Retail Industry in Australia
The retail industry has been facing a stiff competition in the business market, especially after the digital and technological revolution. Consumption trends have changed with the changing social and economic factors, which compelled the business companies to curb their strategies in a particular way that would be most appealing to their target consumers (Sorokin 2017). With the advent of the internet age, online retailing has taken over the business market as the brick and mortar retail stores experience a harsh loss of customer base. Adapting with the changing technological and other environmental changes is one of the most essential elements in the process of securing a business career. The changing consumer demands and expectations hint toward an easier, more tech-savvy alternative, which lets you purchase products and services at the comfort of your home, while being exposed to a wide range of information related to the products and the organizations (Gupta et al. 2017).
This paper takes up a large scale company from Australia and intends to explore their respective operational processes. Through a thorough understanding of the operational processes of this Company, the research would critically draw an appropriate analysis of how the technological and digital advancements affect the performance of companies in practical life.
In order to analyze the business operations of chosen retail organizations, it is important to have a thorough understanding of the history of retail industry, in the Australian context. The Australian retail sector has been feared to be on the verge of extinction, ever since the takeover of internet in the field of marketing and business transactions (Abhayawansa and Guthrie 2014). The economic and social transformations led the change in consumer demands and expectations, as the technological advancements led to the need of new tech-savvy means and experiences. As the consumer base experienced a sudden shift towards online purchasing, the brick and mortar retail stores have been facing tough backlashes (Moore et al. 2015).
Securing the future of the retail industry in Australia would require a more integrated approach to service delivery, marketing and promotion that would include the benefits of latest technological advancements and would sufficiently fulfill the particular expectations and demands of the consumers, created as a byproduct of the technological, social and economic changes (Bouwman et al. 2018). Service providing is now experimenting on new ideas and approaches that enhance the consumer experience of buying from a physical retail shop, with the help of appropriate marketing, promotion and relating them with the specific consumer demands.
The Reject Shop
This research takes up a contemporary large-scale company in Australia, The Reject Shop, to investigate their particular operational process, in order to have a basic understanding of the factors pertaining to the technological advancements that affect the performance of the same.
The Reject Shop: The Reject Shop is a large-scale discount variety-store chain in Australia that puts up a strong fight in the battle of securing retail processes in the face of rising competition against online retailing. It is a public organization that mainly focuses on the retail of a variety of products, at a relatively lower or discounted price. The three main strategies used by the company include offering a value-oriented servicing for the customers, providing products at a lower price than the average and ensuring an opportunity to strike a bargain. With a wide range of products that mainly attract consumers from all levels of the society, it invests a good amount for securing their changing demands and expectations (De Haan and Sacristán-Díaz 2016).
Since the establishment of the organization, it has undergone several organizational changes that altered the undesirable or irrelevant elements in the operational process and achieve the best that can be derived. With changes in technology and society, the Company has provisions for various online engagements with the customers via events, promotions, online retailing services and more (Scott 2015). The main emphasis of the organization was to increase consumer engagement, which would further help in shaping their objectives and strategies in a way that would enhance the organization’s competence.
As a large variety store in Australia, each of the Reject Shop outlets enjoys the privilege of attracting major sections of society, varying from different classes and cultures. The recent studies on the future of the retail industry indicate towards a holistic approach, where not only the economic gains are considered but along with them the respective cultural and societal impacts too (Bilgihan, Kandampully and Zhang 2016). While an online retail shop can provide easy shopping, the brick and mortar retail stores exhibit the quality to provide a physical experience of consuming time, space and culture—which needs to be taken up radically, for a strong and secure transformation. In order to make the retail industry survive the competition against digital stores, it is important to recognize their exclusive strengths and utilize them in order to transform their service-delivery.
According to (Wrigley and Lowe 2014), the aspect of retailing has to be looked at with an approach that includes the not only the act of purchase and sell but also the experience of shopping. This brings about a new perspective that is the geographical perspective to retailing and consumption. The process of consumption is not only related to buying products but also incorporates the consumption of social lifestyles or geographical space, ambiences, which play a huge role in shaping a consumer’s experience of consumption (Ariffin, Bibon and Abdullah 2017). For example, buying a burger is not only limited to the action of the purchase when it comes with added values like the location of the shop, its ambience, sharing the purchased food with other friends and finally enjoying the entire experience of it. Therefore, in order to compete with the stiff challenges against online retailing, the brick and mortar retail industry must inculcate particular elements that enhance the value of consumer-experience along with satisfying their demand for the products.
Impact of Technological Advancements on Performance of Retail Organizations
According to (Ramanathan, Subramanian and Parrott 2017), the technological revolution has compelled the retail sector companies to adopt suitable business models that would efficiently save their customer face in the face of stiff competition against the online retailing services. As the external environmental, social and economic factors have been changing along with the technology, Australians now are more affluent, busy, aware and tech-savvy. A major section of the consumer base prefer online shopping rather than physical shopping as it saves more time and energy, as well as provides ample information regarding the products, their average price, available alternatives and customer reviews. Social media plays one of the most important roles in engaging consumers in the promotional processes; the reviews of customers on social media play a huge role in dominating majority choice and preference for the product.
According to (Gorodnichenko and Talavera 2017), online retailing has become one of the most rapidly growing segments in retailing, especially in rich first-world countries like Australia, America and Canada. One of the major reasons why online retailing is so appealing is because of its incredible pricing. Products are available online at relatively cheaper costs than any other physical retail shop due to multiple factors that reduce their total cost of production and sell. Prices in online markets display 60-75% pass-through with high flexibility and convergence in response to nominal exchange rate shocks. Analyzing the price setting in comparison to international business world exposes the systematic relation of pass-through and the speed of price-adjustment.
According to (Hughes and Jackson 2015), one of the most important elements in retail industry is the location of the business. Though not much research has been dedicated exclusively for understanding the importance of location in retail sector, it exhibits even more importance with the rise of online markets and promotional channels. In order to enhance a consumer’s experience of purchasing from a local retail shop, it is necessary to keep in mind the location of the shop and how far that contributes in attracting more consumers. Emphasizing on the geographical location of a retail shop ensures a vital understanding of how each place offers unique merits and demerits to the respective organizations, depending on their nature of business. The research conducts a thorough investigation process by reviewing various literatures based on the retail location obsolescence, respective case studies and books that support the idea of enhancing a value-driven consumer experience through proper utilization of geographical location.
Consumer Experience in Retail Industry
According to (Tuten and Solomon 2017), social media marketing has turned out to be one of the most influential methods for business marketing that effectively utilizes the technological advancements of the day and the digital boom. With the advent of the age on internet, consumers are now exposed to a plethora of information online, relating to the description of products, their the impact of the product and the organization on the society, average price of the product, available alternatives to the product and also direct reviews by customers who have previously consumed the product. The customer reviews of products in social media play an important role in determining the success of the product and the longevity of its existence in the current market. Therefore, social media can also be used for intensive marketing purposes, where the organization engages with the consumers via social media at a personal level so as to reflect their demands and expectations in their service-delivery.
Conclusion
To conclude, the future of the retail industry is facing a serious backlog, ever since the advent of online shopping that successfully fulfills consumers’ demand to conserve more time and energy. In order to enhance the performance of retail organizations it is extremely important to include and engage customer voice in the process, so that their respective demands and expectations can be incorporated in the organizational objectives.
The research investigates the operations of Priceline and The Reject Shop in Australia to understand their operations and explore the various ways how technological advancements or its deficiency has affected the functioning of the respective organizations. A thorough literature review has been conducted to incorporate genuine qualitative data to the research. Finally, the research recommends the implementation of an integrated approach of online as well as offline channels, so as to provide a holistic consumer-experience to the target customers.
References
Abhayawansa, S. and Guthrie, J., 2014. Importance of intellectual capital information: a study of Australian analyst reports. Australian Accounting Review, 24(1), pp.66-83.
Ariffin, H.F., Bibon, M.F. and Abdullah, R.P.S.R., 2017. Restaurant’s atmospheric elements: what the customer wants. Journal of asian behavioural studies, 2(3), pp.85-94.
Bilgihan, A., Kandampully, J. and Zhang, T., 2016. Towards a unified customer experience in online shopping environments: Antecedents and outcomes. International Journal of Quality and Service Sciences, 8(1), pp.102-119.
Bouwman, H., Nikou, S., Molina-Castillo, F.J. and de Reuver, M., 2018. The impact of digitalization on business models. Digital Policy, Regulation and Governance, 20(2), pp.105-124.
De Haan, J.A. and Sacristán-Díaz, M., 2016. Measuring performance at the supply chain level: the role of the chain director. WPOM-Working Papers on Operations Management, 7(1), pp.1-21.
Gorodnichenko, Y. and Talavera, O., 2017. Price setting in online markets: Basic facts, international comparisons, and cross-border integration. American Economic Review, 107(1), pp.249-82.
Gupta, S., Keen, M., Shah, A. and Verdier, G.E., 2017. Reshaping Public Finance. Digital Revolutions in Public Finance, p.1.
Hughes, C. and Jackson, C., 2015. Death of the high street: identification, prevention, reinvention. Regional Studies, Regional Science, 2(1), pp.237-256.
Moore, D., Matosin, N., Rook, H. and Weber, J.C., 2015. Strategic think piece on pharmaceutical margins. Report for Community Pharmacy Services Governance Group. Sapere Research Group.
Ramanathan, U., Subramanian, N. and Parrott, G., 2017. Role of social media in retail network operations and marketing to enhance customer satisfaction. International Journal of Operations & Production Management, 37(1), pp.105-123.
Scott, D.M., 2015. The new rules of marketing and PR: How to use social media, online video, mobile applications, blogs, news releases, and viral marketing to reach buyers directly. John Wiley & Sons.
Sorokin, P., 2017. Social and cultural dynamics: A study of change in major systems of art, truth, ethics, law and social relationships. Routledge. London, UK
Tuten, T.L. and Solomon, M.R., 2017. Social media marketing. Sage.
Wrigley, N. and Lowe, M., 2014. Reading retail: A geographical perspective on retailing and consumption spaces. Routledge. London, UK
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