What Lies Ahead For The Australian Retail Sector In 2021
While many industries have taken a hit this year thanks to Covid-19, is the Australian retail sector currently sitting in the eye of the storm?
In 2019, the retail sector represented $300 billion of all consumer spending in Australia. Fast forward to 2020 though, and it’s safe to say that things have dramatically changed. With consumer confidence, a drop in household incomes and lockdowns affecting retail businesses big and small - is it really all doom and gloom for this industry?
What Changed For Australian Retail Operators In 2020
Sudden and drastic lockdown measures in Australia confined most of us to our homes, and it’s safe to say that a lot of us weren’t quite ready for it. The fallout involved mass panic shopping for consumables like food and sanitary items, which were only enhanced by the forced closures of many restaurants, cafes and hospitality outlets.
With so much spare time on our hands plus a new wave of employees forced to work from home, other Australian retail traders that benefited from the pandemic included those that provided electronics, homewares, furniture, and of course just about anything DIY related - think Bunnings, Officeworks and Kmart. In fact, Harvey Norman founder and retail titan Gerry Harvey reported a 185% increase in trading for July and August 2020 when compared to the same period last year. However, while some are booming, others are floundering - particularly for retailers stocking apparel and footwear, or items that were deemed a “luxury” as opposed to more essential items.
In turn, the pressure on retailers to remain relevant in the eyes of the consumer have never been stronger. Australians are shopping differently, paying differently and their values are shifting - so what can retailers do to keep up as we head into 2021?
Australian Retail Industry Trends Predicted For 2021
While it’s certainly been a wild year, unfortunately the world we live in doesn’t look like it will be returning to “normal” anytime soon - so how is the Australian retail industry adapting?
Click And Collect - Many small retailers simply aren’t equipped to have large scale distribution warehouses for online shopping, and so the “click and collect” method offers a happy medium for those without as much e-commerce experience, particularly if it’s “no contact”.
Shop Local - Whether it’s due to a desire to support a local operator or impatience regarding long shipping delays from overseas, consumers are turning away from large scale traders in favour of spending their hard earned cash with “the little guy”.
Sustainability Is In - Unsurprisingly, caring for the environment and ethically sourced materials has never been more “on trend” than it is now - and right in the middle of that battleground is retail, a huge contributor to the environmental problems faced around the world.
Personalisation - If there’s an issue, query or question, shoppers want a solution - and they want it now. Retailers need to be readily accessible via a wide range of digital options including traditional methods like phone and email, but also social media, live chat and even video calls.
It’s The Digital Age - One of the major hurdles that retail operators have faced is that their digital presence and online capabilities simply weren’t ready for the sudden closures of their physical storefronts - but the good news is that more are getting “on board” every day.
Does Your Australian Retail Business Need Some Financial Advice?
Here at Muro Accounting, the way that we have developed our business support services for our family of clients helps them to really understand the numbers that we prepare. In turn, this allows them to focus on the things that they do best - great products, great services and ultimately, continuing to run a great business without sweating over the numbers.
We focus on getting our clients to look to the future of their businesses instead of taking a reactionary approach, and consider every business owner to be an entrepreneur. If you’re ready to think big and to get your financial ducks in a row for 2021, please get in touch with us today at award winning Muro Accounting to ensure that you’re on the right path for success.