Why is Online Retailing an Elephant in the Room?

An elephant in the room is a metaphor for something blindingly obvious, but for some reason is being ignored. I reckon online retailing is franchising’s elephant in the room. It is clearly the most important issue facing the sector today, but it is not getting the quality discussion it deserves.

Online retailing is of course where customers order or purchase goods or services online. And we all know the blindingly obvious. People are doing it at an increasingly rapid rate. Exponential growth like this is usually exciting. But if you have a chain of retail stores and customers are choosing to buy from alternative distribution channels, the alarms in your strategy room should be ringing loudly.

Rather than bore you with statistics, such as over 70% of Australia Post's parcel volume is now coming from customers shopping online, I’ll share a couple of personal anecdotes which have turned the lights on for me.

Why shop at Indooroopilly when Paris is just a click away?

I recently noticed my wife wearing a new pair of shoes. She’s not a keen shopper and dislikes going to the local Indooroopilly shopping centre, so I asked her where she’d bought them. “Paris” she replied with a sheepish smile.

It turns out her favourite shoes were a pair she’d bought a few years ago in Paris. So she Googled the shop and ended up buying two pairs from their online store, which were delivered, hassle free within four days. A significant point. My wife is conservative when it comes to technology. For instance, she rarely turns on her mobile phone which is a tiny old Nokia that you can barely text on.

Half the price, zero the weight!

As an avid reader I’ve been buying books on and off from Amazon for years. No big deal here. But last Friday I was in an airport bookstore about to buy a newly released psychology tome called Thinking, Fast and Slow. As I held it, weighing up its size (over half a kilo) and price ($32.50), I had the exciting idea to go online and buy it as an e-book, which would be a first for me.

Ten minutes later I was sitting in the Qantas club “flicking” quietly through the pages of this very book on my iPad. It had cost me $12, had been a breeze to purchase and it weighed nothing at all. This is what you call a paradigm shifting experience.

As I recounted my online book adventure to Karli Furmage, our CEO, who is far more tech savvy than me, she shrugged. “Get over yourself, I buy everything online these days.”

“Everything?” I quizzed a little skeptically.

“Well, everything I can. I bought a new bed a couple of weeks ago – it’s awesome. And a car this morning.”

“A car! Online?”

“Yup. A brand new Audi.”

Making your online presence a profitable partnership

I am sure you have plenty of your own anecdotes. The question is, as a franchising sector, what are we doing to make this online phenomenon a profitable partnership for franchisors, franchisees, suppliers and customers?

While many of our franchisor clients are feverishly experimenting with “bricks and clicks” strategies (combining a physical retail presence with an online service) it’s time we came together to shine a light on the elephant, share lessons learned and explore the emerging opportunities.

With this in mind the FRI team have decided to pull together a high level Bricks and Clicks Franchisor Forum where CEO’s, business leaders and invited experts can come together to discuss the impact online sales are having on franchise systems. We’ll be using case studies, interactive panels and expert presentations to explore the following:

• How franchisors can protect themselves and their franchisees from losing market share.
• Opportunities to use online sales and service strategies to complement your retail presence.
• How to deal with the fear factor and take your franchisees with you on the online journey.
• Alternative models for distributing revenues from online sales.
• Important legal, commercial and moral implications of having an online presence.
• And most importantly, lessons from franchise systems at the front line of online.

This Bricks and Clicks Franchisor Forum will be held all day in Melbourne on February 28th. The investment to participate is $495 (plus GST). It’s important we maintain a high level of quality discussion so we are limiting numbers. To reserve your place please email our events manager, Rob Camm, straight away on rcamm@franchiserelationships.com or call him on 0401 045 959.

We are committed to doing what we can to support franchise networks in these interesting times. Let’s shoot this elephant and get on the front foot.

Until next time,

Greg Nathan