E-Commerce to Reduce In-Store Foot Traffic this Christmas

Frugal consumers and online shopping have reduced foot traffic in shopping centres across Australia, according to the new research, with centre operators needing to offer a greater range of shopping and services to lure patrons back.

“Digital platforms that enhance in-store customer shopping experiences and eliminate the divide between bricks-and-mortar and online operations are also part of retailers’ attempts to increase footfall,” says Kim Do, IbisWorld senior industry analyst.

An estimated 10.8% of all retail spending occurs in December in the lead up to Christmas Day. This year, the festive shopping is expected to remain subdued with annual retail revenue increasing by just 1.9% over the year to December 2017. “This means the average Australian will spend about $420 on Christmas gifts this year,” says Do.

“Trading conditions are forecast to remain challenging across the range of bricks-and-mortar retailing and service industries commonly found in Australian shopping centres, with annualised growth of between 1.0% and 2.2% over the five years through 2022-23,” explains Do. “Online shopping, however, is anticipated to enjoy annualised revenue growth of 9.4% over the same period.”

Digital ordering

Although online shopping typically presents a threat to shopping centres and traditional retailers, it can also present new opportunities for innovative marketing techniques.

“In addition to expanding tenancy mixes, shopping centre operators are expected to work alongside retailers to enhance customers’ in-store shopping experiences through leveraging technology advancements and online platforms,” says Do.

“Often consumers see retailers’ physical stores as showrooms, although they go on to order products online. As a result, shopping centres and retailers that are able to use their physical presence to complement online offerings and vice versa, will be in a better position to capture consumer spending.”

According to IBISWorld, technology will further enable shopping centres to engage and foster relationships with consumers. Some operators, such as Chadstone Shopping Centre, have announced plans to employ GPS and facial recognition within their centres. The new technology will allow operators to know when consumers have entered the centre and alert them of sales or activities as they shop, tailoring experiences based on each individual.

“Social media, smart phone apps and loyalty programs also present new ways for operators to renew excitement for in-store shopping experiences,” says Do.

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