Retail is back, but have your customers changed?


Retailers across Australia are once again looking to a better future. As New South Wales-based retailers open their doors to shoppers and Victorian businesses are expected to follow, Australia’s economy is reopening just in time for a busy holiday trading period.

As restrictions ease and consumers in Australia’s most populous states regain some basic freedoms, the recovery can now begin. However, while retailers and consumers alike would be keen to leave 2021 behind, research suggests that recent events have once again reshaped the way people buy and spend.

The new CommBank Consumer Insights study examines changes in behavior, attitudes and intentions of more than five thousand five hundred Australians over the past six months. This shows that some preferences are now more entrenched than they were six months earlier, and others have started to reverse.

What happens from there remains uncertain, but picking up the signals regarding current and future consumer needs can allow retailers to build new momentum or adjust their strategies.

The local economy in the foreground

It is not just the restrictions induced by the pandemic that have influenced the digital shopping activity of Australians. Yes, sight shopping, click and collect usage, and ordering through online meal delivery services have increased slightly since January 2021, according to research. However, consumers have also stepped up their support for local online retailers, with “buy local” being the most prolific of the online activities we asked about.

According to the Consumer Insights study, more than one in two Australians (52%) now buy more from online retailers based in Australia. This has increased since the start of 2021 and is almost two and a half times higher than those who spend more with offshore online retailers (22 percent).

Our Consumer Insights research earlier this year showed that this desire to “buy local” also extends to locally sourced products. In January, the majority of consumers in most categories said it has become more important to buy products made in Australia, 78% believe it is important for brands to support local communities.

Emerging digital payments are gaining ground

The use of new digital payment options has continued to increase since the pandemic took hold, especially among online shoppers. Meanwhile, nearly 60% of Australians say they use less cash, and debit and credit card use has slowed.

While more than two in five Australians have used a mobile payment wallet to purchase goods or services, and 35% have used a buy now pay later service, this figure rises to 58% and 45% respectively for online shoppers. line.

When it comes to payments, the biggest change in frequency of use among consumers over the past six months is “buy now pay later”. This is an increase from the 34 percent reported six months earlier.

Not everyone aspires to a pre-pandemic shopping experience

Research shows that most consumers in all categories intend to return to pre-Covid-19 shopping habits after the pandemic recedes. On closer inspection, these intentions have changed over the past six months, which may support the likelihood of more persistent preferences.

In the case of books, media and games, 48% of consumers say they are now unlikely to return to the way they shopped before the pandemic, down from 44% six months ago. Buyers in the consumer electronics segment expressed a similar sentiment.

In other categories, namely fashion and auto parts, the reverse is true when more consumers intend to return to the store than in January. For fashion, the proportion of consumers who are now likely to return has climbed to 66% from 61% in the past six months. In motor vehicle parts, the change is similar for 65 percent of consumers, up from 59 percent previously reported.

So, as the Australian economy reopens and a roadmap is set for further easing the restrictions in place, uncertainty may begin to give way to positivity. Based on what we saw at the end of 2020, the retail sector is expected to benefit from pent-up demand and a substantial savings balance.

As we look to the future, it is worth remembering how much consumer behavior has changed and the impact this may have on their purchasing preferences. Maintaining this deeper understanding may well help companies move from capturing short-term exuberance to building longer-term loyalty and momentum.

To access information or learn more about how CommBank can support consumer businesses, visit commbank.com.au/consumer-insights

About the Author: Jerry Macey is Executive Director, Consumer and Diversified Industries, at the Commonwealth Bank of Australia.

Things you should know:
The Bank believes that the information contained in the article is correct and that all opinions, conclusions or recommendations are reasonably held or formulated, on the basis of the information available at the time of its compilation, but no representation or warranty, express or implied, is not made or provided as to the accuracy, reliability or completeness of any statement made in the article. All projections and forecasts are based on a number of assumptions and estimates and are subject to contingencies and uncertainties. Different assumptions and estimates could lead to materially different results. The article refers to data from an online survey of 5,639 consumers. The survey was carried out by ACA Research on behalf of the Commonwealth Bank. All analyzes and opinions on future market conditions are solely those of the Commonwealth Bank.

This article is intended to provide general educational information only. It does not take into account the financial situation or needs of any reader and should not be taken as advice on financial products. You should consider seeking independent financial advice before making a decision based on this information. The information contained in this article and any opinions, conclusions or recommendations are reasonably held or made, based on information available at the time of its publication, but no representation or warranty, express or implied, is made or given as to the accuracy, reliability or completeness of any statement made in this article.

Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit License 234945.


Source link

Previous Debt crisis: FG will prioritize repayment - Emefiele
Next Warren Buffett loves these stocks. Are they right for you? | Personal finance