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Australian retail: what’s next?

3 min read

Australian retail is barely recognisable thanks to COVID-19. How can the sector survive?

The retail sector has taken a huge hit over the past month thanks to broad sweeping lockdowns.

While bricks-and-mortar retailers in non-essential categories face the harsh reality of dwindling foot traffic, online retailers are experiencing a surge in visitors. The week of 22 March had the highest consumption of ‘online shopping’ at 52% above a six-month average.

Amobee Brand Intelligence: BI Consumption Index of “buy online” or “shopping online” or “online shop” aggregat-ed engagements, across all categories, in the last six months, in Australia only.

The retail world has been turned upside down

COVID-19 has exposed the weaknesses of offline-centric businesses, but they need to pivot online quickly to survive.

In early March, the most searched online retail categories were clothing and electronics. Towards the end of the month, interest shifted to more essential items as people prepared to bunker down.

However, this April saw another shift in online interests as more people try to get comfortable with their new stay-at-home lifestyle. The top products and categories that saw an increase in online engagement include:

  • Family Lifestyle
    • Consumption of ‘delivery service’ increased by 484%
    • Interest on ‘Air Fryer’ for a better home cooking experience is up by 453%, compared to March
  • Personal Care and Nutrition
    • Gillette is the highest trending brand in this category with interest up by 275% from the previous month
    • Essential vitamins and minerals closely following at 106%
  • Home and Garden
    • And finally, there were also spikes for items like mattresses, up by 50%, and plants, up by 26%, as more people aim to improve their homes

While online shopping only accounted for 9% of total retail sales in 2019, it is expected to grow further in 2020 as more traditional businesses go digital.

Upside down is the new right side up

Businesses are desperate for ways to quickly adapt to changing consumer behaviours.

With Coles, Aldi, and Woolies still showing a shortage of essential goods, consumers are looking at online alternatives such as Cleaners Supermarket, Bulk Wholesale, Pharmacy Online, The Bidet Shop and even Maccas, who recently trended for offering staples like milk, bread, and eggs at the drive-through.

Smart retailers are prioritising their online offerings to address the COVID-19 world. 7-Eleven recently launched an online delivery service, following in the footsteps of food delivery services offering contactless delivery, meeting the needs of customers and fitting into the focus of staying home.

What can retailers do today?

Easter, traditionally the retail industry’s second-biggest trading period outside Christmas, was dealt the blow of isolation and store closures, following a slump in retail in early April. However, top brands such as Myer, Coles, and Woolies still saw huge interest during this period.

While Coles had the highest volume of content consumed during the Easter period, any Easter content was 11 times more likely to be consumed in association with Myer, who over-indexed with the term ‘free delivery’, after reducing its delivery threshold to $49 and updating its return policy.

Woolies, on the other hand, saw 7 times more interest-driven by Easter-related content like ‘best seafood for Good Fridays’ and reduced weekly specials due to COVID-19.

Amobee Brand Intelligence: BI Interest Skew Index of Easter against key Australian retailers. Analysis across all categories, timeframe March-April 2020 (Easter period), Australia only.

Stefania Accardo, Head of Strategy and Analytics at Amobee, commented, “The low association skew between Easter and online retail brands, like eBay and Amazon, shows a clear opportunity for these retailers to position their e-commerce platforms as go-to shopping destinations during the holidays and special occasions.”

“With Mothers Day around the corner, retailers have a great opportunity to capitalise if they act clearly and quickly.” Accardo adds.

As more people stay at home, the increase in time spent online and watching TV represents a huge opportunity for all brands to reach multi-screening Australians.

According to Liam Walsh, Amobee’s SVP for Australia and New Zealand, retailers need to mesh data with changing consumer trends.

“By combining real-time data with current behaviours, retailers can put new strategies in place to reach their customers during and after lockdown,” Walsh commented. “To make it through 2020, we predict that retailers are likely to double down on their investments in data driven digital marketing across all screens so they can connect with consumers in a fast-transforming retail landscape.”

All insights and data were taken from Amobee’s Brand Intelligence Tool.