While COVID-19 has certainly challenged Australia’s retail industry, several Griffith Business School marketing experts believe it has also provided opportunities and lessons in new ways to meet customer demand.
Dr Charles Jebarajakirthy says the retail industry remains the third biggest industry in the country in 2020.
“Retail contributes at least $150 billion of revenue and 4.1 % of our GDP, with about 140,000 retail businesses in Australia employing 10.7% of the nation’s workforce,” Dr Jebarajakirthy explained.
“After our initial lockdown, in late April 2020, the Queensland Government gave the green light for physical retailers to reopen their doors under the public health guidelines and a collaborative recovery protocol was developed to enable this to occur.”
While Dr Jebarajakirthy accepts it has been challenging to follow the Protocol, especially for the small brick-and-mortar retailers, with some of the compulsory steps incurring extra operational costs, a new mixed offering is returning dividends.
“There are certainly new retail opportunities amid COVID-19 damages”
“There are certainly new retail opportunities amid COVID-19 damages,” he said.
“Responding to the health and space annexation requirements in this pandemic, many retailers have adopted a mix of click-and-collect (book-and-shop) in their practices and moved their main portfolio into online distribution and/or e-commerce.
“There has been increased demand on online shopping as the government emphasises the physical restrictions, with many Australian retailers establishing ‘dark stores’, while closing some of their brick-and-mortar shops, to handle online shopping demands.”
A dark store is a warehouse or distribution centre to maintain the online shopping goods and similar to shipping company storage; however, it is owned and managed by the retailer itself.
“Some giant retailers like Woolworths and Coles have taken the dark store opportunity further with big investments in technology and automated distribution centres in Sydney and Melbourne,” Dr Maria Dharmesti, Sessional Lecturer in Marketing at Griffith Business School said.
“The pandemic ‘forced’ the market to go online, evidenced by the increase of online and click-and-collect demands nationwide,” Dr Dharmesti added.
“There will also be more opportunities for small and individual retailers to use Shopify or eBay-like platforms to open their retail business there and even the National Retail Association (NRA) offers some financial assistance for small and medium retailers to establish their e-commerce.
“From managing the physical store display and layout, retailers will now have to consider managing the online store display and layout.
“The adoption of financial technologies, such as Afterpay and Paypal allows another opportunity, as these can ease the consumer purchase decision in the online market.
“Additionally, retailers are also having to manage delivery of goods as well, by partnering with Australia Post and/or other expedition companies.”
Dr Jebarajakirthy said another notable trend in the COVID-19 era is a customer movement towards low cost products.
“With job cuts, and declining household income due to COVID-19, people want cost-effective products and deals. They are more inclined to purchase from discount stores and actively searching for special deals and offers, and private label products,” he said.
“Promotion is also another area of opportunity.
“Retailers should cut down on mass scale expensive promotional efforts, for example promotion via mass media, and adopt cost-effective promotions, such as social media promotion and digital mobile advertising.
“It is also recommended to emphasise more special offers and deals in the message than the other aspects of the promotion since customers are looking to save retail purchase expenditure.
“2020 has certainly beenachallengingyearfortheretailing industry while consumers are more concerned about minimising physical interactions, so they are looking for online shopping and click and collect option.
“Customers are also after cheaper deals to cope up with income cuts and increasing rate of unemployment.”