Retail Tech Is Blending The Offline And Online Worlds

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As Amazon prepares to enter the Australian market, many retailers are bringing their customers service and logistics systems up to speed. That means delivering any time, any place and any platform experiences where shoppers can pick up and put down transactions and switch platforms and devices as they see fit. I spoke with Shopify's GM for Shopify Plus, Loren Padelford about how retail is changing and what the company is doing to help their customers on the transition.

The company has seen significant growth over the last year - 50% year on year growth in Australia - with our region being a significant market for the company's Shopify Plus platform with 7% of the service's customers coming from here. As a result, Padelford said the company is expecting to double their headcount in Australia.

"Australians are great at picking up the mantle and solving their own problems," said Padelford. "Because of the distance to get anything into Australia from a goods and services perspective, we've seen Australians are more willing to start businesses and solve problems within Australia instead of hoping someone will ship a product in from the outside. As a result, it's a great entrepreneurial place".

The market growth Padelford sees is the result of a fundamental shift in how commerce takes place.

"There is no online or offline - there's just how people buy things", he said.

That means giving customers choice through online, offline, social media and whatever channel you can. It's about being where the customers are and not expecting customers coming to you.

Amongst those changes, said Padelford, are some interesting transitions. While the establishment of an online presence for traditional bricks-and-mortar retailers isn't new, he's seeing the reverse with online retailers opening stores and pop-ups that give customers a physical experience.

"You can't fight reality and you can't fight facts. There's no longer a single source of customer acquisition. It's no longer about having the best physical location. You have to be constantly experimenting and optimising your channels so customers can find you when and where they want to find you," said Padelford.

A number of well known brands in Australia have recently started using Shopify Plus, including Frank Body, Quay, Who Gives A Crap Toilet Paper, YouFoodz, Culture Kings and Baily Nelson. While most looked to the platform as a way to expand their businesses, there were some other observations Padelford made when visiting some of these new clients.

Many were moving from either bespoke systems they built or other applications didn't scale or offer the flexility they needed. As a result, they weren't able to meet customer needs. He noted many companies were fearful of major shopping events because of the risk systems would fail, resulting in not just lost transactions but damage to the business' brand.

The shift, said Padelford, has come from a massive reversal in the relationship between customers and retailers.

'You could go to a retailer and buy, as a consumer, what that retailer was selling at that moment in time. Now we all have super-computers in our hands. Smartphones came out and flipped the table. Consumers now have all the power. As a retailer, I have to figure out how to serve the consumer in the way they want," he said.

This has resulted in retailers, new and old, completely redesigning the way they interact with customers. Rather than take a transactional approach, they are now looking for an experience-based retail model.

For example, Padelford visited a one of his customers, Culture Kings. They sell what looks like a commodity inventory of t-shirts, caps, shoes and other street wear. But their in-store experience includes DJs and a barber's store so customers form a relationship with the brand that goes beyond products. The store becomes a showroom for an online store where customers can have the tactile and visual experience.

"It goes beyond the store. It became a story and a customer journey," said Padelford.

As for the future Padelford expects to see a lot more experimentation in areas such as augmented reality - a blended online and offline experience. He also expects QR codes to make a comeback, particularly now as Apple has integrated a QR code reader into the latest version of iOS, driving a rapid-checkout capability.

"The real future will be the ubiquitous experience. I go online and buy something. I go to the store and they pull up my profile and know everything I've bought online, everything I'm interested in offline and there's no disconnect between my physical life and digital life".


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