Local retailers must hold their own with the internationals as sector evolves: AMP Capital
The successful retailers of coming years will be those that embrace the rise of consumer power, offer greater convenience and hold their own with the internationals, according to AMP Capital Shopping Centres’ latest ‘Recommended Retail Practice Report’.
The eight annual report also found signs of retail recovery amid changing customer behaviour, giving retailers some hope after a prolonged period of downturn.
AMP Capital’s head of investment strategy and chief economist Dr Shane Oliver says that while there has been low consumer confidence since the GFC, indications are that the state of retail is improving.
“Australian retailers have had it tough for nearly four years now but there is some evidence to suggest that retail sales growth will pick up to around 4-5% next year,” Oliver says.
“Factors including low interest rates, a potential drop in electricity prices, growing household wealth, a housing recovery and the change of government all point to positive signs within the sector.”
The report’s recommendations on retail best practice include:
Compete with the internationals: International retailers are predicted to capture 6% of the Australian fashion market in the next five years, so local industry must respond with investments in mobile and ecommerce, assortments and pricing to stay competitive. Aussie retailers will also have to go overseas to expand their own markets.
Support the new ‘Great Aussie Dream’: Retailers and shopping centres will need to respond to larger numbers of Australians living in dense inner suburban areas by optimising convenience with 24-hour trading and greater food and entertainment offerings.
Know your audience (and ask them what they want): It will be increasingly important for retailers to have a strong understanding of generational cohorts and trends. And consumer power will continue to grow with shoppers working with brands to develop ideas for products and services.
Be digital and analogue: Customers are increasingly digitised, but retailers will still need to appeal to consumers’ enduringly analogue, emotional hearts.
Pick what works for you: As innovation continues to transform the retail experience, stakeholders will need to assess which technologies are relevant for their business and which ones are not.
Help your shoppers to boost their status: Successful retailers will differentiate themselves by supporting their customers in improving their social media status. Embracing customer desires will be key to remaining relevant.
In the video below, Oliver discusses the findings: