There is still much financial pressure on Australian households this winter, which will force entrepreneurs to be extra creative in convincing customers to spend.
Speaking at the Australia Post’s business webinar this week, the Australian Retailers Association’s (ARA) CEO, Paul Zahra, painted a bleak picture of consumer spending in the coming weeks.
Zahra says consumers are continuing to look for ways to save money. He says customers shopping online or in-store are looking for budget bargains for their groceries. Home goods and fashion fall off the charts when households try to stretch their spending.
“We’re seeing more and more, particularly for women, that they’re prioritizing [their budgets] by updating their wardrobe by simply buying a lipstick or a new scarf rather than full outfits,” explains Zahra.
This could mean bad news for fashion retailers hoping the new season will see shoppers stocking up on their wardrobes.
The bottom line is that there will still be pressure on household budgets, and business owners must be creative to “survive and thrive.”
Customers spoils
It’s not all doom and gloom for retailers; there are ways of getting customers to spend more on non-essential items. Zahra says it is those “little luxuries” that customers are still looking out for, where they can find a deal or two to spoil themselves “without breaking the bank.”
That could also partially be why Black Friday sales hit a record high this year. “So we’re seeing particularly those events…. driving value. People are looking to get more out of it, household dollar, and those events become even more important in a cost of living crunch,” reminds Zahra.
What should retailers be thinking about? How can they leverage those events to “make up” when the sales are declining?
When the margins start declining, Zahra says business owners need to be “part of the change in the marketplace.”
ARA advocates for an omnichannel
The big question is always whether there should be a physical or online store or both. The Australian Retailers Association advocates for an omnichannel, which means both need each other.
Zahra says if business owners learned anything from the COVID-19 pandemic, an omnichannel is like an “insurance plan.” He says: “Shopping remains a social experience. People will do research online and shop in-store.” Or visa-versa.
Artificial intelligence (AI) also shapes the retail shopping experience into a new model, with vertical reality making shopping more accessible to choose at home to help families stay on budget.
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About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
