Lethbridge Herald – The closing of Future Shop stores across Canada illustrates the growing challenge to the traditional retail industry.
The challenge is being driven by the growing trend of online shopping, which is taking an increasingly bigger bite of retail sales. But the challenge isn’t unique to Canada, or even this continent. A report released in October 2013 by the Nordic Council of Shopping Centers, the association for the shopping centre industry in the Nordic countries, warned that online retail sales “pose a substantial threat to the industry.”
The report, titled “Online Retail – Threat or Opportunity for Shopping Centers,” said, “Those players that are unprepared and not already taking action to see off this competition may well be squeezed out. For those that recognize the challenges ahead and meet customers’ demands, there are more opportunities on the horizon than threats.”
Right now, retail stores might be hard-pressed to see the opportunities. Future Shop represents the latest in a string of recent store closures across Canada. Online shopping offers certain key advantages including lower prices and the convenience of shopping from home, and those are huge obstacles for retail stores to try to overcome. The Internet also offers consumers a broader range of choices than they will find in any store because the online “store” has no walls – or borders.
The Nordic Council report also says, “Within the next decade the first Internet generation will enter employment and start earning, buying homes and having children. This means that the retail trade and shopping centres will have to deal with customers who have grown up with the Internet. The following decades will see the gradual disappearance of generations unfamiliar with the Internet, to be replaced with ever more Internet-savvy customers. How these future customers will shop has yet to be seen.”
One thing that is already known is that many of today’s consumers are opting to shop online. Many retailers have adjusted to the trend by creating an online shopping component along with the traditional stores.
The Nordic Council report suggests stores can attract customers by offering attractive store concepts, and while it is talking about shopping centres, the same would seem to apply to stores in general. But perhaps the biggest advantage stores have over online shopping is the personal aspect. People can interact with store personnel, find out information about the product, have questions answered, and receive help with understanding how the product works, which can be especially important with technology items.
Another big advantage retail stores can offer over online shopping is the ability to provide quick customer service in the event of dissatisfaction with the product. For products purchased online, it can be a hair-pulling experience requiring phone calls or online messages that may or may not produce the desired results. An in-store staff can make such an experience much less frustrating for consumers, and that can go a long way toward building customer loyalty. There are countless local businesses that can testify to the value of good old-fashioned customer service.
While it’s true that today’s young people have grown up with the Internet, they might come to appreciate the experience afforded by shopping in a place where they can see, touch and try out the product, and receive assistance from a friendly and helpful sales person. That might trump the impersonal nature of an online purchase.
It’s an advantage that could be important if retail stores are to successfully compete with online shopping in the coming years.