The rise of the connected consumer

Forget the technology, it’s all about customer service.

shopping online with credit card through social media, cloud computing and e-commerce

Last week in Sydney the Federal government’s Online Retail Forum, set up after the first round of big-retailer complaints about Internet shopping, was held to discuss the threats and opportunities that lie in the connected economy.

The event’s location and timing, being held at the old Sydney Post Office the day after the Angus & Robertson book chain went into administration, was somewhat symbolic of the changes facing the retail industry.

Australia Post itself is a good example of a business dealing with change, their traditional mail business is shrinking while the move to online commerce is driving and growing their parcels business. As traditional post offices selling stamps become less important, new opportunities open in the logistics of getting physical goods to Internet shoppers.

The old post office itself is an example of that, as technology changed how mail is sorted and delivered the need for a big downtown building disappeared and today the mail service occupies a tiny corner of the massive building which is now a hotel and office complex.

How post offices changed is a big lesson for commercial landlords, and our super funds that invest in them. COSBOA’s Peter Strong pointed out on the opening panel how the business model of ever increasing rents forcing out smaller retailers and replacing them with cookie cutter national chains and franchises is one that is already struggling to cater for the online consumer.

Customer service is the opportunity missed by the big ‘bricks and mortar’ retailers, a physical store has the advantage of being able to deliver a personalised, friendly experience yet what we find when we visit a big department store or electronics ‘category killer’ superstore is service that often leaves much to be desired.

The participants of the online retail forum’s panels covered how the online retail industry is filling the customer service void; Mike Knapp, the co-founder of Sdyney’s Shoes of Prey, explained how their consumer friendly return policies encourage sales while logistics companies like DHL, Temando and Australia Post described how tracking the delivery of Internet purchases was essential for customer confidence.

Most importantly, much of the morning emphasised that e-commerce was only a small part of what the Internet has to offer the retail industry. The web has become a monitoring tool for both buyers and sellers as well as improving the supply chain and radically changing the marketing industry.

Google’s Jason Pellegrino explained how many of the US electronics chain Best Buy stores now keeps floor stock for consumers to feel and touch but then places orders through the net for delivery to the buyer’s premises. Not keeping anything more than display stock dramatically improved the efficiency of Best Buy’s stores.

Interestingly Dick Smith Electronics employs the opposite model, with their “click and collect” service customers can order online and nominate the store they want to pick up the product which gives the retailer an opportunity to cross or up sell.

Both models illustrate how retail can adapt and take advantage of shoppers using the Internet and with some creative thinking can open up new opportunities which enhance their traditional sales models.

The message from all the industry panellists at the retail forum was consistent; the net is giving power back to the consumer who is using it. For retailers to compete, they have to be dirt cheap or offer excellent customer service.

What the event showed is the customer is more important than the technology – the point of going online is about improving the offer to customers be it by cheaper prices, faster delivery or better service. If the technology happens to improve our margins then that’s a pleasant benefit as well.

Customer service is something our bigger corporations like the retail giants, banks and telcos have forgotten, it’s now turning around to bite them and that’s probably the biggest opportunity for the rest of us – to adapt technology to our business in ways that deliver a better product.

It’s more than just having a website and online shopping cart, these changes are affecting almost every business. It’s important we all think about how our ventures are going to adapt to markets where our customers have more power than ever.

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Author: Paul Wallbank

Paul Wallbank is a speaker and writer charting how technology is changing society and business. Paul has four regular technology advice radio programs on ABC, a weekly column on the smartcompany.com.au website and has published seven books.

7 thoughts on “The rise of the connected consumer”

  1. Superb post Paul! I really love your thinking on these issues.

    Isn’t it interesting how as the consumer-side gets more connected via technology, that in turn opens the world up for us for choice, increased competition on the business side, which in turn shapes how business does business with consumers.

    If businesses don’t answer the questions on how consumers want their business, when they want it, how they want it and why (purpose for longevity), they will fall victim to their competitors who are….and this is just the minimum standard to stay in the game.

    People, the business’s staff and stakeholders, that will keep businesses in the game in the long run. No app, tweet or status update can beat a personal uber-positive experience.

    Thank you my friend,
    Mahei

    1. Thanks Mahei for that kind comment. It’s fascinating how the human side becomes more important as technology becomes more critical to our business. It’s something to watch.

  2. Great post Paul. I have been shocked that traditional retailers are not working on improving their customer service dramatically, there is a big opportunity for training there!
    I am also exited about the great new online shopping sites, on the whole, experiences are just going to get better. Exciting times for customers!

  3. Paul

    Great post and thanks for sharing the insights. What I think retailers are also missing is the opportunity to connect ‘personally’ to consumers using online and social technologies. “Cheaper prices, faster delivery and better service” will be base requirements in the connected economy.

    The longer term winners will be innovative retailers who personalise interactions and deliver remarkable experiences by leveraging social technologies at almost no extra cost.

    Cheers, Iggy

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