Australian retail turnover may have dipped in December 2020, but the industry is heads and shoulders above the same period in 2019. What do these figures indicate about the future of retail in Australia?
On 5th February, the Australian Bureau of Statistics reported a decline in overall retail turnover for December 2020. The report found that turnover dropped 4.1 percent month-on-month, but rose 9.6 percent compared to December 2019.
In another report from the Reserve Bank of Australia, the number of debit card payments increased by five percent in the December spending period. Furthermore, credit card usage dropped by two percent.
So, what does this mean for retailers, and how can businesses adapt their strategies to benefit from these monthly figures?
Anita LeMaire, the Managing Director Australia of FIS, suggests that retailers need to develop better payment solutions to adapt to the online adoption, otherwise they may risk losing sales in the future.
“November spending figures were a beacon of light for retailers, showcasing Aussie spending at its strongest on record,” LeMaire said.
“…with the ABS figures confirming that our December purchases declined by a sizable 4.1 percent, the message rings clear that businesses must adapt to the changing environment to gain stability and grow, and as last-minute Christmas shopping and Boxing Day sales were unable to top the November spending spree, it really is a case of adapt or die.”
Retailers need to adapt to using biometric authentication to authorise payments, as customers demand further convenient solutions to shopping online and in-store.
“To adapt to the changing behaviour of Australian consumers, both online and brick-and-mortar retailers must ensure they have the correct infrastructure in place to facilitate a seamless customer journey,” said LeMaire.
This Christmas, shoppers splurged over $55 billion, spanning over the course of the second half of November to the end of December.
The inability for international travel has fuelled further spending over the Christmas period, leading to higher levels of discretionary spending, as Dominique Lamb, the CEO of the National Retail Association explained.
“The ABS December figures are in line with the NRA’s pre-Christmas forecast that the 2020 festive season would be the biggest on record,” she said. “Australian shoppers splurged more than $55 billion in retail sales throughout the second half of November and all of December.”
Cyber Weekend, which includes Black Friday and Cyber Monday, further fuelled this spending as online retail continues gaining momentum in Australia.
“From Black Friday and Cyber Monday in November right through to the final days before Christmas and Boxing Day, consumers across the country splashed their cash at the shops,” said Lamb.
“The reopening of state economies coupled with Australians unable to spend the holiday period overseas led to a higher than usual level of discretionary spending.”
In 2019, the overall online spend for the Christmas period was $3.4 billion. In 2020, it has risen by 59 percent o $5.4 billion, further cementing the importance of retailers having a robust and secure online platform.
“We also saw a substantial increase in online spending, with digital sales eclipsing the $5 billion mark across the Christmas period,” Lamb explained.
“These figures bode well for retailers, but as recent lockdowns in Queensland and Western Australian show the economy remains in a volatile state. Until a vaccine is widely administered there will remain a degree of uncertainty and the retail sector will continue to keep its guard up.”
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