Is Internet costing jobs and winning the retail war?

By ALINA TSEBRI
Why do people choose to shop online?
THE increase of online shopping is partly due to the savings, flexibility and a large variety of items that are provided to consumers who choose to now stay at home and shop at a click of button. This combats the parking fees, busy centers and large queues, providing convenience for busy lifestyles. Over the past decade, online influence has shifted the way that people choose to shop and it is no longer the social experience it once was. A wider range of products, in many cases priced considerably less, are attractive to shoppers concerned with recent economic downturns.

“Sadly there’s a perception that everything is cheaper online, when that’s not necessarily true,” Scott Watkins-Sully says. Mr Watkins-Sully and his wife Michelle run Hoolahoop Classic-Clothing, a small shop which does business both in-store and online. He says that the time saved by shopping online is now spent on other recreational activities, introducing people to a wider selection of goods “without having to sacrifice the shopping experience”. People have found other ways to spend their recreational time and internet shopping affords them such time without having to sacrifice the shopping experience totally. It also introduces them to a wider selection of goods.

Media spokesperson for Choice Christopher Zinn said that the rise of online shopping “caught everyone by surprise” and gained publicity quickly but there still is a cost to shopping online as it does not provide the same guarantee.

What can retailers do to attract customers?
The decline in customer service standards now means more people are buying items online as there is no incentive to go to a bricks-and-mortar shop. In-store expertise is often lacking and consumers want more from retail staff who are often uneducated on the product they are selling.

A survey conducted by Choice for best retailers both in store and online showed that consumers will visit stores that don’t rate well for price as long as the customer service provided was helpful and knowledgeable. In total, 76 per cent of people surveyed rated the in-store environment and cleanliness important when deciding where to shop. Retailers also need to consider the environment around their retail space and how it might attract customers who not only want the products, but who also want a unique and social experience. Mr Watkins-Sully believes that “…it can take something as simple as decor, music, layout or the inclusion of a social space to make this work.” Mr Zinn suggests that the environment should be made more exciting providing “good service, interesting stock, and be realistic to what the price is and what can be found online.”

Are retail jobs at risk as fears of income loss rise?
An article by Jeff Kennett outlines the recent decline of sales in book retailers such as Borders and Angus & Robertson which resulted in more than 300 job losses. John McCarthy of The Herald Sun said that the number for Borders jobs lost was as high as 1000. ABS figures show that retail is one of Australia’s biggest employers providing full time and part time jobs for more than 1.2 million people nationally. Continuous shopping online can contribute to potential loss of jobs for up to 30 per cent of retail workers and the possibility of no replacement careers. The National Retail Association said that online shopping would be the cause of the loss of about 50,000 jobs in the next five years, and 2000 jobs had already been lost due to the large number of people shopping online because of the increased value of the Australian dollar. Retailers should be able to adapt to the changes online shopping brings, and be willing to compete.

Disadvantages of shopping online.
While providing convenience and affordability, some disadvantages of online shopping are apparent. Not having the ability to see and try the product before purchase leaves many going through the hassle of exchanging an item, which can incur high postage fees especially on products bought overseas. Other pitfalls may include hidden credit card fees and “the fact that exchange rates from credit card companies and PayPal are never as good as those published by the media,” according to Mr Watkins-Sully. Hidden costs aside, it is the personal interaction that disappears completely when you choose to shop online. Mr Watkins-Sully believes that shopping isn’t only about tendering cash and picking up your goods.

“People can really benefit from the help of genuine sales staff who recognise the importance of providing a genuine service, right down to recognising the individual needs of certain customers,” he said.

Call for tax on overseas purchases.
Big retailers are pushing for governments to impose GST on products bought on the internet. The current policy exempts internet purchases under $1000 from tax as opposed to domestic ones. The Federal government briefly considered imposing the GST on all overseas goods valued under $1000 to help retailers, but an angry backlash from consumers prompted a rethink. Mr Zinn doesn’t think that introducing a tax would decrease the number of people shopping online as most would still benefit from it. He believes that it could work “…in time when customs run efficiently…but now it isn’t worthwhile.”