2017 was a year of intense competition, transformative change and emerging consumer behaviours. As 2018 unfolds, we asked Stephanie Atto, Senior Research Consultant, ACRS Research Unit of Monash University to provide her perspective on how Australian retailers can evolve based on current Australian consumer demand and behaviour.
Getting the customer experience right is a differentiator for many successful retailers. It’s all about creating and curating a compelling experience to keep your customers coming back. It will also be necessary to reinvent the way your customers interact with you by using the latest technologies.
“Retailers will experiment with new and evolving technology, transforming and updating old business functions. Customer service staff will be better equipped to assist shoppers and provide a highly personalised experience through the use of handheld devices and customer data. Shoppers will be able to see and try products in virtual reality in-store, or augmented reality from their phones.
Shifts in shopper behaviour, tastes, and preferences will require retailers to adapt and re-evaluate how they think about shopper behaviour, particularly how and why shoppers interact with new technologies such as automation. The demand for natural and fresh will permeate product and store designs, with many retailers already opting for natural store interiors and extending this trend into new product lines,” says Stephanie.
Stephanie says there are a number of potential disruptors that could have a significant impact on the retail landscape.
“Online marketplaces will present both opportunities and challenges for Australian retailers. Despite Amazon’s lacklustre launch late last year, Amazon may still disrupt Australian retail, particularly if they manage to replicate the same-day delivery available in the United States across Australia. However, while everybody was focused on Amazon, Chinese ecommerce giants Alibaba and JD.com also opened offices in Australia in 2017, which presents an opportunity for Australian retailers to take advantage of high Chinese demand for Australian products.
Blockchain will continue to evolve in 2018, with new and developing blockchain technologies becoming more applicable to retail. Retailers will become more transparent as consumers will be able to track where ingredients are sourced and where the product is made. Luxury brands will adopt blockchain technology to improve tracking and authentication of products, reducing the issue of counterfeit products. These applications are only the beginning of what is possible with blockchain.”
The ability to understand and apply trends will be key to retail success in 2018.
“We can expect to see existing retail trends evolve further. Omnichannel retail will remain vital, with more and more shoppers using multiple devices to browse and research online, though the role of the physical store will evolve throughout the year. The physical store remains a key channel, with ACRS Omnibus data indicating that 66% of shoppers use the physical store to purchase non-grocery products most of the time. However, physical retail stores need to offer shoppers something that the convenience of online shopping cannot.
Retailers who provide interesting and unique in-store experiences will continue to entice shoppers to their physical stores. Retailers will need to ensure that information across both the physical store and online channels are consistent. We also expect to see further developments in automation technology. 2017 saw the introduction of chat bots to mainstream social media, with many brands using them to answer frequently asked questions or interact with shoppers. Self-checkouts evolved into unmanned stores, with retail giants such as Amazon and JD.com opening cashierless stores in the United States and China.
While Australia may not be ready for cashierless stores quite yet, we can expect to see elements of automation pervade Australian retail stores.”
Woolworths is one Australian retailer making changes to improve omnichannel and adapt to changing consumer behaviours and preferences by delving deeper into online grocery shopping without neglecting their physical stores. Woolworths has opened four new ‘dark stores’ that act as fulfilment centres for online orders at the same time as unveiling its new flagship store in Marrickville, Sydney. The store offers a larger range of fresh food, ready-to-go meals, and other healthy offerings in addition to a dedicated area for online orders.