The Australian retail landscape is in flux; we all know that what is essential with these studies is not just what they say but also what others, for example, banks that control the finances and prospective buyers and their accountants, are being told. These people control the inflow of money.
What we do know is that retailers face obstacles.
- We have a rising cost of living
- We have significant supply chain challenges
- Shifting consumer preferences
As everywhere, only those who are willing to adapt and evolve do well.
Let's dissect some critical insights from Roy Morgan's recent retail address and a lively discussion between retail experts Laura Deasi and Paul Zara, CEO of the Australian Retailers Association.
Key Takeaways from the Roy Morgan Address
- Population growth is vital: Australia's growing population has been a lifeline, somewhat shielding us from a full-blown recession. These people have been a big help to retailers.
- The cost-of-living bites: Rising costs disproportionately affect young families with children. However, some sectors and demographics still have spending power. The traditional pattern in such circumstances is that men's products go down, followed by kids' and women's products.
- Changing spending patterns: Consumers are reducing spending in some categories but increasing in others. There's a surge of interest in bargain hunting and sustainable options.
The Rise of Online Giants
- Amazon's Dominance: Amazon is rapidly expanding its customer base and is now one of Australia's top five non-food retailers. Their vast stock and focus on fast delivery pose a significant challenge to brick-and-mortar retailers.
- Ultra-Cheap Challengers: Shein and Temu have entered the scene with rock-bottom prices. However, concerns about quality and ethics may turn some consumers away in the long run.
What Does This Mean for Aussie Retailers?
Paul Zara and Laura Deasi offered valuable advice and considerations:
- Value is the New Currency: Price matters more than ever, but it's not just about the cheapest deal. Emphasise quality, durability, and your product's long-term benefits.
- The Ethics Factor: Consumers are increasingly conscious of your company's ethics. My advice still applies: Do not fall into this trap as whatever you do many will not like it.
- Online presence: I do not know how or why anyone would want to escape without an online presence. Offer something and have "click-and-collect" options. A modern and robust online presence is essential for meeting the expectations of today's shoppers.
- Tech to the Rescue: Your point-of-sale (POS) system can be your best ally.
- Streamline operations: Automate tasks to reduce overhead and free up time for customer service.
- Personalise experiences: Use our CRM features to provide recommendations and targeted promotions.
- Data-driven decisions: Track sales patterns and inventory levels to optimize your offerings and minimise waste.
Your Competitive Edge: The Human Element
Retail has always been a people-powered industry. While tech upgrades are vital, the exceptional in-store experience remains a decisive advantage for brick-and-mortar stores:
- Become an expert: Offer valuable product knowledge and tailored recommendations that online giants can't replicate. Coles has even little things like greeting cards, but I will not get any advice there on the sort of card I need.
- Build relationships: Friendly, personalised service creates loyal customers who become your advocates.
- Community connections: As Paul Zara emphasizes, physical stores are the heart of local communities. Support community causes to show that your values extend beyond sales.
The Future of Retail – Adapt and Thrive
The retail landscape is constantly evolving. Businesses with the foresight to adapt have a chance to excel:
- Embrace innovation: New technologies can transform your operations.
- Test and learn: Experiment with new products, displays, and promotions. If they work, double down. If they fail, be ruthless and get rid of them. Do not reinforce a defeat.
- Partnerships matter: Collaborate with as many people as you can.
To do well in 2024, we need to focus.
Share your thoughts in the comments below!
