Australian retailers need to buck up!

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A couple of weeks ago, I ordered two similar items online, one from a company in Sydney and another from Philadelphia. To avoid any trouble at home, let me be vague and just say that both of these items can probably be found on the same shelf in a physical camera store. The item from Philly arrived at my desk in just under a week. Furthermore, I received timely updates about my order, an email from the supplier when the package was shipped and a follow-up message after it arrived. Meanwhile, the order status from the Sydney store went through several stages and got stuck at “ready soon”. When when I finally telephoned them, a customer service officer mumbled an excuse and said it would be shipped soon. The item finally arrived today, a total of 15 days from start to finish.

I have had similarly poor experiences ordering a variety of products online from mainstream Australian retailers. Their online presence is often just an afterthought, with high prices, weak product variety, clunky websites and unhelpful customer service. As a result of the strong Aussie dollar, shoppers are increasingly buying online and from overseas. Rather than complain about poor business conditions, Australian retailers need to buck up. I don’t believe it can’t be done because there is a category of Australian retailers that is already as efficient as those overseas: eBay-based Australian stores. These are small and medium sized entities that use eBay as a storefront. One reason they are responsive is that when searching eBay, overseas competitors’ offerings appear on the same page as theirs, so rivals are not even a mouse click away. A second reason is user feedback. Each time a transaction clears, buyers and sellers can leave feedback about each another and eBay reports a breakdown of ratings over time (see sample image below). This generates an incentive to continually maintain good customer service so as to avoid a fall in reputation. It generally seems to work pretty well. I would go further and argue that we should expect even better service from big-name Australian retailers than from these eBay based stores, but we aren’t receiving anything close to it right now.
Sample eBay rating

6 Responses to "Australian retailers need to buck up!"
  1. I agree there is a problem. Today, I went to the David Jones website looking for kitchenware for a gift and their website is hopeless. There was not even a search function for products making the whole site redundant. To top it off, I could only browse via brands, not product…

    If brick stores are going to compete it is because some people may still will want to purchase a good from a shop, or might be under a time constraint to purchase a gift. However, the web enables those stores to have a live inventory and the location of item this would allow for selection of product and knowing it was available – as opposed to heading to a shop aimlessly. 

    Needless to say, said kitchen implement was purchased from an Australian store with a good online presence, but was 10 minutes walk away.   

  2. The delay on the item from Sydney was probably because they had to go online and order it from an OS web site.

  3. I think Apple’s got the right retail model. Have a online store with good UI and service and treat the physical store as a place where you can try things with no expectation of purchase. I know Apple stores in fact generates a lot of sales and is hugely profitable but I see it more as a model for other retailers, say fashion, where they should treat their physical stores for marketing purposes allowing try ons but primarily make their sales online. People are already treating physical stores as fitting rooms and then purchase online but the retailers without the online presence aren’t getting any benefit from it as the sales are going to the non-affiliated online stores.

    It’s funny how a tech company is actually better at retailing then the traditional retailers.

  4. Australian retailers need to learn that logistics ends with the product in the customer’s hands, not in their retail store. That, and realising how poorly we score internationally when it comes to customer service.

  5. I suspect the lack of competition over decades has allowed importers & wholesalers to extract undue margins, and landlords to also get excessive rents, topped off by poor retailing. so a lot of reform is needed, perhaps including a more adaptive exchange rate management pricing structure

  6. There are some good Australian online retailers – for example Borders Online (still a going concern, having been sold to Pearson) and Peter’s of Kensington.

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