroom – but with a twist. Retailers exploring this possibility keep one sample of each size/style on display to allow customers to interact and try on items. Once they commit to purchase, stock is dispatched for same day delivery to their home from a centralised warehouse or from back stockrooms. (4)

Other options include turning the bricks and mortar store more into an experience that can’t be achieved online. Fitters, personal stylists, coffee shops, play areas and new fitouts are being explored by different brands to bring excitement back to the retail experience and to draw people back into the store. (5)

Those businesses with a stronger online focus are exploring creating options for customers to buy/try/return, or offering subscription models where consumers receive specially curated products each month to either purchase or return. (6)

Having a simple website is no longer enough. If you are in retail, you need to rethink everything from the ground up. Do you really need a store? Does it have to look the way it used to look? What could you do to deliver a more seamless or exciting customer experience?

Further Reading

1) http://business.nab.com.au/nab-online-retail-sales-index-monthly-update-november-2015-14688/

2) http://www.ibisworld.com.au/industry/default.aspx?indid=1837

3) https://econsultancy.com/blog/66487-how-millennials-are-changing-the-face-of-retail/

4) The Hointer Experience: Changing brick and mortar jeans stores https://youtu.be/2ZjWwlzRYBM

5) http://www.bandt.com.au/media/blurred-lines-changing-face-physical-retail

6) https://econsultancy.com/blog/65655-four-online-retailers-that-offer-try-before-you-buy-fulfilment/

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