This Australian Christmas season will be unlike any before for local retailers. Aneesh Reddy explains how.
Christmas is coming, friends, and like other countries across the globe, Australia is set for a retail explosion.
At the same time, there are several very important indicators to watch and key facts to consider that will tell you everything you need to know about when and how that explosion will take place— and whether it continues into the new year.
Rest assured: the Australian Christmas retail season is unlike any other. Here are five essential facts that help explain why.
#1: Consumer confidence is on the rise.
More than half of Australian retailers expect consumer confidence to rise over the next year, effective immediately. This means that retailers expect the consumer confidence needle to start moving now rather than later. As a point of comparison, roughly two in ten Australian retailers felt the same way at the same time last year.
What it means: Consumers confidence doesn’t translate to sales 100 percent of the time. Yet consumer confidence is a key leading economic indicator for any business, especially one that relies on B2C prowess and the general emotional state of customers at or around the time of purchase. When sentiment is high, so are consumer sales.
#2: Online sales leave room for growth.
Online sales are a huge part of overall world sales during the holiday season. Perhaps the strongest evidence of this is the fact that Adobe Digital Index predicts Cyber Monday to be the largest sales day of the 2013 holidays, outpacing Black Friday by $600 million. Furthermore, Cyber Monday is predicted to see a rise in sales of roughly 14 percent.
However, Australian retailers are not seeing that same “kick”; 25 percent of Australian retailers are expecting no sales during the Christmas period, and the majority of Australian retailers expect online sales to make up less than two percent of all sales.
What it means: While online sales may not be a big part of this holiday season’s take-home haul, retailers can take heart in one very important silver lining: there is massive room for growth online. China and Southeast Asia may leave tremendous room for growth in 2014, or retailers may be able to adjust and pick up unexpected sales this year with a little work.
#3: Early discounts abound.
Nearly one quarter of all Australian retailers will discount by early December, outpacing 2012. On the other hand, discounts will be more targeted than ever, tethered to individual customers based on individual products in specific stores for specific offers at specific times. This shows an increasing understanding of the consumer on the part of retailers as they pursue a more sophisticated sales strategy.
What it means: Expect leaner, cleaner, more targeted results for Australian retailers as a whole. The decision to discount differently marks a distinct mental shift in strategy for the industry. And that change may positively affect sales for Christmas 2013 and extend into 2014, too.
#4: Competition is stiff.
Both international retailers and retailers in Australia serve as a healthy threat to individual retailers. Surveys shows that individual retailers are divided fairly evenly regarding which group is the more significant competition to their business. Either way, Australian retailers definitely see competitors as an even or even more significant risk to business when compared to macroeconomic factors.
What it means: Early adoption may be salvation for individual retailers in Australia. While at-large economic factors can hardly go ignored, outpacing others is a key factor determining whether or not a specific company thrives and survives or shrivels and falls. Innovation is a requirement, not a bonus.
#5: Analytics are on the rise.
While analytics are just one part of a larger strategy to create customer sales, it appears Australian retailers have taken a page out of the playbooks of retailers in other countries: overwhelming margins (nearly 90 percent) of retailers say that analytics play a “critical”, “very important” or “important” role in the performance of their company.
What it means: Analytics are growing in importance in almost every industry in the world. This is especially true in the retail industry and even more the case with retail in Australia. Companies looking to capitalise will implement in-depth analytics this Christmas and cash in where others miss out.
Regardless of how it all shakes out, to retailers and consumers alike, Merry Christmas, to Australia and across the world!