The Dangers Of Risk-Averse Retailing

There is an undercurrent in the Australian retailing marketplace that is calling into question whether Aussie retailers are too risk averse, and are therefore suffering in the innovation section of retailing.

While it has been said that innovation and risks go hand in hand, the current view of market experts is that Australian retailers are, to quote former Pacific Brands marketing manager Vicki Stirling, “a bit afraid” of innovation.

This is an interesting point raised at a crucial time in the Australian marketplace. With the volatility of the international trading landscape coupled with the constant yo-yoing of the Aussie Dollar against the greenback, so called “risky” business ventures in the retailing sector are more often than not overlooked in favour of tried and true methods. What this does not take into account is the constant craving for the “new” experienced by consumers in all formats. 

Innovation can be defined as the application of better solutions that meet new requirements, inarticulate needs, or existing market needs – and that consumer craving arguably comes under all three of those banner areas.

Michael Wittner, Co-CEO of footwear brand Wittner Shoes, has said that the integration of new technology with bricks and mortar retailing is set to drive this innovation, and that the future take-up of the “mobile wallet” in Australia will drive huge increases in the retailing sector. We have all been a part of the gradual shift from currency to manual electronic payment, to tap-and-go payment. Mobile payment optimises the tap-and-go opportunities, clearing the way for a forecasted explosion in pop-up style stores across the country. This driving innovation in the retail sector will put even further strain on the classic bricks and mortar retailer to innovate in their own offering.

A good of example of this is the E-Mart “flying store” – Korean retailer Emart identified that people who are busy cannot always take the time to visit stores. To combat this, they created a “flying store”, a truck-shaped balloon that floated across a city, offering Wi-Fi access to the Emart catalogue and store, which ended up increasing online and mobile sales by over 150%.

What does this mean for us?

This is a real hot button issue amongst retailers – on one hand, how do you break through the everyday clutter of the retailing landscape while on the other hand not being too risky about it? The real danger of risk-averse retailing is being left behind. Who is going to see your weekly Press DPS when your audience is reading their news online? Who saw your cracker 30sec TVC that launched last night when your key audience was busy watching/reading about a TV series finale on the net? Retailers are finding themselves more and more at the mercy of the digital arena, and while as of now risk-averse advertising is heavily focused on your classic media, the dangers of avoiding the digital age may become clearer down the track.