The past decade has been an exciting and transformative time for the retail industry in Australia. We've seen a rise in consumers placing greater emphasis on brands that lead with integrity and transparency, and environmental, social, and governance (ESG) practices. The second-hand clothing market is growing at an unprecedented pace, as circularity becomes a top priority. On top of that, recent challenges faced during the holiday season have emphasised the importance of resilience in the supply chain.
While these changes have brought new challenges for Australian retailers, with increased competition and the entry of big international players, it's also opened up opportunities for growth and innovation.
Even as the world continues to navigate the ongoing pandemic, retailers and consumers are adapting to a new reality. While there is still uncertainty, there is also hope and a drive to connect with customers and employees in new ways.
We're seeing businesses embrace technology and new business models to shape the future of shopping, from ‘checkout-free’ stores to ultra-fast delivery. It's not always easy, but retailers are rising up to the challenge, and finding ways to thrive in this ever-evolving landscape.
While 10 years ago most spending occurred in the early to mid- December weeks, Christmas now comes earlier than ever and truly kicks off at the start of November. This year, the updated design of the Holiday. Survey reflects the growing length of the silly season.
With cost of living pressures beginning to bite into discretionary spending, there could be more subdued growth this holiday season in comparison to previous years.
Some brands are trimming their trees: finding efficiencies through technology and creating greater value
Online sales channels are firmly entrenched but growth is moderating. With Australia Post warning online consumers to finish their Christmas shopping earlier and earlier each year, consumers could see shopping in-store as a way of ensuring they get their gifts on time. Online sales have taken a backseat this holiday season.
While some cynics might see purpose as a ‘marketing exercise’, there is increasing evidence and research to show that organisations which ‘stand for something’ beyond generating a profit can create meaningful value across the organisation and often outperform profit-focused organisations in the long term.
Ten years ago, retailers were worried about foreign competitors coming into the country and taking their lunch. This year, Australian retailers are living comfortably and holding their own with the multinationals.
Retailers and consumers alike are becoming more aware of the impact they have on the environment and society. Deloitte suggests taking a holistic approach that aligns sustainability efforts with overall business goals. Companies that focus on their most pressing sustainability issues tend to see the strongest financial returns.
As Millennials and Gen Z continue to become a larger share of the consumer population with significant purchasing power, the rise of the conscious consumer has moved from a niche section of the market to mainstream.
With working from home now the norm, there is a decrease in foot traffic in central business district (CBD) stores. While stores in the suburbs and outskirts are likely returning to normal as people go to stores closer to their homes rather than their workplaces, CBD stores look to have it tougher.
With the rise of e-commerce, retailers now hold more customer data than ever before and with increased customer data comes increased responsibility. There has been an explosion in cyber security threats over the past few years with many examples of data breaches, ransomware and phishing attacks across the world.
Retailers are showing a gap in back of house and customer service roles with the growing trend towards a more automated and tech savvy workforce. Today’s jobs are increasingly likely to require you to use your head rather than your hands. The less routine jobs are harder to automate, and that is where employment has been growing. More specialised skills are needed.
One of the more pronounced and persistent changes has been in the mix of business that is conducted online and the proportion of customers that have transitioned to home delivery or click and collect.
Many Australian retailers have adapted quickly to this structural change and have flexed their distribution channels as conditions evolved, however, there remains a material gap between the practices we observe globally and what is common here – particularly when it comes to creating and delivering the customer promise.
The Retailers’ Holiday Survey respondents are showing a sense of uncertainty in consumers’ ability to keep spending in the face of rising prices and inflationary pressure. This uncertainty will likely continue as volumes tail off and prices increase further.
Deloitte Access Economics forecasts that while there are a range of headwinds both on and offshore, retail sales are expected to remain strong over 2022-23.
Damien is a partner in Deloitte’s Retail, Wholesale & Distribution group. With more than 15 years of experience, Damien works with major ASX listed, multinational and large private entities to provide them with audit and advisory services. As a specialist in Retail & Distribution, Damien brings the benefit of significant industry experience to understand the key risks and challenges in the modern corporate environment and provide actionable insight to clients. Damien has experience working on a variety of engagements including: Acquisition/divestment accounting advice Assistance with structuring of Corporate Governance frameworks, financial and management reporting lines, forecasting and internal controls Prospectus review including identification and review of non-recurring adjustments to pro forma financial information IPO structuring and associated accounting treatments and disclosure
Vanessa is a strategy partner at Monitor Deloitte and leads Deloitte Australia’s Consumer Products sector group. With more than 20 years' experience advising clients in the consumer products, Agri, FMCG and retail sector, Vanessa has a deep understanding of the industry dynamics, consumer and market trends and related growth opportunities. She combines her skills in corporate and commercial strategy, turnaround programs as well as the design and management of large transformations with her passion for food to drive positive commercial results with progressive societal outcomes.