Tuesday, June 18, 2024

Five retail trends for Australia in 2016

The Australian retail industry is under significant pressure from consumer-based forces such as increasingly diverse customer segments, the rise of the digital generation and the non-stop customer journey.

Despite these pressures, the Australian retail sector has continued to grow in 2015 with the Australian Bureau of Statistics Retail Trade figures indicating that Australian retail turnover increased by 3.7 per cent between September 2014 and September 2015.

While the growth of the sector is a positive indication of customer sentiment, Australian retailers cannot expect the growth to continue without adapting to an evolving industry. The continued entry of new and non-traditional players will force retailers to change the way they operate and push them to look for new ways to engage with their customers.

Core to this is the digitisation of the retail sector. With growing customer appetite for online experiences, it is difficult for retailers to deny that the future of the retail sector will be led by the evolution of the digital marketplace. Customers are becoming accustomed to personalised customer interactions and beginning to expect that retailers will use social data and drive omnichannel experiences in order to improve the retail experience.

Unfortunately, the digital maturity across Australian retail companies still stands below that of global leaders such as Amazon, Target, Walmart and Costco. These companies are among a select group that have embraced emerging retail trends and innovation, such as mobile retailing, faster retailing through limited-time-only products, self-service check-outs and experience retailing.

As Australian retailers begin to navigate the digital marketplace, investing in technology to improve customer experiences, they should be considering the following trends, which are likely to define the industry in 2016:

Consumers as co-creators

Consumers will become increasingly involved in content creation through the products they buy via digital channels.

Global toy brand Hasbro has teamed up with 3D printing marketplace Shapeways to launch SuperFanArt, a website that allows fans to move past the consumer/creator barrier and create and sell 3D designs based on Hasbro brands such as My Little Pony, Transformers, Monopoly and Scrabble.

Changing nature of the store

The concept of the store has been in flux for a while now. As new platforms and media are embraced, so too are new forms of stores. Store footprints will decrease and the concept of the ‘store’ will evolve.

In a world where every object offers a new set of conversations with customers, shoppers have grown to expect something more from their shopping experience. Instances of this are becoming more common across the world.

For example, Macy’s department store is going beyond traditional bricks-and-mortar shopping with Shopkick, an app that lets customers browse new and favourite items in the online Macy’s catalogue. While they are in-store, the app will send push notifications notifying them of availability and discounts on those items.

Strategic outsourcing

As global barriers decrease, retailers are likely to outsource key business operations such as IT, supply chain management, and procurement – for cost efficiencies and to maximise flexibility.

Australian businesses are already beginning to embrace the ‘as-aservice’ economy, where instead of establishing their own operations infrastructures, companies buy what they need from providers that have the functional, technical and scientific knowledge combined with the industry expertise to deliver sophisticated services at a moment’s notice.

By outsourcing processes such as procurement and IT functions, retailers will be able to mobilise and demobilise services rapidly, as necessary, which will lead to overall cost reduction.

Changing supplier/retailer / relationships

In the digital age, all of the retail supply chain’s functions – from procurement to execution – directly impacts the customer experience.

However, despite its importance and the rapidly growing customer expectations, the supply chain remains as one of the weakest links – lacking the insight to anticipate change, and the agility to respond to it effectively.

Instead of the tactical approach to supply chain transformation that most retailers have adopted, leading retailers are moving towards a more strategic view, enabled by scenario planning, a more agile supply chain and hybrid fulfilment models.

By investing in analytics and data, retailers will give supply chain managers deeper and fuller insights that are required to take decisive action.

Data application

Australian companies are beginning to leverage new forms of cloud and analytics to improve operations, understand customer behaviour and strengthen business overall.

Damm Group, a Spanish beverage company, has implemented a mobile app that allows its sales force to make data-driven decisions when negotiating commercial agreements. The new app provides sales representatives and distributors with a common tool to manage customer data and sales information on the move. This is a great example of a company leveraging data and insights to strengthen the way it does business.

These trends will grow in prevalence next year as the retail industry changes to meet the needs of the future customer.

David Mann
Managing Director

David is Managing Director for Australia and New Zealand within Accenture Strategy. His role focuses on advising companies and governments on business strategy, operating models, digital strategies and innovation, cost management, customer and human capital management, large-scale business transformation and organisational change.

Accenture is a global management consulting, technology services and outsourcing company with more than 336,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, plus extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments.

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