Future of Retail Store: Kogan Case Study
It is over a decade since Kongan.com was created. The company has grown fast and up to today has delivered over three million products globally (Junglist & Simpson, 2015). Currently, the Kogan.com retailing operation involves both physical store and online platform. To overcome the potential competitor, Amazon.com, threat Kogan.com has embarked on expanding its product range. This has been accomplished through expanding its warehouse and other stores to be able to offer a range of products. Besides, the company has diversified its distribution channels by opening stores alongside the online platform. It appears the company has recognized that there is more in the retailing industry than the only online platform. Besides customers who embrace ordering products online, other would prefer to pick them from the store directly. (Junglist & Simpson, 2015). This is a customer behavior that Kogan.com has observed and therefore, ending adopting both the physical retailing and e-commerce strategies. However, the company has given more emphasis on the e-commerce business than physical stores. The appreciation of physical store by Kogan.com, a retail that is known as a leading advocate of the e-retailing is an indication that online platform is not only the solution of doing retail business. As much as businesses need the online retailing the same applies to the physical stores. Based on the Kogan.com case study, this paper will focus on critiquing a journal article on retail stores by Bilal Ahmad Rather. In the journal article titled “The Retail Stores: Are they still relevant” Rather strives to investigate and establish the relevance of the retail stores in today’s digital era (Rather, 2016, p. 394). It is evident that customers want to purchase products with ease by saving time where possible. As a result, e-retailing has entered the retail industry to meet the rising customer demands. It is quite clear that the “Clicks” are replacing “Brick” based on the diversified assortments and price benefits associated with the online platform (Rather, 2016, p. 394). This leaves the analysts in the retail industry with the question whether there are still opportunities for the physical stores. Bearing in mind that mobile phones and internet are fast changing the business era, the role of the physical stores in the retail era may never be realized (Rather, 2016, p. 395). However, this paper differs with the Rather’s argument and try to hold that businesses need physical stores as much as they need an online platform.
To elaborate on the arguments, against the Rather’s position; first, this paper opines that there are many security issues associated with the online retailing. For example, consumers, especially the conservative ones are concerned about the security of their debit or credit cards as well the information they provide online when making the purchase. To safeguard their information, they prefer to walk to the store and buy products direct from the shelves. Now, the question remains, how will the online platform cater for these customers? Bearing in mind the goal of the business is to serve a wider market as possible, the online retailers will be left with no other than to embrace the existence of the physical stores. The security issues are accompanied by other issues such as appreciating the culture of going out for shopping as a family over the weekend, the nature of the target market, the available technology in the target market geographical area and many others.
Importantly, business thrives by showcasing their products. The online retailing may be unable to show the products being sold by the company. This will force the customers to walk to the stores to view the brands being sold by the company. If the company operates only on the online platform where will the needs of these customers catered for? This the question that Rather’s article has appeared to ignore. As noted by Saha (2013, p. 75), it is true that online saves customers a lot of costs such as reduced buying costs and time to walk and from the stores, but with the elimination of the physical stores, it may be a big blow to the retailers. For example, the e-retailers may be forced to incur extra costs by paying the manufactures to showcase products on their behalf. If this strategy is employed, then the retailer may lose the connection with the retailer. Besides, not all customers may be able to reach the manufactures especially for the international retailers like Kogan.com. Additionally, it is very difficult for this strategy to apply to small and medium business retailers. Therefore, this paper holds that physical retail stores are still relevant even in today’s internet era.It is indisputable that technology has greatly transformed the retail industry. However, this not does render physical stores irrelevant. According to Desai, et al., (2015 p. 2) future and the success of the retail industry is tied on both on e-retailing and physical stores. This argument is supported by (Lau, 2017) who notes that, the retailers who ignore both the physical and the digital aspects in the retail industry they may be kicked out of business in future. This because customers appear to appreciate both online and offline retailing. Colliers International & GlobalData, (2017) notes that the success of the retail store lies largely on the physical stores. Profitable and huge stores such as Walmart, Woolworth and Macy stores success can be ascribed to the physical stores. These stores started first by establishing physical stores before entering online. Upon entering in the e-retailing business, their online sales have grown even faster than that of Amazon Inc., a giant in e-commerce. Besides, it has come as evidence that Amazon, has realized the importance of physical stores by opening a physical retail store in Australia (Blair, 2017).
In conclusion, this paper holds that no retail business will be able to thrive without embracing the role of the physical stores. This paper will go further to establish that physical stores should be a priority for all retailers, and therefore, e-retailing will come later as a compliment. From the observation of the stores that started with physical stores such as Walmart and Macy before going online, it is an indication that the success of the retail business lies both on offline and online strategies. E-retailing is still a new strategy that cannot be compared with physical stores in the retail industry.