Industry: Analysis
Crossing the digital divide
Now is the time for those retailers that haven’t already to take the step into the digital world, so systems suppliers tell David Pittman.
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or some independent retailers, the growth in online sales has caused major issues. Cheshire’s Rosebank Sports has previously told SGB Sports it can’t compete with larger retailers over the internet, not on price at least, while The Sports Shop on the Isle of Wight has said it has neither the resources nor the desire to start offering online ordering.
But for suppliers of e-commerce systems, now is a better time than ever for the independent sector to start offering online sales.
PureNet digital marketing manager Richard Smith says: “Five years ago or so, people started to realise the need to have an e-commerce presence. This is now going down the mobile route with more websites tailored to smartphones and a growing number of direct applications. Over the next few years tablets will become more and more important to the market as well as social networking integration, with people starting to offer more and more for sale through sites such as Facebook.
“Many can’t do without e-commerce. In a tight economy, the internet is giving people the opportunity to go online and shop around for the best deals using a host of proprietary search systems.
“The important thing is that e-commerce isn’t an insurmountable obstacle. Everyone can get involved and it doesn’t need to be expensive. Retailers can have a system built for them or they can sell online through sites such as eBay and Amazon.
“It’s not as preclusive as it used to be and small operators now have the opportunity to cash in on demand online.”
Tony Woods, sales director at Cybertill, says it offers different levels of system, right up to ones which are fully designed and implemented by its team so retailers have little to no extra work to do. “Some retailers are scared of e-commerce but they needn’t be, as there are many benefits. Our system can be integrated with stock management and electronic point of sale (EPoS) systems, which
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www.sgb-sports.com
are our primary services, and allow the retailer to easily control all aspects of their business.
“Retailers can then introduce offers they may be running in-store into an online shop, as well as run loyalty schemes both in the flesh and in the digital domain, which helps keep customers coming back.”
One concern that may be harder to overcome is that of direct-to-consumer (D2C) sales, which a lot of brands have started offering. There have been noticeable developments in this area recently, with both Nike and Columbia Sportswear, amongst others, planning to grow their D2C operations in the future.
Woods says some brands are ‘precious’ about their products being sold online, with some only allowing those with a physical retail presence to sell online while forcing others to sell online at the full RRP.
Mark Grondin, senior vice president of marketing at Shopatron, says this might be because the sports industry is one of the most active online, with online sales growing at a rate much higher than bricks and mortar sales in 2010. This is a trend Shopatron expects to see carry on unabated, particularly with the rising use of mobile internet through smartphones such as the iPhone, but one which he says Shopatron can help retailers and brands benefit from. “Our system is based on the notion that retailers still fulfil the orders for brands. When a customer places an order through a D2C site, this is placed on an exchange which authorised dealers can search to find orders they can fulfil.” The system then awards the order to the nearest retailer to the customer, and allows for either shipment or in-store pick-up of goods, which creates the opportunity for retailers to form a relationship with customers.
“Customers can shop online but still connect with local retailers. Retailers can build strong relationships with customers. And suppliers can sell online but push customers into the store where they buy more, so supporting the whole
chain.” Woods says
Cybertill’s system offers a slightly different solution by allowing back-to-back ordering, whereby a retailer’s website can link straight into the supplier’s system. By doing this, retailers can appear to be stocking the full range from a brand, when they may actually only hold a limited amount of physical stock in their store.
“This has the added benefit of creating positive cashflow, which is one of the big problems with stock management,” says Woods. “They are paid for stock before they order it which allows them to have better control of their financial comings and goings.”
Smith notes that there are some cases where e- commerce may not be suitable, as there are for the use of social networking, where if a retailer’s customer base isn’t present then it would be wasted. These are few and far between though, he says.
Grondin has a far starker message for the industry: “Independent retailers are critical in niche sub-categories. Take fly fishing as an example, which is struggling as businesses supporting the sport are dying out due to competition online, often coming from the brands themselves. Tennis is suffering from the same situation.
“Losing local retailers means you are losing the places where people can find out about and get into a sport. They can’t do that online, and the industry ends up losing invaluable knowledge and experience.
“The worst thing is to pull consumers out of a store. Retailers need to make sure brands are supporting them not competing against them, and suppliers need to make sure they are sending sales to retailers.”
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