Australia’s retail industry has been facing some significant challenges over the past year, and unfortunately those challenges don’t seem to be going away anytime soon. Not only has the recent arrival of the retail giant Amazon created a new strain on Australia’s smaller retailers, but the rapid growth of retail technologies along with the increased pressure to provide a unique shopping experience for customers are forcing retail owners to sit up and take notice.
It’s imperative that local retailers get creative in order to overcome the challenges heading their way. As we approach 2020, retailers will need to implement a savvy strategy to meet the growing consumer demand for convenient delivery, personalised experiences, experiential retailing, and digital window shopping at their fingertips.
Here are just a few ways those of you in the retail industry can maintain a competitive edge in the years to come.
Competing with a giant
Amazon has established a reputation for entering a new region without much fanfare. Instead, the online retailer slowly ingrains itself in its new location and steadily makes it mark amidst the competition. As it nears its two-year anniversary on Australian soil, retailers must step up their game to remain competitive.
Although many may look at Amazon as the greatest threat to Australian retail, it can also be seen as a driving force for change—inspiring businesses to find innovative ways to remain competitive by improving operations, changing business strategy, embracing new technologies, and providing exceptional customer service.
The new and appealing subscription economy
If you shop online at all, you have most likely seen the option to break up your large one-time payment into smaller monthly chunks. Rising household costs and stagnating wages mean Australians have less expendable income compared to previous years. However, this does not mean that they’re not spending; they’re just spending differently.
It’s quite appealing when you can forego the expensive one-time purchases and instead split your payments through subscription or pay-by-month services. Small, monthly payments have become the norm for customers, with the expectation of this service growing. Customers are looking for more spending flexibility, and retail businesses must be able to provide this service—or risk losing the sale to the competition.
Everyone loves a good sale
It used to be that you could expect retail sales to be a treasured biannual event with a frenzy of shoppers vying for that last must-have item. Fast forward to today, and you will find that savvy shoppers expect a hefty savings at least every fortnight or so. As a retailer in today’s competitive landscape, you need to consistently be offering low or discounted prices if you hope to make a significant profit.
Visit any online retail website, and you will be greeted with an instant offer to save a percentage by signing up for special-offer email lists. An experienced shopper will also take the time to enlist the help of their search engine to see if there are any other coupon codes available that they can apply at checkout. It’s simple: Today’s shopper not only expects but also demands a discount. If they can’t find it with you, they will find it somewhere else.
On the upside, while this pricing demand can be a challenge, it also means that consumer buying behaviours maintain more manageable surges throughout the year, instead of only increasing once or twice a year during holidays and other busy shopping seasons. Just remember: If you’re going to have a sale day, make sure you can fulfil orders and deliver on time to avoid negative reviews!
Social commerce driving sales
Social commerce, or the buying and selling on or through social platforms like Facebook, Instagram, and Pinterest, is one of the most notable trends that has emerged over the last few years. With 79% of Australian consumers using social media, it’s no surprise that this has taken off. Added to this is the growing trend of the social media influencer—allowing brands to connect with their consumers in the right place and at the right time, using a voice that they know and trust.
Social commerce has become a steady fixture within today’s marketing strategy and is crucial for businesses to participate in if they hope to remain relevant in the modern marketplace. Bottom line: It puts your brand in front of the right audience and allows you to strategically utilise testimonials and word-of-mouth advertising.
The popularity of experiential retail
Driven predominantly by the millennial audience and their desire to not just “have” but to “experience,” experiential retail is on the rise. Retailers are transitioning away from traditional brick-and-mortar stores and incorporating a multi-channel shopping experience designed to engage customers’ senses.
For millenials, they want more out of their shopping experience than just the purpose of purchasing products. They want to engage in an activity that will add something to their day. Some examples might include a bookstore that offers a variety of wines to sip on as you browse, a clothing boutique that shares a space with a spa, or an outdoor supply store that provides rock climbing or lessons for other sporting activities. Experiential retail is a fantastic opportunity to grow your local audience and build a community of loyal shoppers.
Yes, it’s true that in the coming year retailers will need to be on top of their game looking for innovative ways to put the plethora of new technologies and strategies to work for them. When used effectively, however, they can be a vital tool in helping you successfully make your mark in the retail space.