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INDUSTRY INSIGHT RETAIL FORWARD: THINK LOCAL, VALUES, MEANINGFULNESS A recent ‘Prosumer Report’ from global marketing communications group Havas highlights considerations and implications for Australian retailers and shoppers. BMy Havas Commerce Managing Director Simon Porter. y local butcher, Barry, reckons trade has never been so good. Never shy of an opinion, he puts it down to COVID-19, with people forced to shop local as their worlds have shrunk. Sticking his neck out, he thinks it’ll continue this way. So, Barry’s pretty happy. And he’s got a point. COVID-19, like all major crises, has forced a significant shift in human behaviour. But, in this case, I’d argue COVID-19 has accelerated change that was already in motion. Our latest Prosumer Report*, conducted before COVID-19 took hold around the world, clearly highlights a trend towards preferring local over global – a trend that our recent ‘Meaningful Brands Study’ shows has accelerated and might be here to stay. Other highlights from the Prosumer Report show increasing shopper tension between value and values, more appetite for experiences over transactions in-store, and a fast-forward of ambient shopping in Australia. The study highlights a number of considerations and implications for Australian retailers and shoppers. Consumers are conflicted Shopping is a lot more complicated, and fraught, than it used to be. People are torn between values and value. While more than half of ‘prosumers’** say that in the future they’ll refuse to buy products from retailers that don’t share their values, nearly as many admit that, when it comes to shopping, price will always be more important than their personal convictions. And while we know from our 2017 study that 71 per cent of prosumers believe the best way to save the planet is to consume less, 66 per cent say that buying new things makes them happy. In Australia, there’s an even stronger affiliation with local, and prosumers are 50 per cent more likely to refuse to pay less if it harms the local community. Looking forward, I believe this will have a profound impact on Australian retail. Shoppers will prioritise local produce, goods and services. Global players will have to differentiate their offerings or give extreme price discounts. This will polarise the retail landscape more than ever before. Retailers must infuse values all along the product line Prosumers want to consume better and more mindfully and they expect their retail partners to make this easier for them by selling products that are good for the planet (94 per cent), banning items that are bad for one’s health (88 per cent), and guaranteeing fair prices for suppliers and producers (71 per cent globally versus 76 per cent locally). As debate intensifies around our primary industries, retailers need to prioritise positive action for sectors such as dairy farming, where they’ve come in for steep criticism in the past. This is a potential trap for our local retailers who lag behind their counterparts (particularly in Europe) for sustainability. I predict we’re about to see a tipping point for the likes of Coles and Woolworths in sustainable credentials. The retail fundamentals are getting an upgrade The imperatives of product, place, promotion and price (4Ps) are as strong as ever, but now they’ve been joined by four additional essentials: culture, community, connoisseurship, and convergence (4Cs). Rather than being just purveyors of goods, stores need to be places where people can gather for meaningful experiences and interactions. This is particularly true in Australia, where prosumers are 25 per cent more likely than their global counterparts to want trial, experience and social interaction from their in-store experience. The Australian retail landscape is set to be transformed. There’ll obviously be more online shopping. Physical retail will be divided into value retailers and experience retailers – with a significant reduction in footprint for the latter. This in turn has a huge knock-on effect for the make-up of our shopping centres and major shopping destinations. Even global retailers must be locally grounded As retailers grow, few manage to maintain deep local connections. The new consumers are demanding change: they’re looking for retailers to play a more significant role in their communities. More than half of prosumers say one of the things they expect most from retailers is to highlight local products. Australian prosumers are twice as likely to shop for local than global and are more than 25 per cent more likely to trust retailers that produce products locally than just sell other suppliers’ products. COVID-19 has already highlighted the danger of relying on global supply chains. This trend will surely bring a greater reliance on local supply chain and probably the retreat of global retailers, which no longer see the value in a market the size of Australia. Ambient shopping just around the corner People increasingly expect the convenience of online shopping to be available offline as well. We found that 75 per cent of prosumers would like to be able to immediately buy anything they see nearby using their smartphones. This will only have increased as social distancing and new shopping behaviours emerge from the COVID-19 crisis. This will be perhaps the biggest change to our shopping behaviours in decades. In a cashless society where tap and go is the new normal, shoppers will drive the demand of retailers and brands to shop anywhere at any time. The implication here for Australian “The new consumers are demanding change: they’re looking for retailers to play a more significant role in their communities.” 32 RETAIL WORLD AUG, 2020