New study uncovers the structural shifts influencing and shaping Australian retail and how the industry can respond.
The retail market is showing signs of recovery amid changing customer behaviour, giving retailers some hope of respite from the tough conditions of the past four years, according to AMP Capital Shopping Centres’ latest Recommended Retail Practice Report.
The eighth annual report has also found the most successful retailers will be the ones who embrace trends such as the rise of consumer power, the internationalisation of the Australian retail market and an increasingly urban population.
Entitled The New Consumer Paradigm: Embracing the Evolving Retail Landscape, the report takes an innovative new format in 2013 as it examines five of the major structural shifts set to influence and shape Australian society from a macro level, including:
Globalisation: As international retailers increasingly enter the Australian market, how can the local retail industry best respond?
Generational Evolution: An understanding of the various generational cohorts, who they are and what it all means for retail businesses.
Urbanisation: What will be the influence of the increasingly urbanised Australian population on retail needs?
Technology and Innovation: As innovation continues to transform the retail experience, it’s important for stakeholders to understand and assess which technologies are relevant for their business and which ones are not.
Consumer Behaviour: How businesses can develop a deep understanding of evolving consumer behaviour, and partner with their customers to drive retail success.
Each of these major macro trends has been examined in detail by leading Australian thinkers as the report draws on a range of diverse perspectives including innovation psychologists, economists, futurists and retail research experts.
Bryan Hynes, Managing Director of AMP Capital Shopping Centres, said: “Retail is of fundamental importance to the Australian economy and while consumer confidence has suffered since the Global Financial Crisis, the report has found Australian consumers are ready and willing to spend if the product and experience are right.
“The AMP Capital Shopping Centres’ Recommended Retail Practice Report has become a crucial information source to retail innovators. We hope that the five white papers in this year’s report will provide retailers with a deep understanding of the key themes that are shaping the evolution of the industry and how they can help drive the change.”
This year’s Recommended Retail Practice Report features commentary from AMP Capital’s Head of Investment Strategy and Chief Economist, Dr Shane Oliver.
Dr Oliver noted: “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 per cent next year. A combination of 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.”
Research insights: Five key outtakes
Each of the five white papers within the report offers a wealth of insights for retailers. Highlights include:
Be internationally competitive – Michael Baker, a retail and retail property consultant, argues that with international retailers predicted to capture 6 per cent of the Australian fashion market during the next five years, it’s essential the local industry responds seriously with tactics such as critical investments in mobile and e-commerce, assortments and pricing [page 9].
Understand your audience – Tony Dimasi, retail research expert, recommends an understanding of generational cohorts to help build a better and stronger business although this is no magic bullet. For example, Gen Ys love Mexican food and are also significant purchasers of fashion, although at low price points [page 17].
Support the New Great Aussie Dream – Gavin Duane, market and economic retail expert, provides guidance on how the retail industry can react to more Australians living in dense inner suburban areas. Retailers and shopping centre landlords should consider services such as 24-hour trading and a greater food and entertainment offer [page 22].
Seamlessly merge the digital and analogue world – Anders Sörman-Nilsson, futurist and innovation strategist, advises retailers on how to best provide informational value to consumers’ increasingly digitised, rational minds while still connecting experientially with their enduringly analogue, emotional hearts [page 25].
Help your shoppers boost their ‘Status 2.0’ – Dr Amantha Imber, innovation psychologist, reveals how retailers can differentiate themselves by supporting their customers in improving their social media status. Embracing customer desires is key to success in remaining relevant in this changing retail landscape [page 35].
Drawing out consumer insights
Commenting further on the research, Bryan Hynes, Managing Director of AMP Capital Shopping Centres, pointed to the key findings that he believes are most set to influence the industry [page 2]:
The rise of consumer power. Brands can work with shoppers to come up with ideas for products and services.
Internationalisation of the Australian retail market and the road Australian retailers must take to improve competitiveness.
A greater understanding of the generational cohorts is imperative for business strategy.
Accelerated urbanisation of the Australian population and its growing desire for 24-hour convenience.
The digital world is now a norm for the consumer. Access to global information makes consumers smarter, more savvy and multi-channelled.
Research to feed the redevelopment pipeline
Mr Hynes emphasised the crucial role of research such as this report to the business and retailers around the country.
“This significant piece of research comes at a time when AMP Capital Shopping Centres has embarked on a remarkable $2.5 billion redevelopment pipeline of its key shopping centres to create the next generation of Australian retail.
“As the industry has evolved during the past eight years, so have our Recommended Retail Practice Reports. They have developed from an index of spending intent through to last year’s fascinating in-depth interviews with some of Australia’s leading retail success stories. We are focussed on providing the most relevant and timely insights as we create true retail, leisure and entertainment destinations that are world class,” he said.
The 2013 Recommended Retail Practice Report can be downloaded from ampcscresearchhub.com.au. Also available are video interviews with Bryan Hynes, Dr Shane Oliver, Belinda Daly (Head of Shopping Centre Marketing) and each of the five white paper authors.
About AMP Capital Shopping Centres
AMP Capital Shopping Centres combines world-class experience and specialist capabilities with a deep understanding of local property markets. Supported by the strength of AMP Capital and the experience of the AMP Group, we are uniquely positioned to provide premium property management services to some of Australia and New Zealand’s most successful and high-performing retail centres. Established in 1971, AMP Capital Shopping Centres has a portfolio comprising of 28 centres throughout Australia and New Zealand, which generate over A$7 billion in annual sales and attract over 165 million visitations annually. AMP Capital Shopping Centres employs over 275 people and has over 3,500 individual retailer relationships*.
*As at September 2013. Includes internally and externally managed centres.