This article is for the Professionals
Sign up to Inside Retail Professional now for only $5+GST for your first three months.
That's an 85% discount plus you’ll get FREE access to all Masterclasses during Retail Week. 5 retail industry leaders like you’ve never seen them before.Already a professional? Log in
With many people still fearful of hygiene risks on public transport, shoppers are still relying heavily on their cars to get around. Brown believes a parking subsidy, where consumers pay as little as $1 or $2 per hour in commercial spaces, will boost the return of office workers and shoppers.
“Let’s have a three-month program that starts in two weeks’ time when JobKeeper ends,
because there are many CBD retailers and restaurants that are going to hit a fiscal cliff at the end of this month when JobKeeper expires,” he said.
The slow return of office workers to CBD is not just an Australia-specific trend, it’s a global one, and it presents a major problem for retailers, as Jana Bowden, an expert in consumer psychology and consumer engagement at Macquarie University Business School, points out.
“PWC have just reported that only 10 per cent of Aussies want to go back into the office and 75 per cent want flexible options post-pandemic. We are seeing a cultural shift in terms of how we see work and our lifestyle. Increasingly it looks like the future of work is digital and distributed,” she said.
“City workers are the lifeblood of CBD stores. With the shift towards working from home shoppers are just not there like they used to be on weekdays. CBD statistics show that foot traffic is down in some cases to the tune of 30 per cent dependent on location. This does represent a real, ongoing threat to city retailers.”
The trend towards working from home has also disrupted shopping patterns, with Thursday night shopping no longer the peak period. Bowden said consumers are more likely to shop on Saturday or Sunday, and they are shopping with intent.
“They are more deliberate and planned and there is less time spent browsing. Sure conversion rates are higher when they do shop, but coupled with the shift towards weekend shopping it means that retailers are being squeezed to make in-store sales over a condensed period of time.”
With consumers spending more and more online in the last year, Bowden highlighted the importance of retailers being “omnipresent in consumers’ daily lives” in order to build value into the in-store experience.
“Online, whether it be via store websites, or socials, is the new access point for consumers,” she said. “Over 75 per cent of consumers buy products they discover through social media. Retailers need to increase their presence across social media platforms so that they can get into the consumers’ consideration set and be on their radar.”
With online and in-store teams working in tandem and maintaining constant dialogue with consumers throughout the shopping journey, Bowden expects retailers will have a better chance of getting customers through the doors.
Retailers that go above and beyond on customer experience and personalisation are expected to fare the best when it comes to drawing customers to their stores. And Brown said that any retailer still offering poor customer service won’t survive.
“As a retailer, you just can’t offer commoditised products with lousy service – you’ll go broke,” he said. “That was happening pre-Covid, so with reduced foot traffic it’s only gotten worse. I think any retailer worth its salt now is heavily focused on customer experience and personalisation.”
In order to create that valuable in-store experience, Bowden believes in-store activations and in-store only deals are key.
“It won’t be enough to have an event of a sales offer once a month. Consumers are looking for a reason to engage and event-rich destination shopping experiences might be one answer. Retailers need to use the physical space as a way to connect, engage and excite customers if they want to see them back in-store. They need to offer value-laden compelling in-store experience, not just a wide range of merchandise blandly displayed on the shop floor,” she said.
She advises retailers to develop an “intense activation program” supported by “outstanding customer service” to deepen the relationship with customers.