Reasons include the belief it is less risky for consumers, as returning products should be simpler and cheaper and that enforcing consumer rights is possible.
In addition, two major shifts in online retail have major potential upside for domestic retailers.
The first is a shift to purchasing that is more time sensitive. Up until now, online shopping seems to have been driven largely by the chance to save money and acquire goods that are hard to find locally.
The next phase is likely to be about convenience; making online purchasing easier than visiting the store. This requires distribution networks that can achieve next day or same day delivery. Large Australian retailers already have distribution networks that should give them a solid platform to compete on this basis.
In the United States, there has been a long debate — somewhat like our GST debate — about the application of state-levied sales taxes on online purchases. (Somewhat surprisingly, the Victorian state government joined the tax-free threshold debate just last week.)
It’s interesting that some US online retailers now appear to be trading off their out-of-state tax-free transactions against the ability to deliver more quickly, through greater physical proximity to their customers.
The second is the rise of the mobile internet, and its promise of nearly ubiquitous, always-on connectivity. Debates about online retailing, like many other internet related debates, have tended to polarise between “the online” and “the offline”.
As the internet has matured it turns out that most of the interesting stuff is about reconfiguring the connections between the offline and online worlds. In a dial-up environment, people “went” online; now they are more likely to be moving between the on-and offline environments; often using the internet to navigate and complement their offline activities.
The attraction of the mobile internet is not only the idea that it is available almost everywhere (in cities, at least). It is increasingly sensitive to place. The result will be lots of new opportunities for communication and commerce for traditional retailers.
The possibilities include helping customers to find stuff, allowing them to search store layouts, to order for in-store pick up, and to use their mobile phones to purchase in-store. The challenge for retailers is how to best integrate these proliferating channels with their businesses.
Many smaller Australian companies and start-ups are showing the way. They will help ensure that local retailing remains competitive in an increasingly dynamic environment.
Scott Ewing is a Senior Research Fellow at the Swinburne Institute for Social Research and at the ARC Centre of Excellence in Creative Industries and Innovation. Julian Thomas is Director of the Swinburne Institute for Social Research, and Professor of Media and Communications at Swinburne University of Technology. This article first appeared on The Conversation.
