High speed regional connectivity and retail

With three regional independent members in the lower house, regional investment is on the agenda. As is the debate to shape a cost-effective broadband internet solution to allow regional and rural Australia to develop on an equal footing to the cities. But what does it all mean to regional retailers?

I have spent the past three weeks in regional and rural centres in Victoria and New South Wales. So Ballina, Armidale, Forster, Goulburn, Mansfield, Benalla, Wagga, Albury Wodonga and a beautiful place called The Rock.

I have been talking to store owners, looking at retail in general, as well as the impact of high speed connectivity on retailing across all store formats, including bakeries, Australia Post offices, Telstra business centres, adventure retailers and large regional truck dealerships, as well as the more mainstream grocers, bookstores and farmers outlets.

I must say that the quality of service and store formats in many regional centres is outstanding. It reminds me that space and time make a huge difference to retailing, and regional Australia has an abundance of space and apparently much more time in the day than city peers. Imagine if your local coffee shop was also a bakery, the size of a six checkout grocery store and had a two-by-three metre wood fire burning to warm you as your coffee was being cheerfully made.

Could I suggest you might be late for work most days?

In Goulburn, the award-winning Bakery of Goulburn is a serious investment, delivering a top quality shopper experience. It’s an appetising store from the outside and within that delivers a great experience while only spending $6 on a coffee and bakery item.

In Albury, the new Telstra business centre is a serious investment in top quality retailing space, whether you are shopping for an iPhone 4 or a full Avaya PABX for your head office.

The Australia Post Office in The Rock, a small town halfway between Wagga and Albury, is the hub of the town. Here was the first place, some way off the beaten track and nestled next to a Telstra copper wire exchange, that broadband faster than ADSL 1 would benefit a small town. And here’s why.

Many niche products are made or grown in Regional and Rural Australian (RARA) land. Cottage industries are significant contributors to individual communities. Micro businesses that make Driza-Bone dog coats, heather flavoured honey and artistic iron and woodwork can bring an extra $20,000 into the family home in a year. If this is on top of the main household income, it’s the payments and running costs of a new car, a couple of great family holidays or repayments on the loan for the family-run business.

To market and deliver these goods, an off the shelf transactional website and nearby Australia Post Office is all that’s needed. I have two friends, both mums with grown up kids who run micro businesses this way. One is in Sydney and the other is in regional Queensland. The Queenslander has more time because she lives in the country, and she needs it because her internet connection is slow! Uploading photos of new items, changing prices and running promotions is very time consuming. Fortunately accessing the site by online shoppers isn’t an issue, as it’s hosted in a major city.

Please don’t mistake my point. Investment for mainstream retail business in super-fast internet has to be a good thing. However, $43 billion builds or upgrades a lot of fast road and rail links into regional Australia. Opening up fast access for the cities to spend money in the regions was what built cities like Phoenix and Tucson in Arizona.

$43 billion can be used to subsidise or act as seed capital to redevelop some outstanding regional town centres to support regional shopping as a destination; a place to spend a weekend at the end of a four-hour drive. The old grain silos and flour mill in Wagga, for example, if developed would be one very cool multi outlet retailing mall.

If this all sounds a bit “out there” let me leave you with one last observation. As you drive through regional towns, almost all the new construction is retail, from small shopping malls to redeveloped civic buildings housing bookstores in the centre of old town main streets. They service the local community well and they’d be a pleasure to shop at on a weekend if the roads between the city and town were fast and safe.

In his role as CEO of CROSSMARK, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia, NZ, the US and Europe. His international career in sales and marketing has seen him responsible for business in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands. CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.