How multichannel digital strategies will impact the Australian retail market

A survey conducted by CBRE of 50 leading international retailers has idenitied the impact multichannel digital strategies will have to increase overall revenue of their business and how it could have implications for the Australian retail market.

The research found that as a direct result of their digital strategies nearly all retailers (87%) feel they will see an increase in the overall revenue of their business, with the majority (80%) expecting an increase in foot traffic in stores.

A significant amount of retailers (40%) anticipate a need for more stores in the future and expect to increase store openings.

The majority of retailers will increase store openings and seek to create larger experiential stores to drive footfall in 2014 as a direct result of their multichannel strategies, according to a new study by global property advisor CBRE.

Nearly all of the retailers surveyed (85%) now have a dedicated resource to run their digital strategies and the vast majority (87%) operate a transactional website.

Digital technology is also being used by retailers to drive customers to their stores via social media and the use of smart phone apps and geo-localisation.

This is a relatively new technology which gives retailers the ability to price differentially depending on the customer’s location and map a customer’s journey to, and in, a store.

The survey also highlighted that most retailers were seeking to create larger experiential stores featuring digital tools such as iPads for ordering online and digital screens to show the full range of goods.

CBRE’s National Director, Retail Services, Australia, Alistair Palmer said Australian retailers had been relatively slow to adopt online/multichannel retailing but were slowly catching up as a result of increased competition from international retailers from both a bricks & mortar and online perspective.

“Offshore retailers have been more sophisticated and much more advanced with their online platforms. For example, Zara's multichannel strategy is extremely well thought out as can been seen by their Facebook page, which Facebook page, which has 19.5million followers worldwide, allowing Zara to communicate regularly with their customers,” Mr Palmer said.

“In the digital age, it is more important than ever for Australian retailers to understand their brand and the way it engages with consumers. Advances in technology provide an increasing range of tools to do this, and consequently those retailers that do embrace digital technology will have the best chance of success. This is true throughout the retail spectrum, from food to fashion and from luxury to value.

“Successful digital strategies clearly require investment; not only the cost of technology, but also for hiring and training staff to implement this, and the reorganisation of the business model in line with this. This in-store investment in new technologies is essential in order to ‘stay ahead’ of the competition,” Mr Palmer said.

Stephen McNabb, Head of Research for Australia, said there were some key outtakes from the survey which would have implications for the Australian market.

These included the fact that while retailers were looking at larger, experiential stores, digital technology could lead some retailers to focus on smaller stores that would operate more as showrooms.

This in turn would have an impact on the logistics market, with the survey highlighting that some 40% of retailers anticipated having a heightened demand for warehouse space.