​Bricks and clicks: Balancing digital and physical to win the retail game

Online shopping might be attracting more buyers, but bricks-and-mortar retailers are uniting technology with physical experiences in new ways with growing success

Shoppers are becoming more digitally savvy and ecommerce is disrupting the retail game, but while some Aussie bricks-and-mortar retailers are facing a meltdown, others who are embracing tech are fast-tracking their competitive reign.

We speak to digital marketing and retail experts to discover what the new digitally-enabled retail phenomena coined ‘bricks and clicks’ really means for the retail sector.

“Some successful bricks-and-mortar retailers are seeing larger profits and growing sales due to their adoption of technology to embrace the customer experience and their swift adaptation to new forms of customer promotion, engagement and conversation,” the Marketing Consulting Company’s founder Fleur Filmer, tells CMO. “While consumers are increasingly purchasing online, they will still generally use online for price comparison, reviews, to gather information about the product and source price and time sensitive promotions as well as to engage with the brand and its values.

“Regardless of our extraordinary and exponential adoption of technology, the fact remains that humans in general are tactile and like to touch and see the product before purchase.”

Retailers like Zara and H&M don’t even have an ecommerce arm yet are using the ‘bricks-and-clicks’ model to remain competitive and agile.

“Digital technology can be harnessed anywhere throughout the supply chain to provide insights into what customers want, increase efficiencies, and remain agile,” Experience design studio Hatchd’s director, Kristen Vang, explains. “Zara, for example, offers no ecommerce functionality in Australia, and very little globally. Yet the company is expanding its retail locations while posting solid profits. This is because the key to Zara’s competitive advantage is in its agility to respond to customer needs, which is driven by the use of technology and data insights throughout the supply chain.”

Weathering the Amazon storm

Amazon has now confirmed it is coming to Australia, which has many in the industry shaking in their efforts. But several experts remain confident traditional bricks-and-mortar retailers can weather the storm.

Those that have done so globally are the ones focused on offering shoppers a great experience as well as great products, research consultancy, The Leading Edge’s head of marketing, Katharine Milner, says.

“To survive in today’s competitive landscape, retailers that don’t differentiate on product offering, range or customer experience are going to have to compete on price alone, which will become a race to the bottom," she says . "If you ignore how customers experience your brand, you are basically choosing to compete on price and product range alone.

Amazon has confirmed it is coming to Australia, but experts are confident traditional bricks and mortar retailers will weather the storm
Amazon has confirmed it is coming to Australia, but experts are confident traditional bricks and mortar retailers will weather the storm


Research conducted by The Leading Edge revealed shoppers want convenience, and those that provide a convenient experience are currently growing their sales and market share, from Kmart to The Iconic.

“For example, Cotton On, Target and Kmart are up-styling and filling a niche in kids clothes in a cheap, fuss-free and convenient way,” she says. “So consider how you can provide a more convenient shopping experience, either in-store or through digital channels.

“This could mean making it easier for shoppers to find their size, alerting them to upcoming sales or offering to save their card details to remove barriers to purchase. These tactics are channel agnostic and focus on the customer experience, rather than taking a digital verses bricks-and-mortar attitude.”

The tactile customer experience

Head of APAC for customer feedback software, TruRating, Sophie Jillings, is another that believes bricks-and-mortar will continue to dominate the retail landscape for some time, due to the innate human desire to look and feel, the sensory tangible experience of shopping. Those that survive and thrive, however, will be those that embrace digital to optimise the customer experience.

“In Australia, the 2016 NAB Online Retail Sales Index showed online sales make up just 6.76 per cent of total sales,” she claims. “I think the traditional retail space is here to stay, it’s just much more likely to contain new digital interfaces - for example, virtual 3D displays of clothing on your body type, to drive enhanced customer engagement and personalised experiences.

“Realistically, success for retailers today means embracing the multichannel environment - operating with bricks and mortar stores as well as online. Rather than considering online as a threat, consider it an opportunity to showcase your brand and goods effectively to your increasingly digitalised audience, ensuring it is a seamless extension of your store footprint and is woven into a holistic shopping experience for your customers.”

CEO of the Winning Group and founder of Appliances Online, John Winning, agrees. He stresses traditional and bricks-and-mortar retailers need to continue to evolve, but that doesn't necessarily mean that they have to completely become digital.

“We have a very successful business that still to this day, despite having a digital presence, is not an ecommerce business,” he said. “If you understand who your customer base is, have a good tangible product and listen to your customers about where they want you to take that product and how they want you to evolve it to suit their changing needs as a consumer, then success will follow.

“Look at the business you've got, work out if there is a technology play that is relevant and if you can't work it out yourself, talk to your customers.”

While appliance retailers like Dick Smith started crumbling into administration, Winning, which was founded just over 10 years ago with a laptop, rented truck and 1300 number diverted to a mobile phone, has now grown into four separate business entities employing more than 500 staff across Australia. The Australian retail entity includes traditional bricks-and-mortar retailer Winning Appliances, pureplay online retailer, Appliances Online, clearance outlet, Electro Seconds, and national installation and logistics company, Handy Crew.

Founder of Winning Group, John Winning, explains why both his traditional and digital retail model works
Founder of Winning Group, John Winning, explains why both his traditional and digital retail model works

Winning attributes his business growth to keeping focused internally on staying agile and relevant to his customers, while continuing to test, learn and evolve.

“I use the term 'putting your blinkers on' - you think of a horse that starts in the gates and has blinkers on and as it runs the race it doesn't look left or right it just really focuses on getting itself to the finish line as fast as possible and that's what we do,” he says. “We constantly look internally rather than externally, I think that the more you look externally the more of a distraction you get and those that are confident and know what they're doing should be able to look internally within their own business and continue to evolve in the right direction and watch the customers flow in.

“So at Winning Group we won’t really look at any of these businesses, including Dick Smith and we seem to find that our strategy works and we set that once a year. We kind of give it a cross check every 6 months and then once that strategy is set we just absolutely just go for it, we don't bother looking left or right or worrying what the competition is doing. I think that businesses that look at what the competition is doing are just scared and don't know what they should be doing themselves and I see that as a sign of weakness and believe the businesses that fall over generally are the ones that are looking outside and trying to be something else that someone else is doing."

Up next: Ensuring you don't lose sight of the customer with scale, plus knowing when to stop investing in tech

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

Cannes Part 1: Why brands must put human interactions at the heart of their business

As a Media Juror at this year’s Cannes Lions, I was fortunate enough to attend the world’s most influential festival of creativity and listen to thought-leading marketers from around the globe.

Nickie Scriven

CEO, Zenith

4 creative skills that will be useful forever

In recent times, the clarion call from futurists, economists, marketers, educators and leaders the world over is one of slight panic, “The world is changing and you’re not ready for it!” And of course, they make a very good point.

Kieran Flanagan and Dan Gregory

Speakers, trainers, co-authors

Why defining brand strategy is vital to capitalising on quick wins

Big brands were once protected from small brands by high barriers to entry. Big brands had the resources to employ big agencies, to crack big ideas and to invest in big campaigns. They had the luxury of time to debate strategies and work on long-term innovation pipelines. Retailers used to partner with big brands.

Troy McKinnna

Co-founder, Agents of Spring, Calm & Stormy

Being an investor who has an understanding of the finance industry, I would question the validity of this article, judging by the impairm...

Rowan

How a customer-led digital transformation has helped this CMO generate $6m in incremental business

Read more

An interesting update considering that today is the easiest way it has ever been to measure contribution to the business as well as the h...

Frederic

State of the CMO 2019: Tenure shortens, pressure is on as marketers strive to demonstrate impact

Read more

I thought this was what Salesforce Audience Studio (formerly Salesforce DMP) was supposed to do. How are a CDP and a DMP different? I'm c...

Tony Ahn

Salesforce announces customer data platform

Read more

Well written Vanessa!! Agreed with your view that human experience is marketing's next frontier. Those businesses who are focused on the ...

Clyde Griffith

Forget customer experience, human experience is marketing's next frontier

Read more

Great tips for tops skills need to develop and stay competitive

Nick

The top skills needed to stay competitive in a rapidly changing workforce

Read more

Latest Podcast

More podcasts

Sign in