Few industries have been harder hit by economic headwinds than retail in 2023; the impact often felt more keenly by small retailers.
Consumers are also more particular and cautious in their shopping habits this peak season. Lightspeed’s 2024 Retail Insights and Shopper Sentiment research sought to understand those habits and patterns. But what are the key trends amongst Aussie shoppers? And how can smaller retailers meet and exceed their customers’ needs?
How are Aussies shopping?
In the age of omnichannel commerce – when retailers unify their in-store and online, back-end and front-of-house operations – harnessing online and in-store is key to success. Despite the boom in eCommerce in recent years, the appeal of in-store shopping is not diminishing. Far from it.
Lightspeed’s research reveals that 76 per cent of consumers shop in physical stores at least once a month, while 45 per cent research a product online and purchase in-store. Interestingly, Gen Y shop online more frequently (27 per cent multiple times a week) than Gen Z (12 per cent). Those aged 60+ are shopping significantly less online, but far more frequently in-store.
In total, 38 per cent are weary about in-store prices being more expensive, 39 per cent favour stores with loyalty programs and 53 per cent expect free returns. All of those reflect current cost-of-living pressure, with Australian Bureau of Statistics data revealing that, despite an increase in September, household spending on goods is down 0.1 per cent in 2023.
When consumer spending softens for a prolonged period, as it has in 2023, demand often releases during peak season. For local retailers, tapping Aussies’ support for local businesses could be fruitful. That’s because 34 per cent value deals for locals, 25 per cent want locally-made products, 24 per cent prioritise local businesses with shared values, and 22 per cent want businesses who foster a sense of community.
Small businesses, big strategies
First, understand your audience so you can tailor your approach accordingly. If your audience is Gen Z and Gen Y, an online presence will be effective, whether as the point-of-sale, or to steer them in store. But if your audience is older, your physical presence will be more effective.
For most retailers and shoppers, an omnichannel strategy with online and in-store working in unison is the most effective approach today. Google searches for ‘xx’ + ‘near me’ are rising, so even if they browse online before making the final purchase in store, ensure your website and products are prominent online during the ‘discovery’ phase. With real-time inventory management it’s easy to keep holistic tabs on all your stock, so you know what to promote, what to pause and how to handle queries.
With incentives and rewards in demand, consider loyalty programs, or upsells like ‘buy two, get one free’ or a discount on their next purchase if they join your mailing list. With cost-of-living top of mind and price being a significant factor for 34 per cent of Aussies, tap into the ‘local’ connection as a point of difference.
For example, if your products are locally sourced or produced, shout about it. Consider promotions for locals that you can advertise with decals in your shop window. Talk about your brand’s purpose and values to foster connections. Be clear about your delivery and returns policies prior to purchase. Win over those worried that in-store shopping is more expensive through signs or decals about ‘prices’, ‘discounts’ or ‘sales’ in your store.
While economic pressures might have you worried, by taking the time to understand your customers, their pain points and their habits and preferences, your business will be better placed to succeed during peak season, and long after it.
