In the third iteration of Power Retail's Outlook lunch, Australian retailers caught a glimpse of the past, present and future of online retail in Australia and worldwide. Here are a few of the highlights we took away from the event.
2021 Was the Year of the Duck
With so many changes occurring in the retail landscape over the course of 2021, Natasha Sholl, Insights Editor at Power Retail, likened the last 12 months to The Year of the Duck. Much like a duck swimming, they appear calm and collected on the surface, only to have their feet working in overdrive under the surface. “Plus, this name rhymes with something that most retailers have muttered to themselves at one point or another,” she joked.
In a year of considerable changes, 2021 saw substantial developments compared to 2020, with notably higher transactions, but low AOV between January to March off the back of clearance sales until Jobkeeper ended.
Disparities Between Sessions and Revenue
With the first widespread cases of COVID throughout NSW in July last year, there was an obvious increase in sessions. However, revenue didn’t reflect this until August-September when delivery delays were flagged by Australia Post, and the holiday spend started earlier than ever before.
“Though Black Friday is now the highest trade day of the year over Boxing Day, sales were mostly flat in 2021 relative to 2020, with overall revenue and transactions decreasing in the lead up to Christmas,” said Sholl.
Seasonal Spend is Set to Return
Unsurprisingly, fashion remains the leading online purchase category however, there are shifts incoming. There has been a notable increase in Food & Beverages purchases since June 2021.
“While we expected to see more reactive category spend as a result of lockdowns and restrictions in the last year, what we in fact noticed was more a shift away from seasonality,” Sholl explained. Interestingly, the boost that Power Retail noted in December 2020 wasn’t matched in 2021. As mentioned earlier, Christmas purchases started earlier than ever before and travel spend (or lack thereof) changed what and when consumers purchased.
“Essentially, typical seasonal spend was turned on its head,” said Sholl. This is something that is expected to change in 2022, as typical cyclical behaviour resumes.
Following the benchmarking insights from Power Retail, guests at the Outlook lunch were presented with international data, trends and forecasts from Sucharita Kodali, Vice President and Principal Analyst at Forrester Research. Her keynote presentation ‘The 2022 Retail Reboot – What Changes and What Stays the Same’ covered key topics including consumer transformations, competition across the industry and the future of digital commerce.
While much has changed since the start of the pandemic, much has actually stayed the same. There are three major players in this landscape: retailers, marketplaces and brands. The triopoly is essentially frenemies working together, Kodali explained, with ongoing ‘tension to own the customer’.
More Competition Every Day
What’s more, there is more competition every single day. When she last spoke in 2020, Amazon was on top of the e-commerce world, and retailers were beginning to realise how dangerous this was. Today, there are myriad retailers outpacing Amazon in the e-commerce space, such as Shopify, which reported 86 percent YoY growth in 2020, 57 percent in Q2 2021 and 47 percent in Q3 2021.
Retail’s Kodak Moment
There has been plenty that has stayed the same when it comes to retail, Kodali explained. So, what changes? In the future, retailers will have to focus and rely on retail media networks – in-store, on-site and off-site.
Examples that businesses will focus their attention on new media, specifically retail media networks. This includes the traditional formats that businesses know well: first-party data, banner ads, etc.
However, looking forward, retailers should also pay attention to other destinations such as TikTok and Snapchat, as well as contact marketing and podcast marketing – these are essentially the updated version of radio advertising, Kodali shared. However, it’s important to note that these don’t have the last-click attribution that Google has.
What about the future of innovation such as the metaverse? In the words of a Forrester client: “How important is the metaverse to my organization? On a scale of 1-10, with 10 being ‘super important,’ I’d say -5.”
Find out more about Power Retail’s benchmarking data with a Power Retail Switched On membership. Members get access to current e-commerce revenue and forecasting, traffic levels, average conversion rate, payment preferences and more!