Two weeks ago, Australian consumer confidence continued to drop as COVID-19 fears set in. In the 2nd Let's Regrow Town Hall information session, Power Retail dissected some of the biggest changes in customer behaviour since the outbreak of COVID-19.
In the past week, the number of virus cases has begun to slow down. As a result, there has been a direct impact on the stabilisation of consumer confidence. However, it’s still well below levels before mid-March.
In the last two weeks, Power Retail has seen a seismic shift in the sentiment towards spending more online. “This is a positive sign for online retailers of all types,” explained Grant Arnott, the Managing Director of Power Retail.
Two weeks ago, there was a significant decrease in interest in online shopping for under 25s, but that has since changed since the drop in COVID-19 cases. On April 1st, Power Retail reported that 39 percent of shoppers under the age of 25 would decrease their spending, with only 33 percent planning to increase. This week, however, this number has significantly increased to 50 percent.
While this number is increasing, the likelihood of online shoppers paying RRP is more likely than prior. “En masse, shoppers taking more of their traditional retail spend online are not as selective when it comes to seeking discounts as the cohort of online shoppers prior to COVID-19 were,” Arnott explained.
Particular categories within the retail industry have been harder hit than others as a result of COVID-19. Fashion has seen a specific hit as Australian consumers spend time indoors.
However, throughout the month of April, 36 percent of retailers have reported an increase in online sales. Forty-five percent have still reported a decline in online sales, but that number has reduced from March, where it sat at 64 percent.
Many Australian retailers see fashion as an essential retail category, even if they can’t wear the clothes they buy outside. “With the shackles lifted and fashion seeing a rise from 22 percent to 30 percent intending to increase fashion spending online,” Arnott said.
According to the Power Retail benchmarking data, the freefall in sales declines that afflicted many retailers in March has not continued to the same extent through April.
“Over the past week, an increasing number of retailers saw big surges in sales volumes, with a big rise in retailers recording sales increases of 20 percent plus,” Arnott explained.
The percentage of retailers who are seeing increases of 50 percent or more have risen in the last two weeks, from 11 percent to 14 percent. However, retailers who are experiencing a decline in sales of over 50 percent has also increased from 16 percent to 19 percent.
“Fewer retailers are seeing no change, but there are extremes at either end of the scale bringing either great pain or great success,” Arnott explained.
As Australians see the light at the end of the coronavirus tunnel, more are regaining confidence in online purchases. As such, categories in fashion may start increasing in their sales sooner than expected, as consumers consider the group as ‘essential’.
Let’s Regrow information session data is based on Power Retail’s weekly research program, which surveys tens of thousands of Australian shoppers and online retailers each year. This is combined with live data extracted from our cutting-edge Retailer Performance Benchmarking Platform, reflecting daily trends across key e-commerce metrics. Power Retail members have unlimited access to the full Power Retail E-Commerce Intelligence Platform that’s driving the Let’s Regrow Town Hall Series – that includes the latest Shopper insights, critical data on Australia’s Top 500 Australian Online Retailers and live Retailer Performance Benchmarks.
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