A new report from parcel delivery company CouriersPlease (CP) reveals that 86 per cent of Australian retailers are prepared for continued inflation, higher interest rates and potentially lower consumer spending. Furthermore, 89 per cent have rated their business success as good or excellent so far this year, which has been cited as a major factor for such confidence for the future.
The report details key changes retailers have made in the last two years that helped them overcome the challenges they have faced, and continue to face: 36 per cent revealed they had boosted their investment in eCommerce and marketing; 35 per cent have given their workforce more flexibility; 32 per cent have expanded their product range; 29 per cent have reviewed suppliers and switched or renegotiated supplier contracts; 23 per cent have introduced more efficient technologies; 23 per cent have improved their customer service; 21 per cent have tapped into new customer segments or markets; and 21 per cent have transitioned sales online, some of closing their bricks and mortar stores.
Reassuringly, only four per cent of those surveyed stated that their business had been too negatively impacted to make changes.
When asked about possible future challenges, 53 per cent expected their profits to be squeezed this year, while 50 per cent said they will experience lower revenue due to lower consumer spending, and 41 per cent will struggle to keep prices reasonable for their customers.
Other impacts retailers identified included postponing investment into the business (28 per cent), being unable to keep all their employees (21 per cent), and facing challenges meeting loan and rent payments (19 per cent). Only 10 per cent responded that their business would not be impacted at all.
“The results confirm the widespread impact the current environment is having on the business sector,” CP’s CEO Richard Thame said. “It appears that the economic climate will have the most impact on a company’s bottom line, with profits and revenue expected to take a large hit.
“With the CPI currently at 5.1 per cent, and an increase on the horizon, as well as interest rates continuing to climb, retail and logistics businesses will look for efficiencies across operations and other business areas to buffer these impacts,” Thame added.
When asked about the most important lessons they learned over the last two years, the top responses in the survey included being more flexible and adaptable to change, ensuring resilience and preparedness for the unknown; focusing on customer service and loyalty to continue driving sales; and the importance of investing in an online presence. Other respondents had an unfavourable perspective on Government support and stimulus during this time and revealed their biggest learning was that they can’t always rely on such assistance during tough times.
“It is promising to see that a significant proportion of retailers have already made changes that will protect their businesses over the medium term,” Thame said. “Retailers understand this year they will compete in a climate of reduced spending, and an online presence and a strong customer experience will help them maintain and grow their market share.
“Parcel deliveries are the only physical contact that pure e-tailers have with customers, raising the importance of the courier-retailer partnership in delivering a positive customer experience. Onboarding a courier partner with a proven record of fast, safe and flexible delivery options will become an increasingly important component in sales and customer loyalty strategies.”
