"Your competitors are anywhere and everyone," Fredric Lam, Asia-Pacific Retail Innovation Centre manager said in his report prepared for a retailer summit held in Bangkok last week.

Speaking to reporters after opening IBM's retail and wholesale industry conference, Lam cited the case of a consumer who bought a Nintendo Wii from Amazon.com for US$250 (Bt8,625) and sold it the following day for $850.  The New Yorker made a $600 profit overnight, capitalising on the popularity of the game console while most stores ran short of stocks during the initial launch of the Wii.

Technologies have not only threatened the fate of retailing, they have also offered opportunities for the ones that know how to cope with the "user-driven revolution", he said.

"Apple has the Genius Bars at its flagship store in Manhattan where hi-tech people hang around, and these Apple fans help the firm sell their products for free," said Lam, giving the example of the iPod maker which has effectively turned consumers into its sale force. "Creating partnerships with your customers is very important whatever 'worlds' - virtual or physical retail stores - you sell in."

An IBM worldwide survey conducted earlier this year found 65 per cent of consumers researched online before they purchased offline.

In addition, 27 per cent of all sales are Web influenced. Convenience is king. Consumers won't wait, they will shop whenever and wherever. However, consumers expect a seamless and consistent shopping experience across all sales channels, said Lam.

"Consumers don't care how many channels you have but wherever they shop, they expect the same prices, same products, same promotions, and so on. They don't want to pay one cent more," claimed the IBM expert.

Lam said he did not expect physical stores to die out but stores can no longer be merely a place to display products. Consumers, he said, will demand "experimental retailing" and a successful retailer will need to create a unique shopping experience.

He gave the example of the bookstore industry which was hit hard by the emergence of Amazon.com several years ago, but has managed to strike back through transforming their bookstores into meeting places for book lovers and authors.

Retailers are moving from a category-focus mindset to a customer-centric, lifestyle brand perspective to comprehensively satisfy customers' needs in products, information and service.

Established retailers are using their brand names and existing relationships with a considerable customer base to move into other categories. Among the retailers whose business models have evolved to provide innovative customer experiences are many examples.

Carrefour and Tesco offer travel services, telecommunications and financial services to their customers.

Wal-Mart opens their parking lots to RV's for overnight stays and offers healthcare clinics, and Ikea and Metro offer utility and energy services in Europe. Starbucks has extended into media-music and now movie properties while Costco offers anything from coffins to cellphone services. Lam said among the industries which he expected would be affected most by the change in the retailing landscape were apparel manufacturers since consumers would turn to virtual worlds to shop for clothes. The key is mass customisation, he concluded.

Pichaya Changsorn

The Nation