Cisco to retailers: The real issue is Internet on mobile phones, not GST
- 07 February, 2011 14:32
Australian retailers need to stop fretting about GST issues and start thinking about taking advantage of Internet on mobile phones if they are to stave off the threat from online shopping sites overseas, according to Cisco
The Cisco Visual Network Index (VNI) forecasts mobile data traffic in Australia will grow 32-folds from 2010 to 2015. The number of mobile connected devices will reach 56 million in 2015and smartphones use will grow four-fold in the next five years.
The figures indicate the widespread use of mobile Internet will compel business and government organisations to change their business models and how they interact with customers as well as employees.
Retail is one sector that has to keep up with the popularity of mobile Internet and the rise in smartphone uptake, according to Cisco CTO, Kevin Bloch.
Online shopping has proliferated in recent years and has spooked local retailers as overseas websites often offer goods at significantly cheaper prices. Last month, retailers rallied together to demand the Government impose GST on Internet transactions of under $1000.
But retailers are misguided if they think imposing a tax on items purchased overseas is the main issue they should be concerned about, Bloch said.
“A lot of retailers have been complaining about the GST and all but to me, that isn’t the main story,” he said. “The main story is the global transition towards smartphone, mobility and intelligence in people’s pockets.”
Bloch highlighted US retailers have already started harnessing the power of mobile phone Internet to encourage customers to visit shopfronts. Some retailers have implemented systems to send out SMS offering discounts that can be claimed at a store in person.
“Physically, they have got you into the store through a mobile and online presence,” Bloch said.
With the US a good 6-12 months ahead of Australia in taking advantage of mobile Internet, local retailers must get their act together in 2011 or risk losing more customers to online websites abroad.
“Technology-wise, it is not that difficult to implement a retail mobile solution,” Bloch said. “But if, for example, senior management is more concerned with GST issues and are dwelling on it, it will delay the realisation that a much bigger deal is going on here.”
According to Bloch, the channel can play a part in moving retailers along to use mobile Internet to their advantage.
“This is a really significant opportunity for the channel in Australia to think about some of the trends highlighted in the VNI and talk to customers on how to leverage those trends to help them,” he said.