Last week we discussed the Australian Bureau of Statistics retail trade figures for June, which continued a year-long pattern for the sector of almost standing still when population growth is factored in. As we’ve been analysing the highlights of the industry over the last year, however, there have generally been two sectors performing ahead of the field – department store retailing and clothing, footwear and personal accessories. This is an interesting phenomenon in an otherwise sluggish market, and potentially it points to a deeper change going on across retail globally.
There have been two published articles in recent weeks that have explored this in some depth. The business publication Forbes explored what it called the “technology revolution” in retail, and the ability of tech-savvy and market aware customers to demand goods that are specifically tailored to suit their individual needs. This article argues that the retailers who have already adopted new consumer technologies are already reaping the benefits. You can read the full article here.
A second article, Business Insider Australia, talks about how the lower Australian dollar is encouraging tourists, mainly from Asia, to view Australia as a luxury shopping destination, with demand for designer clothing, footwear and accessories soaring as a result. This certainly helps to explain the fact that retail trade results for these discretionary areas have been stronger than the general market in the last year or so. You can read this article here.
Even the Australian Competition and Consumer Commission got in on the act this week, referring to the changing nature of consumer habits when it approved the JB Hi-Fi bid for The Good Guys. In its decision, the ACCC said the merger of the two retailers would not significantly reduce competition because of the diverse nature of the market. It said:
“We considered that the combined company would continue to face strong competition from Harvey Norman and other existing retailers such as Betta, Retravision, Bing Lee and Radio Rentals. For lower value and smaller items, we considered that consumers have a range of alternatives, including online suppliers and discount department stores.”
Both of these articles and the ACCC decision pose some serious questions of Australian retailers, but also clearly show that there is a range of emerging opportunities in the sector. The questions for Australian retailers are all around how ready we are to take advantage of new technology and shopping habits. How often do we think about the future of our industry, and what plans have we made to take advantage of opportunities (or at least ensure that we don’t fall victim to changing consumer patterns)?
The National Retail Association regularly runs workshops and forums across the country to help you stay on top of emerging threats and opportunities, including new retail channels and trends. Keep an eye on your email throughout the year to make sure you take advantage of the expertise that becomes available.
Best wishes for the week ahead.
Dominique Lamb, CEO