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Online threat to Rundle Mall retailers "stabilising"


Competition between Adelaide bricks-and-mortar retailers and exclusively-online vendors has “stabilised” – with no significant losses of market share over the past six months, according to Rundle Mall Management Authority chair Peter Joy.

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Speaking at a Renew Adelaide forum on the state of Adelaide’s retail sector yesterday afternoon, Joy said Rundle Mall retailers have stopped losing ground to online stores in recent months.

“Within the Rundle Mall Precint, online penetration – which has been quite significant over the last couple of years – has stabilised,” he said.

“We are not losing sales to online for the last six months, roughly – we know that from all the information we collect.

“And the reason is (that) online has it limits; bricks-and-mortar has just as many opportunities.”

Joy said the key opportunity for physical retailing in Adelaide was in the development of great experiences in-store.

“Look at what’s happening to restaurants,” he said, citing the celebrated D’Arenberg Cube restaurant in McLaren Vale.

“Yeah, the food’s terrific – but it’s a total experience: a total experience in service, in décor, in architecture; in everything.

“It’s not enough to have product on the shelf – you’re going to have to find ways to expand that product into the experience of using, making or trying that product.”

He noted that online delivery giant Amazon was making major investments in smart home technology and argued that the development was likely to “commoditise” shopping – meaning that consumers would only take the time to go to bricks-and-mortar stores if they expect to enjoy doing so.

“It’s going to commoditise most of the shopping we do (such that) our fridge will send a message to Amazon telling the company that we’re out of milk (and) that milk will be replaced without use even knowing or thinking about it,” he said.

“People will commoditise a lot of the things that they find unpleasant and they will (seek out) the things that they enjoy.”

And the most successful retailers of the future, he said, would be those who combine excellent in-store experiences with outstanding online strategy.

“I think one of the big changes – (this) is a big opportunity for the city – is the merging of online with offline retail,” he said.

“The parallel to me is taxis and (rideshare company) Uber: they (taxis) had all the cars and all the drivers sitting there but they didn’t have the online mechanism to connect people and drivers … and easy credit card payment.”

Yesterday’s panellists (left to right) Julie Thomas, John Chapman, Peter Joy, Dennis Karis and Franz Knoll. Photo: Bension Siebert / InDaily

Long-time Rundle Mall sunglasses retailer Dennis Karis, founder and proprietor of Shades and Opt Shop, agreed that retailers had to excel at both in-store experience and online engagement.

“You have to have a bit of theatre (and) the staff have to be a bit more interesting,” he said.

“You’ve got to be online, you’ve got to be on Instagram (and) you’ve got to be fair in your pricing.”

Small Business Commissioner John Chapman concurred, saying too few bricks-and-mortar retailers had an effective online presence.

Julie Thomas Australia retail leasing manger for CBRE, told the crowd there were several major international retailers that were looking to set up shop in Adelaide, but that they required more shopfront meterage than most landlords in Adelaide were able to offer.

“Adelaide is on the radar for a lot of new (major stores),” she said.

“We’re having some really great interest in the city (but) they want a massive presence.

“That’s why they are all delaying coming in (to Adelaide).”

Central Ward councillor Franz Knoll, who was also on the panel, said there was no room in the Adelaide market for retailers that don’t excel.

“They need to be the best or the cheapest,” he said.

Karis added that landlords sometimes needed to reduce rents to attract the young entrepreneurs required to keep high streets relevant and exciting.

He mentioned Jetty Road, Glenelg, where he had kept a shop for decades, and witnessed a “decline”.

“If you want interesting retailers … (tenancies) have to be affordable.”

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