Australian Retail Set For ‘V’ Shaped Recovery

Lockdown has affected every single aspect of modern life. From a simple trip to the shops to a day out with the family, much fo the country has stopped its outside life and turned online.

As a result of this shift online, consumer behaviour as experienced a shift. On May 9th. Prime Minister Scott Morrison announced the relaxation of certain restrictions. Some of these restrictions included the reopening of brick and mortar stores, which is the first step of Australia returning to ‘normal’. However, normal itself has changed, thanks to more than two months of lockdown.

Without physical stores open and the fear of catching coronavirus imminent on everyone’s minds, the need for e-commerce has been the answer to many people’s prayers. “[E-commerce] is a profound change in Australian shopping behaviour, and I believe this will continue to be the case post-COVID,” Scheine explained. “Australia was slower to adopt e-commerce than other markets – the percentage of online sales in Australia were typically half the level that they were in the UK and US. COVID-19 will change this, permanently.”

While the urgency of shopping online has helped strong growth for the platform, Schiene believes that brick and mortar will still be the coup de force for retail. “The majority of shopping will still remain in-store, but omnichannel selling is now an integral part of any retailers offering,” he said. “Savvy retailers will recognise that this trend is not just due to the pandemic, but will continue and these retailers will be focused on ensuring their in-store and offline sales channels are aligned.”

The road to recovery is going to be a tough one, but Dave Schiene believes it will be shaped like a ‘V’. “There has been such pent-up demand for products and services, that as lock-down restrictions are eased, shoppers will be purchasing in mass,” he explained. “That said, there has been such a massive uptick in unemployment that while the recovery will be V-shaped it will take a while for us to get back to pre-COVID levels. There will also be profound changes to the in-store shopping experience.”

Multichannel retailers are now faced with the challenge of reopening stores and remaining profitable while many states remain in lockdown. “After two months in lockdown, there are various steps and precautions retailers must take,” Scheine explained. “Before anything can happen, you must confirm with your State Government that you’re safe to reopen. While the Federal Government laid out its three-step road to recovery, it’s up to the states to determine when they implement it. If you are free to reopen, you need to prepare your staff and your store.”

For retailers that are reopening, it’s imperative that consumers are aware of this change. “Spread the word that you’re open again!” he said. “To start, it’s imperative to communicate with your customers to let them know that you’re open, what you’ve been up to, and why they should come back to visit. Utilise multiple communication channels, including email, SMS, and social media to make sure that customers don’t miss your updates. Tell them about your latest range, exciting updates or anything else that makes you proud about your business.”

Those who may find the biggest changes include local retailers, who don’t have the ‘deep pockets’ of larger companies who can reopen without a headache. “In many cases, the smallest retailers have been worst affected by the pandemic, as they don’t possess the reach, deep pockets and contingency plans of big-box retail,” Scheine said. “But there’s a strong sentiment for supporting local in Australia so after everything they’ve endured over recent months with coronavirus and bushfires, there may be an uplift in consumers shopping local.”

As a result of this pandemic, retailers who relied on pureplay experiences in-sore have had to include online offerings into their strategy. “When ‘normality’ begins to return over the coming weeks and months, perhaps the biggest change will be the number of small, independent retailers who are now active not just on their local high street, but online, selling to a customer base that spreads across Australia,” he said.

“In the past, we have heard directly from Australian retailers that, while they wanted to create an e-commerce experience, there was much inertia to prioritise omnichannel selling. Now nearly every retailer we speak to wants to sell online and make that transition now rather than months in the future.”

However, as the country recovers, pureplay online retailers may have to consider entering a multichannel offering for the foreseeable future.

“For many retailers during COVID-19, an e-commerce store was often the only way they could reach and sell to their audience. Retailers today are realising that they need to have both an e-commerce and bricks-and-mortar presence in the future,” Scheine said.

It looks as if Australia is slowly coming out of the vertex it was in a few weeks ago. Despite the hardship the entire country has faced ad continues to face, this may pose as a chance to re-evaluate a retailer’s selling points and bolster growth.

“As horrible as this pandemic has been both in terms of loss of life and impact to the economy, it has provided a huge opportunity for retailers to upgrade their operations and move to omnichannel selling,” Scheine said. “Shoppers will come back and the best retailers will take note that the changes from COVID-19, such as the move to selling online, will continue in the coming months and years.”

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