Wednesday, September 7, 2011

Retailers – Why Householders Are Wielding A Smaller Basket

The proof’s out –whilst there’s been an increase in our spending since 2003-04, we are devoting less of our disposable income to food, clothing, household appliances and household services. But whilst we have been saving more, we are also allocating a greater proportion of our funds to recreation goods, travelling and eating out.

According to the ABS Household Expenditure Survey released yesterday, spending on meals in restaurants, hotels and clubs has increased by 68% and recreation goods by 41%. All this indicates that we’ve shifted our spending pattern to enjoying experiences rather than accumulating material possessions with our hard earned pennies. You might argue this is because we’ve developed a social conscious and are more aware of consumption. Or that in this post 9/11, GFC world we’ve chosen to focus on living in the moment, enjoying our surroundings and sharing time with those close to create lifelong memories. Whatever the motivation, it’s an irrefutable change of behaviour.

So perhaps the complaints of suffering from the retail industry that are saturating our media of late could be justified? Coupled with the appreciation of the Aussie dollar and boom in ecommerce sites, it’s no wonder the Productivity Commission were called in to cast a shining light!  SBS’ Insight program focused on exactly this challenge last week in ‘The Big Sell’. According to David Rumbens of Deloitte Access Economics,

“We're seeing more money go towards services, towards things - over the last few years, like cafes and restaurants - towards home maintenance spending, towards travel and accommodation. A lot of those things, which are not in your traditional retail bundle, are getting a higher share of the consumer dollar. And of course more into savings accounts. So it's meant that, over the last year or two, retailers, to a large extent, have been stuck in essentially the slow lane, and then on top of that, you have the online presence eking out a higher share as well.”

But there is hope. Trendwatching’s report this month entitled ‘Retail Renaissance’ details how and why we all crave the social nature of the shopping experience… face to face, in a physical retail environment. They define the trend as:

RETAIL RENAISSANCE | Smart retailers are defying doom and gloom scenarios, as they realize that shopping in the real world will forever satisfy consumers’ deep rooted needs for human contact, for instant gratification, for the promise of (shared) experiences, for telling stories. Hence the flurry of new formats, technologies, capabilities, and products that now are delighting retail customers around the world.

So what are you doing to offer consumers a better experience? Are you providing free wifi (Tesco) or streaming fashion shows live in store (Burberry)? Perhaps rewarding people for check-ins (Macy’s) or signed up with Quickerfeet to offer nearby smartphone users a better deal? Or even offering in store workshops to educate how to better use your products (Miele, Sony)?

Call me naive but I think there’s much smarter ways to drive us back in store than cry poor. Australian consumers are demanding more of retailers. If you want to know where to start, head to the SBS Insight Twitter or Facebook pages and read the feedback of your customers!

Source: One of the world's leading trend firms, sends out its free, monthly Trend Briefings to more than 160,000 subscribers worldwide.

No comments:

Post a Comment