The Retailer - Issue 68

A MAGAZINE FOR RETAILERS

LIFE AFTER COVID-19 What’s in store for retailers?

MARKETING A retailer’s 3-step marketing guide for smashing the new decade

CUSTOMER EXPERIENCE Experiential in retail, 2020, and beyond

May / June 2020

THE DAWN of a new DECADE

RETAIL.ORG.AU

12 CUSTOMER

EXPERIENCE Experiential in retail, 2020, and beyond

38 TECHNOLOGY

Payright pays off for Melbourne brothers and joint CEOs, Myles and Piers Redward.

46 DELIVERIES IN THE FUTURE A retailer’s 3-step marketing guide for smashing the new decade.

62 BUSINESS OPERATIONS

Loss Prevention for Modern Business.

22 RETAIL INSIGHTS: A LOOK INTO AUSTRALIAN RETAIL December 2019 - March 2020

30 DELIGHT YOUR CUSTOMERS AT EVERY CLICK, TAP, AND SCROLL Intelligent technology that delights the customer at every click. 70 BUSINESS OPERATIONS The dawn of the new retail decade comes with a new employer challenge: ‘How do you become an employer of choice?’

EDITORIAL EDITORIAL DIRECTOR Zoe Thompson zoe.thompson@retail.org.au

MARKETING

MARKETING DIRECTOR trina.dsouza@retail.org.au Trina D’Souza

54 WOMEN IN RETAIL Kelli Donovan of Pure Pod.

ART

DESIGNER

beth.hirsch@retail.org.au Beth Hirsch

aracomms@retail.org.au The Australian Retailers Association PUBLISHER aracomms@retail.org.au ARA media team MARKETING & DIRECTORY chris.sav@retail.org.au Chris Sav ADVERTISING & SPONSORSHIP

4. 6.

NEWS ACROSS AUSTRALIA

DELIVERIES IN THE FUTRE AND WHAT THEY WILL LOOK LIKE

12. 16. 20. 22. 30.

EXPERIENTIAL IN RETAIL, 2020, AND BEYOND

THE ROLE SOCIAL MEDIA PLAYS IN TODAY’S RETAIL ENVIRONMENT

PRINT & PRODUCTION ENQUIRIES

RUSSELL ZIMMERMANN CAREER REFLECTION

RETAIL INSIGHTS: A LOOK INTO AUSTRALIAN RETAIL

aracomms@retail.org.au ARA media team

DELIGHT YOUR CUSTOMERS AT EVERY CLICK, TAP, AND SCROLL

34. WHY ORDER MANAGEMENT IS THE KEY TO GREAT CUSTOMER EXPERIENCE 38. PAYRIGHT PAYS OFF FOR MELBOURNE BROTHERS 42. THE DATA INSIGHTS TO LIFT YOUR BRICKS-AND-CLICKS GAME 46. A RETAILER’S THREE-STEP MARKETING GUIDE FOR SMASHING THE NEW DECADE 50. LOOKING TO UPSKILL YOUR STAFF AND KEEP YOUR BUSINESS THRIVING? 54. WOMEN IN RETAIL - KELLI DONOVAN 58. A DECADE OF DEVELOPMENT FOR ELECTRONIC PAYMENTS 62. LOSS PREVENTION FOR MODERN BUSINESS 68. DAWN OF A NEW DECADE

THE AUSTRALIAN RETAILERS ASSOCIATION 112 Wellington Parade East Melbourne 3002 Founded in 1903, the Australian Retailers Association is Australia’s largest retail association, representing a $325bn sector employing more than 1.3 million people.

NEWS ACROSS AUSTRALIA

INDUSTRY CURRENT AFFAIRS

VIC PAUL ZAHRA

The Council of the Australian Retailers Association (ARA) is pleased to announce the appointment of Paul Zahra as its new Chief Executive Officer (CEO). Paul is a highly regarded career

retailer whose previous executive roles have included CEO and Managing Director of David Jones and senior leadership roles at David Jones, Officeworks and Target. Paul Zahra said: “More than 1.3 million working Australians are employed in retail. The sector is Australia’s largest employer of young people, and well over half of those employed in retail are women. Retail offers diverse and flexible career opportunities, everything from your first job, to a job in data analytics, merchandising or supply chain and logistics. “In the last twenty years, the disruption and transformation of the sector has been significant as a result of ongoing changes in technology and consumer behaviour. However, what excites me is the untold story of innovation, whether in store formats, in online marketplaces, or the many small businesses that started life in someone’s living room. “This sector has the capacity to adapt and evolve, the power to connect people and communities, and the ability to make dreams a reality. I am optimistic about what lies ahead and look forward to supporting and advocating for our members as we overcome challenges, embrace transformation and evolve with the customers we serve.”

image @Ron Tan

After the COVID-19 isolation period passes, a revitalised city heart awaits Perth commuters, shoppers, and diners. Perth architecture practice, Hames Sharley, were the lead architects on the redevelopment, which includes a new façade for a large retail precinct, known as Forrest Chase, together with a reimagined overpass on the Murray Street Mall and an enlivened gathering space, which locals refer to as Padbury Walk. Hames Sharley Director Derek Hays says that although the design was conceived before the emergence of the COVID-19 pandemic, the approach was rigorously future- focused. “Retail environments have been evolving for some time, as shoppers look to these hubs for much more than a retail experience,” Derek says. “The desire to not only shop but to gather together for other recreational and/or dining experiences was evident long before the pandemic — and that pattern looks set to continue, long after the pandemic passes.” The perimeter retail offerings in Forrest Chase were replanned to provide more appealing sized spaces in line with current retail requirements. Double-height shopfronts were designed to allow for retailers to fit out and revive Forrest Chase as a premier retail offering in Perth’s CBD. For more information, visit: www.hamessharley.com.au Hames Sharley architects revitalise Perth’s city centre in time for post COVID-19 retail resurgence. LIFE AFTER COVID-19 WA

AUS STILL OPEN FOR BUSINESS

As lockdown restrictions have impacted many businesses across the nation, some businesses have made extraordinary moves to reinvent or pivot their services. But as thousands of Australian small businesses continue to adapt

during these difficult times, they need support. With over 400 businesses already listed, stillopenforbusiness.com.au is the first website launched to act as a national up-to-date directory for Australian’s to find local businesses that are still in operation. The service is free and allows users to search via suburb or product type. Managing Director Rob Kennedy says, “We hope to provide a channel that Australian’s can use for all of their needs during this time. And ultimately, we hope to provide a platform that is not only useful to Australian’s but one that inspires them to continue supporting local businesses, which is so important for the economy once we come out the other side.” Businesses can upload their own details to create a listing themselves or opt to use a contact form on the website and the MMR team will upload their details free of charge. All business types can be included.

image @Douglas Mark Black

image @Douglas Mark Black

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DELIVERIES IN THE FUTURE AND WHAT

THEY WILL LOOK LIKE IF THE LAST DECADE OF RETAIL HAS TAUGHT US ONE THING, IT’S THAT EVOLVING CONSUMER EXPECTATIONS WILL CONTINUE TO INNOVATE DELIVERY AND RETURNS SOLUTIONS FOR YEARS TO COME.

Justin Dery, CEO, Doddle Asia Pacific

The only thing that doesn’t change is change, and a decade in retail is no exception. A decade ago, some of Australian retail’s current household names didn’t even exist – think Showpo, The Iconic, Temple & Webster, and Afterpay. As eCommerce has grown, so too have consumer expectations around deliveries and returns. A same-day delivery offer ten years ago would have seemed a farfetched concept, yet today, while not quite ubiquitous, it is much more commonplace. Adjacent industries have contributed to these expectations. Disruptor brands like Uber, Deliveroo, Netflix, and Spotify have drastically changed the way customers expect to transact. They’ve designed products and services to be seamless and instantaneous. Retail’s benchmark is no longer other retailers but other digital experiences.

Home delivery becomes a premium delivery option

Growth in eCommerce means growth in parcel volumes; this is obvious. However, there is only so much space for home delivery to grow, with a finite number of delivery drivers and a finite amount of road capacity to handle the increased volume.

Enter consolidated deliveries via click & collect and third-party pick-up options, which will play a more significant part in the delivery landscape over the next decade. This will result in home deliveries becoming a premium offering, given only to high-value customers or available to any customer but at additional cost. Delivering 50 parcels into one location instead of 50 individual homes is not only more efficient but also more environmentally friendly. As environmentalism drives a higher proportion of consumer purchasing decisions, our delivery options will also have to meet higher environmental standards. Australia Post has already begun investing in this area for customers via the launch of the Australia Post Collect & Return service earlier this year. This adds supermarkets, pharmacies, department stores, shopping centres, and banks to its 3,500 strong retail store network to enable consumers to pick-up (or return) their online shopping from a place that suits them.

AT THE DAWNING OF A NEW

As we enter the next decade, the technology exists to help us understand the underlying data behind returns, to reduce returns without penalising customers. Australia Post is leading again. They have launched a new free returns portal, which enables merchants to start collecting returns data to make more informed business decisions. Retailers should ultimately be looking to capture returns data to identify problems with products, sizing, imagery, and fraudulent customer behaviour. From there, it’s about using data to orchestrate how a return is processed and when it is received back to the distribution centre or 3PL. This allows retailers to streamline operations so the warehouse can focus on processing high demand or high-value products first, and low value items can even bypass the warehouse entirely and be delivered straight to charity. Change is a constant that serves to keep us on top of our game and forces us to innovate. A new decade will bring new technologies to drive better delivery and returns solutions that are more efficient, more environmentally friendly, and drive better outcomes for merchants and consumers. Luckily, in amongst all this change, we have the learnings of the last ten years to guide us to continue to delight customers and build and grow truly successful Australian retail brands.

DECADE, WHAT MIGHT BE THE NEW DELIVERY AND RETURNS NORM WHEN WE LOOK BACK IN 2030?

Free & fast delivery funnelled into click & collect

“Free delivery” had unprecedented success for retailers in the last decade in terms of checkout conversion; however, it came at a substantial cost. The next iteration of fast and free fulfilment will focus on driving consumers into stores by offering fast and free click & collect. For in-store click & collect to be fast, retailers will need to invest in digitising their click & collect experience in-store, abandoning the manual and paper-based systems that may have got them by in the past. They will also need to have robust inventory data, enabling better stock utilisation and strengthening net promoter scores (NPS).

Returns data becomes a new source of truth and profitable insights

The last decade saw retailers focus primarily on maximising sales by optimising conversion and acquisition. Consequently, the analysis was abundant in the impact of delivery options, payment methods, page loading time, imagery, and layout on checkout conversion. By contrast, returns were seen as a nasty side-effect of eCommerce success, and the prevailing view was that if you made returns difficult, you could reduce the number handled. What this failed to account for is that 41% of consumers have stopped shopping with a retailer following a poor returns experience.

Doddle

Doddle (Doddle Parcel Services Ltd) is a fulfilment technology company that enables retailers to offer a seamless click & collect in-store returns, and fulfilment from stores.

EXPERIENTIAL IN RETAIL, 2020, AND BEYOND From the boom in online shopping to conscious consumerism, the past 20 years has seen an incredible evolution of the retail landscape. And now, a new era is upon us: the era of experience. Through the early 2000s, online retail hit the world like a tidal wave, completely changing the way people find new products, purchase and engage with brands. Physical retailers found themselves struggling to compete, with customers no longer looking to them to inform and inspire. Instead, people went online, taking it upon themselves to research, read reviews, find discount codes, shop, and ship from anywhere in the world.

Teresa Aprile, CEO, and Co-founder of Brandcrush

IT WAS THE AGE OF MORE. MORE OPTIONS, MORE SHOPPING, MORE SPENDING AND MORE STUFF.

They are looking to shop more locally where they can, and knowing more about their brands and products they buy. They don’t mind a higher price tag, but they expect transparency and genuine interactions in exchange. This new type of consumer cares about where their dollars go, and which brands they support through their shopping. And this means that the role of physical retailers are becoming more important than ever.

This online shopping frenzy fuelled the globalisation of retail, giving consumers access to a dizzying number of options and price points. Social media sold us aspirational lifestyles and launched new products, while influencers helped brands infiltrate our newsfeeds and blogs.

At what cost?

With online shopping hitting an all-time peak in the 2010s, some of the downsides of this “more is more” model started to surface. Around the world, people became more concerned about sustainability, and the appeal of “buy now, think later,” consumerism began to lose its shine. Suddenly, brands and producers found themselves facing tough questions around their economic, environmental, and social impact.

More than just products, shoppers want an experience

Where online shopping gave consumers volume, access, and price point, physical retail offers a more holistic experience. It’s less transactional, more “human”. Physical retail is uniquely positioned to give consumers the chance to engage with brands and products tangibly. In-store experiences can share “behind the scenes” stories, giving shoppers an understanding of design and production processes. These experiences connect on the real and authentic level that modern consumers are craving.

Rise of the conscious consumer

Consumers today expect more accountability from brands than ever before. They want to know where their products come from. Are the supply chains ethical? Are the people making our items being well treated and paid fairly?

Creating destinations for consumers to visit, explore and learn

More so than ever, consumers are looking for quality over quantity. The experience they have within a physical store can add value to products far beyond just their price tag.

At Sephora Beauty Hubs, customers are given a fun and educational, retail experience. Interactive mirrors let shoppers virtually “try out” new products using augmented reality and get personalised beauty recommendations like skincare diagnostics and tutorials. The Hubs also offer Beauty Classes with makeup lessons and workshops led by beauty professionals.

The power of experiential for retailers

For retailers willing to embrace experiential, incredible opportunities await. By giving shoppers the tangible, real-world connections they are craving, not only will your business benefit, but you’ll demonstrate to customers that you value the relationship beyond just a cash exchange — building loyalty and trust. Here are just a few of the incredible ways retailers have been harnessing the power of experiential. Building brand narratives and showing where products come from In 2018, an online fashion brand, Everlane, invited customers to see first-hand how their new range of “outerwear with outlook” was made via the Everlane “Re-New” pop-up in NYC. This experiential concept store included a step-by-step installation depicting the process used to turn plastic water bottles into shirts, coats, sweatshirts, and scarves. Collaborating with other retailers or like- minded brands to give customers unexpected value-adds Retailers’ unique and targeted customer foot traffic can be an attractive proposition for CPG brands looking to connect with consumers. Sampling campaigns, traditionally reserved for street corners and train stations, can now be hyper-targeted through high foot traffic retailers, like Culture Kings. Using experiential marketing platform Brandcrush, Dare Sparkling Ice Coffee popped- up in Culture Kings stores across Australia, connecting with the retailer’s customer base of Gen Z and millennial males. Culture Kings’ customers were delighted with a surprise freebie, while the retailer was able to earn media revenue.

Creating a community that blends lifestyle experiences with retail

One of the keys to athleisure brand Lululemon’s success is its community-based retail model. This is brought to life through experiential stores that combine a retail store with a fitness “sweat studio” and “fuel bar” for healthy refreshments. Not only do these stores give customers a sense of belonging and a place to connect, but they also offer a chance to try-out selected Lululemon “gear” for classes before they buy.

Brandcrush

Brandcrush is a marketing platform for real-world customer engagement. The platform connects brands with consumers in the real world through product sampling and brand experiences, via a trusted network of businesses.

THE ROLE SOCIAL MEDIA PLAYS IN TODAY’S RETAIL ENVIRONMENT As technology continues to evolve, as does the way that consumers interact with their favourite brands, both online and offline. The upsurge in the use of social media and other digital channels means that the way retailers reach and engage today’s consumers is drastically different to 10 years ago. Social media, for instance, is an advancement that has presented a new frontier and boundless opportunities for today’s retailers to engage with more customers and expand their business.

Zane Sabré, Co-Founder and Managing Director, MAISON de SABRÉ

Convert content to grab attention on multiple platforms

Similar to the shift from radio to television, we are once again witnessing a massive shift where consumers are directing their attention, this time from television to mobile. But where to begin? Here are four ways you can implement an active social media marketing strategy to bring your business into the new decade.

Many brands have introduced social media marketing into their strategy, so it can be easy for your content to get lost in the crowded space. To stand out, it’s important to create ‘thumb-stopping content’ that is so cleverly crafted that it catches the customer’s attention and causes them to stop scrolling through their feed. Simply reproducing an advertisement used in print or broadcast will not suffice on social media. Create appealing content that can be converted and displayed across a multitude of social media platforms to set yourself up for a successful campaign.

Define the type of influencer suited to your brand

Influencers are at the forefront of the digital marketing movement and provide a great starting point for your business, big or small. With an effective working relationship, influencers can help build brand awareness and drive conversions. There are two main categories of influencer - macro and micro -, and you might find that one is better suited to your specific business objectives than the other. Macro influencers, for instance, have large follower counts and an inspiration-seeking audience; therefore, they are highly effective at driving brand awareness and extending reach. However, they often come with a hefty price tag and are less likely to lead to conversions, and are usually more effective for awareness campaigns. Micro-influencers, on the other hand, are often easier to relate to, which can help to drive conversions. While they have smaller follower counts, you will find that they often boast extremely engaged followers who are more likely to purchase products recommended to them.

Maximise your impact with minimal spend

For smaller, independent retailers, social media marketing can be a great option as it doesn’t require the large marketing budget that many other advertising avenues do. If you have a minimal marketing budget, consider offering contra opportunities to micro-influencers to engage audiences. This involves asking influencers to post content in return for receiving a particular product for free. By engaging these influencers, you can reach thousands of customers, without spending a cent on advertising space. Retailers worldwide are now turning to digital marketing as a new avenue to reach and engage customers. However, in a saturated market, it can be difficult for smaller retailers to stand out. By implementing a strategic, low-cost social media strategy, you could find it’s the next crucial step to grow your business.

Focus on targeted locations

Research shows that consumers require at least seven touch points with a brand before they will consider making a purchase. Therefore, consider implementing a social media strategy whereby potential customers will see the same product from several different sources. Influencers located in similar regions will often have shared audiences, therefore engaging with influencers in a single area can help increase the exposure frequency of your brand to the same people multiple times. This helps to saturate your customers’ news feed with your product, meaning you stay top-of-mind and relevant.

MAISON de SABRÉ

MAISON de SABRÉ refines the art of personalised leather goods with their signature premium collection of cases, wallets, clutches, and pocket accessories.

IT’S NOW MORE IMPORTANT

THAN EVER TO RETHINK THE WAYS YOU INTERACT WITH YOUR CUSTOMERS AND PERHAPS LOOK TO WHAT DIGITAL MARKETING CAN OFFER.

O ver my eleven years at the Australian Retailers Association, I have been fortunate enough to interact and connect with some of Australia’s most prominent and well respected CEO’s. Having been the owner and operator of small footwear chain, Sparks Shoes since 1978, the role of Executive Director at the ARA has not only kept me informed but given me a far broader perspective of the retail industry. Throughout my time at the ARA, I have developed an extraordinary amount of new skills that have enhanced my expertise in areas such as government, public speaking, lobbying, and media relations. I’ve seen the industry change drastically over the last decade. While we have incurred difficult times and faced a great deal of hardship, we have also adapted, triumphed, and made headways in various parts across the sector. The ARA has been involved in a range of policy and advocacy issues and has worked hard to ensure our members have a voice and feel supported by the industry. In 2013, major retail associations, including the NRA, MGA, and ANRA, came together to support a reduction in Sunday Penalty rates. To have all of these industry bodies unite for a common cause was truly inspiring to see. To further support our members, the ARA lobbied with the Reserve Bank of Australia to encourage banks to offer low-cost or smart routing. There is still more work to be achieved in this area; however, it is estimated that when fully operational, this will save the retail industry over $500 million annually. The development of the Major Retail Alliance (MRA), although only just commencing, will solidify the retail industry, particularly under the leadership of recently appointed CEO, Paul Zahra. More recently, the ARA worked with the ACCC to bargain collectively on rents with shopping centre landlords to support members affected by COVID-19. This enables members to discuss and share information relevant to negotiations, except for sensitive rent information, which will level the playing field between retailers and landlords. Within the organisation, I’ve seen our annual ARA Australian Retail Awards grow from 130 attendees to over 500 attendees. The Awards provide a stage for retailers across Australia to come together and be recognised for their outstanding contributions to the sector. When I started at the ARA, we had around 2,800 members. Now, as I leave, I’m pleased to see that we currently advocate on behalf of 7,800 small, medium, and businesses who are an essential part of the 145,000 retail businesses across Australia. I am truly proud of the work and resilience our retailers continue to show to keep this $320 billion-dollar sector thriving.

While there have been many rewarding parts of my career, I’ve also faced and overcome a few obstacles. The first was when I came to the ARA. I knew very little about the training and education sector, however, with support and guidance from ARA Chief Operating Officer and Director of the Retail Institute, Garry Terrill, and the Retail Institute team, I was able to expand my knowledge in this area and learn about the important role education and training plays in the retail sector. The second and perhaps the most disappointing obstacle was at our attempts to amalgamate with the National Retailers Association to create one voice for the industry. Although I would have liked to have seen this merger come into fruition during my time with the ARA, I trust that the ARA will continue to persevere and act in the best interest of its members and the community. The most recent obstacle that I and everybody else is facing is what is happening right now. In my 42 years of being a retailer, I have not come across times as complicated and as difficult as this. While these are uncertain times, my advice to you is this. Do not let worry paralyse you. Many SME retailers are unsure of what to do or fear making the wrong decision. You are better off making any decision than not making a decision and failing. As a general rule, put the customer first. Seize opportunities as they arise, and remember, COVD-19 won’t last, but your resilience and adaptability will. During challenging times, do not despair; we will get through this. Use the association for advice to help navigate your way through this and lean on industry peers for support. There are a lot of things I will miss about my role as CEO at the ARA. Being able to interact with CEO’s of major retailers, hear their needs and concerns, and then seek out ways to resolve their issues, was truly rewarding and empowering. I’ve worked with the ARA Council to make the best decisions on behalf of our members and the sector, and I’m grateful for the friendships I’ve forged with this incredible group of leaders. Another aspect of my role that I will miss the most is my interactions with the incredible ARA team. The ARA team is small and agile but works hard to ensure our members stay informed, educated, and up to date with the latest news in the sector. Every single employee is an asset to the organisation, and I can honestly say that I have thoroughly enjoyed working alongside every one of them. In closing, I would like to wish every one of you success and prosperity. I thank every member for their support over the years. Please continue to give Paul Zahra and the ARA your support so we can continue to grow the industry’s vibrancy.

Sincerely, Russell Zimmerman.

RETAIL INSIGHTS: A LOOK INTO AUSTRALIAN RETAIL DEC 2019 - MAR 2020

Tim Janczuk, ARA, Policy, Media and Communications Officer

At a time when the retail sector is facing unprecedented challenges, it is wise to remember an old proverb: In the midst of every crisis lies great opportunity. It is no secret that retailers across the country are facing incredible pressures, with difficult economic conditions exacerbated by a summer of bushfires, which had barely been extinguished before the onset of the COVID-19 pandemic. Now, more than ever, Australian retailers require the nation to demonstrate the resilience that has shaped the character of the nation, its people, and their businesses.

Let’s take a look retail over the past few months:

DECEMBER 2019

The December 2019 retail sales growth (2.66%) was disappointing after a sharp rise in November driven by relatively new US and China-inspired shopping events “Click Frenzy,” “Black Friday” and “Singles Day” where retail had its largest retail sales increase in 2 years – a record $27.9 billion. While year-on-year growth was the key index when interpreting retail sales data, month-on-month falls in Department Stores (-2.80%), Clothing, Footwear and Personal Accessories (-1.46%) and Household Goods (-0.29%) were three of the four worst December results in categories where November retail events were widely promoted. This underlined the point that December sales were probably pulled forward.

December

2019

Clothing, Footwear

December Sales (2.66%)

Department Stores (-2.80%)

Household Goods (-0.29%)

& Personal Accessories (-1.46%)

January

JANUARY 2020

There was little to cheer over the January retail figures, which saw an annual sales growth of 1.96%. Takeaway (4.33%) and Liquor (3.64%) the only categories to record significant improvement. All other categories either stagnated or went backwards. The Australian Retailers Association’s former Executive Director, Russell Zimmerman, said bushfires were always going to affect this month’s numbers and Coronavirus yet to impact ABS data. The biggest monthly drops were seen in department stores, household goods retailing and clothing, footwear, and personal accessory retailing. ANZ says consumer confidence fell 1.7% in the first week of January to its lowest level in over four years. A likely impact of the bushfires. Aside from the bushfires, there were other factors which contributed to the weak retail figures. December and January are traditionally usually the two busiest months boosted by Christmas and Boxing Day sales, but lately it seems to have lost its importance as more consumers do their shopping early in November for Black Friday and Cyber Monday sales.

TAKEAWAY

LIQUOR

NOVEMBER

DECEMBER

Christmas Boxing Day

Black Friday Cyber Monday

3.64%

4.33%

FEBRUARY 2020

February’s retail outlook experience growth as “easily predicted” by Mr Zimmerman given the consumer behaviour over the previous six weeks when the cronovirus crisis started to influence shopping habits. The annual sales growth was 1.82% with Pharmacies (6.64%), Supermarkets (3.57%) and Takeaway (5.05%) recording the biggest improvement on an annualised basis, while discretionary expenditure went backwards. “Household items, non-perishable foods, commodities like toilet paper, medicines, electrical goods, some department store lines…these are the categories that experience a surge when people believe they’re going to be housebound for a protracted period of time – which is exactly what’s happening,” Mr Zimmerman said. The ABS used data from supermarket scanners to conduct a more detailed analysis, which found increased purchases of frozen and canned fruit and vegetables, cereals and breads, toilet paper and tissues, pharmaceuticals and infant food and products — items that some supermarkets have now imposed purchase limits on, to stop panic buying.

MARCH 2020

March figures were no surprise in trend terms where there were rises in categories such as food, beverages, pharmacy, and electrical, offset by steep falls elsewhere in the section. The trend validated the buying behaviour in February, where customers began stockpiling goods ahead of anticipated lockdowns and saw food increase by 23.5%, groceries increase by 35.6%, and essential items such as toilet paper and pasta selling at twice the usual rate.

THE AUSTRALIAN RETAILERS ASSOCIATION’S CHIEF EXECUTIVE OFFICER, PAUL ZAHRA, SAID, “IT’S GREAT THE NUMBER OF

CORONAVIRUS CASES IS FALLING, BUT IT WILL TAKE TIME FOR THOSE TO RESOLVE EVEN AFTER NEW CASES STOP ALTOGETHER. ANY LIFTING OF LOCKDOWNS HAS TO BE DONE WITH THE HEALTH AND SAFETY OF RETAIL STAFF AND CUSTOMERS AS THE TOP PRIORITY. WE WANT TO OPEN FOR BUSINESS, BUT WE NEED TO DO IT PROPERLY WHEN WE DO.”

Business advice from Ardrossan Insurance Brokers

For natural disasters and cyber exposure, suitably designed insurance policies can provide some protection. Still, they will require a collaborative discussion and agreement between business, experienced broker, and insurer to design the appropriate cover. The solution for Coronavirus or other pandemic diseases is not provided by insurers as they will exclude within their policies any listed human diseases under the Biosecurity Act 2015. As of the end of January 2020, Coronavirus is now a listed disease under this Act. The next ten years will challenge all retailers when considering sourcing products, the use of technology, and distribution to its customers. The successful retailer will need to establish and revisit its Business Continuity Plan to ensure when disruption occurs; it is best positioned to manage and survive.

Revisit or create a Business Continuity Plan:

1. Retailers should ask suppliers where they source their product from, be aware of the materials/components within the final product and where these are sourced. Is there a bottleneck/critical point in the supply chain?

2. Review alternative suppliers from different regions and establish relationships Network within your industry, banking connections and government agencies such as Austrade to establish a broader range of suppliers

3. Ensure your relationship with suppliers is strong so in the event of interruption you can be a priority if the product is limited

4. Expand your supplier review to include critical support suppliers (e.g., technology, transport)

For additional information regarding risk and insurance, please contact ARA Insurance services on 1300 368 041 option 8.

Advocacy

THE ARA’S ADVOCACY EFFORTS In light of the COVID-19 pandemic, the ARA has been strongly advocating for all our retail members – large, small, and independent retailers – across multiple levels of government to help adversely affected businesses in financial hardship.

For more updates, advice, and resources, visit bit.ly/RETAILALERT

Enormous energy has been devoted to lobbying activity across issues, including wage subsidies, rent relief, cash flow assistance, support for business investment and digital innovation, and the development of resources to help retailers access these programs and comply with regulations. It is pleasing to see government action at a federal level to establish the JobKeeper program and the Mandatory Leasing Code of Conduct. It states moving to legislate the code and support rent relief measures. Significantly, ARA members have been granted interim authorisation by the ACCC to bargain collectively on rents with shopping centre landlords. This enables members to discuss and share information relevant to negotiations, except for sensitive rent information, which will level the playing field between retailers and landlords. The ARA has also worked to ease logistical pressures during the crisis, such as lobbying to lift delivery curfews to supermarkets and shopping centres to ensure critical goods are delivered. State governments across the country have released various stimulus packages providing urgent cash flow assistance to eligible retailers, such as cash grants of up to $10,000 and the waiving of selected government fees and charges while easing administrative burdens. This complements similar measures passed during the summer bushfire crisis to provide bushfire- affected retailers with financial support. The ARA continues to represent the retail sector across a range of issues: in the field of employment relations, we will continue to advocate for Award simplification and defend the sector from accusations of “wage theft;” we will continue to work with state and federal governments to ensure the retail sector has access to the right skills through support for training and development, and we will persist lobbying the RBA and working with industry partners to reduce transaction fees and charges to minimise the cost of doing business.

Retailers are working harder than ever to forge a path to success, building businesses that are

strong and resilient in the headwinds of change. The Australian Retailers Association stands by your side, and we will continue to work hard to forge a path to recovery for all sectors of the Australian retail industry.

Industry Insights

For the months of Jan, Feb, and Mar 60% of retailers expected their businesses to fall short of targets

Boxing Day/ Christmas Day sales for 2019

63.7% 63.7% of retailers recorded fairly flat or markedly slower than 2018

WHAT OUR MEMBERS TELL US

Since the start of February 75.12% of retailers have seen a negative impact due to the Coronavirus.

Sourcing stock from China 80.14% of retailers source stock from mainland China.

Loss of tourism in Australia 62.68% of retailers have been affected by the loss of tourism in Australia 37.32% of retailers have not been affected

About the Australian Retailers Association Founded in 1903, the Australian Retailers Association is Australia’s largest retail association, representing a $325bn sector employing more than 1.3 million people. Our mission is to ensure retail success by informing, protecting, advocating, educating, and saving money for members. For more information, visit: https://www.retail.org.au/australian-retailers-association/

OCT, NOV, DEC 2019

Exceeded target 17.8%

Did not reach target 51.1%

Did not reach target 51.1%

Met target 31.1%

Met target 31.1%

Exceeded target 17.8%

COVID-19

57.42% of retailers are reducing staff hours

34.21% of retailers are reducing staff numbers

56.70% of retailers are reducing forward stock orders

11.96% of retailers are increasing forward stock orders

32.06% of retailers expect to do nothing or other

Sources: https://www.surveymonkey.com/results/SM-NPGLXH9X7/ https://www.surveymonkey.com/results/SM-HT9MXH9X7/ https://www.surveymonkey.com/results/SM-M7RFNH9X7/ https://assets.kpmg/content/dam/kpmg/au/pdf/2020/australian-retail-outlook-2020.pdf

AS THE AUSTRALIAN E-COMMERCE INDUSTRY CONTINUES TO GROW, SMART RETAILERS ARE SEIZING THE OPPORTUNITY BEFORE THEM BY DRAWING ON INTELLIGENT TECHNOLOGY THAT DELIGHTS THE CUSTOMER AT EVERY CLICK. DELIGHT YOUR CUSTOMERS AT EVERY CLICK, TAP, AND SCROLL

LUPTAM QUI AUT QUI OFFICID QUE VERUMQUIS VERIS QUAM IUS. AD Chris Stolke, Manager and Head Digital Strategist, Pronto Woven

Despite representing the 55th largest country by population, Australia is the tenth-largest e-commerce market in the world – with analysts predicting Australia’s e-commerce industry will reach a value of $35.2 billion by next year! To capture this opportunity, investment in e-commerce technology is on the rise – here are three areas that offer the greatest return and fuel increased sales revenue.

on being price competitive, it’s important to have the right tools to deliver this. For instance, utilise a system that monitors other online stores and ensures your products remain competitively priced. Your value proposition may not be price driven and instead be focused on exceptional customer service. For example, returns are an area that often leads to dissatisfaction. According to Australia Post, 29 per cent of survey respondents said it was too much effort to organise a return. In comparison, 34 per cent indicated it was too expensive to return a product . Taking the hassle out of delivery and returns will improve loyalty. One Australian retailer living true to their value proposition is Victorian spirits retailer, Blackhearts & Sparrows. Their online presence well-styled, clearly categorised and lets customers know when to expect their orders. To deliver on such a promise, the online store is seamlessly connected to the retailers’ supply chain management technology so that orders are filled and dispatched with a fast turnaround.

Deliver the full package – from homepage to the doorstep

Whether a customer walks through the doors of your store or scrolls through your website, the process from browsing to purchasing and delivery needs to be frictionless. This can’t happen unless your systems, processes, and people are aligned. The retailers that are doing well are those looking at all parts of the equation. Just as a sold-out product is removed from in-store promotions, an item that goes out of stock should not be presented as a choice for your customer. The technology exists to help you monitor this and automatically update your website in real-time. After all, nothing’s more frustrating than moving through a virtual path to purchase, only to learn the item isn’t available at payment – or worse after. This creates a negative brand experience. We have the technology available today to allow us to complete visibility across entire operations from where software powering online stores talk to warehouse management systems. Retailers embracing this have a definite advantage in the ever-accelerating online world.

Sharpen your advantage with data and insights

Every retail business has the potential to be a data-driven business – taking the guesswork out of strategic decision making. Data is one of the most valuable resources a retailer has, and it can revolutionise the experience for your customers. For instance, do you know the delivery options your customers prefer? Are they more likely to want to express delivery, or perhaps they prefer click-to-collect? Research has found that 60 per cent of Australians will abandon a shopping cart if the shipping cost is higher than expected, so providing options and even special offers on this up-front, helps to capture sales.

Own your value proposition

The retail industry is saturated and incredibly competitive. To differentiate your business, retailers must define a value proposition and stay true to this. If your value proposition is based

The same goes for tailored promotions. If you know a large proportion of your customers purchase several items together, why not run a promotion and serve these as contextually relevant suggested items to shoppers as they browse your site? You can also cross-promote separate items based on the customers’ purchase history at checkout. Just like a high-performance retail staff representative knows to pick on subtle cues to guess a customer’s preferences, AI-fuelled business intelligence solutions can help you visualise and analyse large e-commerce trends as they happen. The online behaviours of a customer should enable your system to personalise better with tailored offers and recommendations. The more you understand your customers’ shopping habits and customise their experience accordingly, the more aligned your customers will feel to your brand. While many elements form a successful e-commerce strategy, it’s critical to keep the customer experience at the heart of your holistic approach and stay true to your brand’s

value across every channel. As the Australian e-commerce industry continues to grow, smart retailers are seizing the opportunity before them by drawing on intelligent technology that delights the customer at every click.

Pronto Woven

Pronto Software is an Australian developer of award-winning business management and analytics solutions. Pronto Xi, our ERP software, integrates accounting, operational, and mobile features in a single system – optimising business processes and unlocking actionable insights. Over 1,700 organisations have leveraged our industry experience and innovation to increase growth and revenue. Pronto Woven is a specialised business unit within Pronto Software.

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WHY ORDER MANAGEMENT IS THE KEY TO GREAT CUSTOMER EXPERIENCE USING TECHNOLOGY AND DATA TO REDUCE OVERSTOCKS AND PROVIDE CUSTOMERS WITH REAL-TIME INVENTORY TO ENSURE THEY RECEIVE DELIVERIES PROMPTLY.

Graham Jackson, CEO, Fluent Commerce

and trying to dispatch goods around the country is not only slow, expensive and bad for the planet, but also unnecessary when the technology exists to enable retailers to dispatch from store and route products from the customer’s local area. They need to unlock the power of their store network and turn them into mini distribution centres to reduce time, costs, and environmental impacts in the last mile delivery. Good order management software can help here and therefore improve the customer experience, reducing costs for retailers, and increasing customer loyalty. Successful retailers will need to continue to invest in order management systems that orchestrate orders for fulfillment and route products from an optimal inventory location. This system will provide real-time inventory visibility for both staff and the customer, so employees can process returns, and provide controls and feedback to management. Failure to capitalise on this has already heralded scaremongering of the retail apocalypse over the past few years, as we have seen many retailers struggling to keep up with new consumer expectations, increased global competition, and escalating expenses. Increased visibility and understanding of customer behaviour will also provide data and power better decision making for retailers. We will also be able to predict supply and demand more effectively, with the potential for auto-replenishing supplies directly to customer’s homes.

The past decade has seen the rules of the retail industry fundamentally change, with the next ten years set to take the industry even further into new territory. The one standout fundamental that has emerged and will continue to rise is that high-quality customer experience remains essential for business success with expectations rapidly evolving. Retailers will need to achieve this at increasingly efficient speeds and effectively use data to deliver a service at a hyper-personalised level, while at the same time contending with higher expectations around sustainable delivery and procurement practices. Underpinning all of this is order management. Successful retailers in this decade won’t rely on discounting; they’ll focus on their customers’ convenience. Order management software today can provide retailers with a real-time view of inventory so they can ensure products are delivered to customers most quickly and cost-effectively. Everyone has had poor experiences, particularly with online retail. An order set for Christmas or a birthday that isn’t delivered on time, or worse, is belatedly found to be out of stock, is a fast-track to an outraged customer, and a high potential for poor word-of-mouth and review. Australian retailers have a unique challenge about how to meet customer expectations for free, same day, next hour, and next day delivery affordably. Having one huge warehouse somewhere in Australia

AUSTRALIAN RETAILERS HAVE A UNIQUE CHALLENGE ABOUT HOW TO MEET CUSTOMER EXPECTATIONS FOR FREE, SAME DAY, NEXT HOUR, AND NEXT DAY DELIVERY AFFORDABLY.

It also reduces the overbuying of inventory, overselling, cancelled orders, and the need for more discounting to move stock. This data will also be used to predict future behaviour habits better, shaping products down to details like colour and style, to create bespoke offerings. Those retailers that successfully mesh digital and physical presences are likely to thrive, with stores acting as mini distribution centres and places to return and collect items. Even previously online-only, players are increasingly opening pop-up or even permanent stores to leverage the power of the store network. The next decade of retail will rely on investment in technology, such as order management software that can underpin these retail and customer service essentials. The retail rules of 2020 will likely be significantly different from those in 2030. Still, to get ahead in the next decade, retailers must continue to adapt, move forward, and always ensure the customer experience remains a fundamental business priority.

Fluent Commerce

Fluent Commerce is a cloud software company focused on distributed order management for omnichannel retail. The Fluent Order Management Cloud Platform is cloud native, fully managed and code-free. It includes the essential components for unified commerce: Distributed order management, in-store tooling, inventory & location management, customer service, fulfillment optimisation and reporting. This enables retailers and brands to rapidly drive up revenue, drive down costs, and win the convenience battle. Fluent Commerce works with global and regional brands such as Dior, JD Sports, Samsung, eBay, Woolworths, Target and French Connection.

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