Retail Management to Internet Retailers

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Since the establishment of the Internet, traditional ‘bricks and mortar’ stores, also known as store-based retailers, have been under siege by online retailers. As stated by Magner (2013), the next five years will observe an increase in online sales, domestically and/or internationally, as it provides consumers with a wider variety of products at competitive prices, no shop-trading hours and no GST payable on purchases made overseas which are under AUD$1000. Furthermore, the retail lifecycle for the majority of store-based retailers has hit the mature to decline phase. Magner (2013) states that a “slowdown [in] technological system changes and wholehearted market acceptance and market saturation of products” have been strong indicators for the store-based to reach the maturity phase. Additionally, the changes in consumer lifestyle, product range preferences, low-cost private–label merchandise and slow technological advances are factors preventing the sector from propelling into the growth retail lifecycle phase (Magner 2013). Examples of firms that have been affected by digital retailers are Myer and David Jones as they face disadvantages factors like high operational cost (i.e. labor and rental cost), low range of products in comparison to online retailers (Denness 2014). The example is further illustrated by Figure 1 (above) as it provides statistics for the falling revenue for department stores to digital retailers (NAB Group Economics 2014). Moreover, the averseness of larger store-based retailers to invest in online retail channel has resulted in an increasing number of competitors targeting lucrative Australian consumers. An example is UK-based fashion retailer ASOS, which launched a website dedicated to Australian patrons, ... ... middle of paper ... ...Retail, viewed 2 April 2014, . Levy, M & Weitz, B 2012, 'Retail Communication Mix', in Retailing Management, 8th edn, McGraw-Hill Higher Education. Magner, L 2013, , viewed 2 April 2014, . Murphy, T 2014, keynote, viewed 13 April 2014, . NAB Group Economics 2014, NAB Business, viewed 3 April 2014, . Rigby, D 2011, 'The Future of Shopping', Harvard Business Review, December 2011, pp. 65-76. Wyk, SV 2013, Traditional retail on life support, but omnichannel can help breathe new life.

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