2019 was full of uncertainty. Headlines about recession, weak wage growth, record debt levels and property market downturns were a constant in the media.
With all the media’s doom and gloom, it’s not surprising that many Australians cut back on their spending. The resulting pressure on retailers meant dismal financial performance for many well-established Australian brands such as Myer and David Jones and shrinking store fleets for other seemingly invincible brands like audio specialist, Bose.
But, if 2019 was a horror year for retailers, 2020 is fairing no better. January has seen a retail bloodbath with store after store announcing closures over the coming months, citing tough market conditions and increased online competition.
Who are the big brands?
There’s been numerous and they’re across the board. This week, Kaufland shocked everyone when it announced it was pulling out of the Australian market to focus on its European operations. Beauty retailer, Napoleon Perdis, fast-fashion staple, Bardot, games retailer EB Games, and the long-standing Jeanswest were among many names announcing closures or massive restructures. Department store, Harris Scarfe also announced a significant number of closures this year – cutting 440 jobs and closing 21 stores as part of their receivership process.
So, is physical retail dead?
Not yet. Is it going through vast disruption? Yes.
Retailers, like Mecca and RM Williams, that differentiate themselves, provide a remarkable shopping experience, great customer service, exciting and vibrant stores and seamlessly connected digital channels have been reporting strong year-on-year results.
Conversely, the stores with the one-size-fits-all marketing, repetitive sales promotions and boring store environments are dying a quick death. For these retailers, you could definitely argue that physical retail dead. But, you could also argue that their overall brand is dying too.
Is it all economic growth?
Partly. Australia’s economic growth has dropped to its slowest pace. This, coupled with weak wage growth, negative sentiment around the property market and record levels of debt have all contributed to Australians adjusted their spending to a lower ‘new normal’. More and more Australians are seeking out lower cost, value-driven options.
Bricks vs. clicks.
The rise of online shopping has meant it’s easier than ever for customers to easily find cheaper alternatives online. Brands like the Iconic, famous for their convenient policies, are also winning over customers who are increasingly seeking a seamless shopping experience.
At Lilo we’re all about helping online retailers keep up with the ever-changing eCommerce landscape. Holistically, online shopping is still a disjointed experience, with customers having multiple shopping wishlist and carts across different eCommerce platforms. By providing one platform for customers to save and share their wishlists and shopping carts, Lilo is ultimately providing a more cohesive and convenient experience for customers.
As shoppers become more digitally savvy, it’s fair to say eCommerce has well and truly disrupted the retail game. To survive in today’s increasingly digital landscape, retailers must differentiate on product offerings, provide exceptional convenience and customer service.