For online retailers, it’s hard to know for certain what waits around the corner. New consumer expectations, rapidly shifting consumption patterns and significant operational turbulence have all contributed to considerable unpredictability in the industry. However, as the dust begins to settle, we’ve identified three emerging retail trends in Australia that are providing savvy business owners with the opportunity to get ahead.
The importance of capitalising on these trends can’t be underestimated. 2020’s surge in retail spending is unlikely to continue throughout 2021. In fact, Deloitte Access Economics’ latest quarterly Retail Forecasts predict that 2021-22 retail growth will be a modest 0.9%.
Read on for some of the biggest predictions and trends to watch in the 2021-22 FY, as well as the questions you need to ask in order to seize these opportunities, and drive profits and business growth.
New shopping behaviours
The COVID-19 pandemic led to unparalleled growth in retail as Australians turned online for the things they needed. While businesses with strong pre-existing eCommerce capabilities thrived, others had to pivot online quickly. The sudden fusing of digital and physical shopping experiences made once nice-to-haves – such as click and collect, same day deliveries and multiple payment options – essential for keeping shoppers happy.Australian retailers stepped up to the challenge and innovated at a speed never before seen.
Now as consumers have become accustomed to the convenience and safety of these innovations and services, adoption by retailers is accelerating and omnichannel strategies are on the rise. Yet the Australian market still has some ground to cover. 2021 will be important for retailers as they bring forward eCommerce and digital initiatives in order to deliver the customer experience once planned for years down the track, today.
Questions to ask – Review and enhance your online shopping services:
- Do you have technology in place to offer click and collect? If not, what needs to change to make that happen?
- Are you able to offer same day deliveries or multiple delivery options? If not, do you need to improve your shipping and logistics capabilities or incorporate third-party logistics into your business systems?
- Do you offer shoppers multiple payment options such as PayPal, Afterpay or Zip Pay? If not, how easy is it to implement new payment methods?
Conscientious consumers
Ethical shopping has long been a consumer sentiment, but the recent global upheaval has only sharpened consumer preference for purpose-driven organisations.
In the heat of the pandemic, environmental and social concerns were often cast aside for less sustainable practices such as single use masks and disposable coffee cups. But the pandemic also became a catalyst for consumers who wanted their buying decisions to take into account environmental and social causes that better align with their values. In fact, a 2020 IBM Research Insights Report found that nearly 6 out of 10 consumers are willing to change their shopping habits to reduce environmental impact.
Australian retailers are taking note, with many pledging to reduce their carbon emissions and/or achieve net zero emissions by 2050 in line with the Paris Climate Agreement. Others are reducing unsustainable packaging and supporting recycling efforts. For example, Kmart has committed to phasing out a selection of own-brand single-use plastic products, while Aldi is phasing out single-use plastics and reducing plastic packaging by 25% in 2025.
With many consumers’ decision-making processes centred on more than cost-savings or what a product can do for them, Australian retailers are starting to focus more on improving their environmental and social impact and transparently meet consumer preferences.
Questions to ask – Understand and share a common purpose
- Do you have a clear understanding of your purpose for being in business and is this communicated effectively?
- Is sustainability built into your end-to-end operations? If so, can you demonstrate to consumers your commitment to sustainable practices across manufacturing, sourcing and supply chains?
- Can you develop new and innovative products and processes to reduce waste and fulfill customers’ ethical expectation.
Building loyalty
Acquiring new customers is far more expensive than keeping your existing ones happy. But while customer retention is more cost-effective, it’s not always as easy as it sounds. 2020 consumer research by McKinsey found that over one-third of consumers tried new brands during the pandemic, and of those, nearly three-quarters planned to switch brands permanently.
Becoming a trusted brand with loyal customers does not happen overnight. It requires you to develop a deeper understanding of your customers in order to better cater to their wants and needs. This can be achieved by aggregating customer data and translating the information into insights to inform targeted campaigns, initiatives and personalised experiences that speak to your existing customers and instill that all-important loyalty.
Questions to ask – Understand and cater to your existing customers:
- Do you collect customer data and is it all consolidated in one location or single source of truth?
- Do you have the capabilities to turn customer data into insight? If not, what needs to change to make this a reality?
While we have only touched upon a few retail trends in Australia in this article, they all demand serious consideration, especially if your business had to pivot quickly to keep up with competitors in 2020.
You can learn more about the ideas we have touched upon in this blog: Are your business systems ready for ecommerce acceleration? Or download our Building The Foundations Of Great Customer Experience ebook to learn more about driving customer retention and business growth.
Annexa is a leading NetSuite partner with extensive experience designing and implementing comprehensive and customised business systems, including payroll solutions, financial management, warehouse management and ecommerce solutions.