Page 58 - RetailWorld-May2021-Tobacco-Updated

PRODUCTIVITY LEADING BY EXAMPLE: AUSTRALIA IN THE ‘RETAIL SPRING’ Australia’s ability to contain and almost eliminate Covid-19 has allowed the retail industry to operate within a relatively stable environment compared with many global markets where long-running lockdowns and stringent social distance guidelines are still in place. BWy Vend Vice President APAC Gordana Redzovski ith Australia’s vaccine rollout running behind schedule and JobKeeper coming to an end, the economic climate is still challenging for many retailers. While the effects of the pandemic may still be felt for some time, improvements in business and consumer confidence have provided a glimpse of retail in a post- pandemic world. As a result, the retail sector is uniquely positioned to focus on a longer-term horizon and evolve and innovate in this new normal. The rest of the world is looking to Australia to determine how sticky the behaviour adopted during the pandemic will be, which physical experiences will come back, and whether QR codes will still be useful. E-commerce penetration remains high The clearest winner in the pandemic has been e-commerce. According to data from AusPost, online purchases increased 57 per cent year on year in 2020, with Australians spending a record $50.46 billion online. Online sales accounted for 16.3 per cent of total retail sales, a proportion the number crunchers didn’t expect to see until about 2023. Online buying habits are sticking. Although restrictions eased and online shopping activity softened, volumes have never returned to the pre-pandemic level. Even among the 1.3 million Australians who shopped online for the first time last year, almost half of this new contingent continued to buy online frequently throughout 2020. Omnichannel strategy will be critical to cater to this influx of new shoppers and the rising expectations of existing online shoppers. Consumers don’t see channels and expect a consistent experience across all points of their journey. Managing inventory and pricing across stores and online, and offering services such as click and collect and returns in-store, will become table stakes for retailers. Payments landscape evolves Payment trends have accelerated during the pandemic and use of cash remains low. Global payments giant FIS predicts that cash will account for just two per cent of payments in 2024, down from 8.3 per cent in 2020. The use of contactless and mobile payments has increased and buy-now-pay-later (BNPL) services continue to grow in popularity. Consumers are demanding more choice when it comes to payments, making it essential for retailers to accept various forms of payments, including Apple Pay and Android Pay, and BNPL solutions. Buy local According to US-based management consultancy Bain & Company, working from home is here to stay, marking a big shift in consumption patterns away from city centres towards suburban and regional areas. This move will require a change in investment strategy for retailers to ensure they can serve customers through profitable channels. The focus on the home and local communities has also accelerated the buy-local trend, with Australian shoppers backing local businesses through bushfires and the pandemic. Campaigns such as #BuyFromTheBush and #ClickforVic have provided invaluable exposure to local retailers and trained shoppers to spend their money where they can make a difference. For smaller retailers, telling their story through marketing can help customers feel more personally connected to a brand. A golden age for retail Meanwhile, some behaviour is shifting back to where it was before the pandemic. Cooking at home is being replaced by dining out, and foot traffic is slowly returning to major shopping precincts nationwide. Australians are, however, being more deliberate with their shopping trips and planning their store visits further in advance with the help of online research. This means brands must be visible in the ‘research’ phase of customer journeys and give shoppers a compelling reason to come in-store. Far from physical or traditional retail dying in Australia, the country could be entering a golden age of retail where sophisticated omnichannel strategies combine e-commerce capabilities with the community and customer experiences of bricks-and-mortar stores. Covid-19 removed many of the barriers to digital transformation, as organisations were able to quickly stand up digital projects in weeks to survive. The industry must now maintain the new pace of innovation and decision making to thrive in the post-pandemic retail landscape. About Gordana Redzovski Gordana Redzovski is Vice President for APAC at Vend, leading the cloud retail productivity and intelligence platform’s presence across the region, including in New Zealand, where the company was founded, and Australia, its largest market. About Vend Vend lets retailers run their business in-store, online and on the go. Used in more than 25,000 stores in 140 countries, Vend integrates with business applications including Afterpay, Square, Shopify, Commonwealth Bank of Australia, MYOB, BigCommerce and WooCommerce. For more information, visit vendhq.com/au. 56 RETAIL WORLD MAY, 2021