It's all about traffic

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The current buzz in retail is all about multi-channel, online and virtual stores. You may think that technology is changing retail, but going back to basics, faster processors and smarter devices are not the main causes of the shift, it’s all about traffic!

I was in New Delhi a year ago and went to a place at the city fringe. No houses or shops, just fields and dirt roads. We left the bus at a junction in the morning and when we came back a few hours later, there were dozens of instant stalls on rickshaws or hastily erected, out to grab our foreign cash. They were very fast to identify where traffic and money have shifted.

Successful retailers follow traffic where they can reach more customers to sell their goods; sounds simple isn’t it? Looking way back, the hearts of cities were once the retail hubs. Over the years, supermarkets, megastores and shopping centres created a concentration of traffic leading to new business models like franchising and multi-purpose stores, forcing smaller retailers to reinvent themselves and differentiate through customer service or specialisation.

In the mid 90’s came the internet. This was a gigantic change for retailers with the introduction of completely new traffic patterns. The internet provided the next step in increased traffic as physical limitations were removed. Furthermore, it was the first virtual channel to combine advertising and buying, something that TV and radio can’t do easily. Sure you still need decent products, brand, advertising and customer service; but early adopters of the internet like www.amazon.com reaped the benefits of this new consumer behavior.

10 year later, social media is all the buzz. Despite the ability to access billions of web pages, most of us spend most of our time on 20-30 websites tops. While many retailers have a website; traffic moved once again to social media websites like www.facebook.com. Astute social media retailers do something new by fostering customer acquaintances (friends) to increase sales through viral advertising.

The next revolution came with smart phones and tablets becoming main stream devices. They do more than extend internet traffic; they give retailers virtual access to customers that didn’t use the internet before. For example, my parents were never comfortable with the complexity of personal computers, but they like the versatility of their smart phones. Mobile devices and QR codes are also introducing a new retail business model with virtual shops displaying goods on a wall. It is simple, cheap and easy to setup wherever traffic is favorable.

So where is the traffic going next? Are retailers going to have direct access to our brains? Hold on, this is not new, it is called branding!

Paul Goepfert

Paul Goepfert

Paul Goepfert

Paul Goepfert is the Marketing Manager for ERP vendor Pronto Software. @PaulGoepfert

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