Not everyone was cheering for the prolonged March summer as unprecedented heat through most southern states negatively impacted sales across every vertical. The Easter month saw a drop in retail sales of just over eight per cent overall with Fashion and Accessories hit the hardest with a fall of almost 20 per cent compared with March last year.
March 2016 vs March 2015
The end of February and March regularly see retailers stocking shelves with autumn stock but this year, shoppers were still clamouring for summer sale stock of bikinis and sandals, leaving the autumn shades for next month.
There was some high growth seen sparingly in the Sporting sector in the ACT and the General sector in NSW which both saw over 20 per cent growth compared with last March.
Victoria experienced the greatest drop overall compared with March last year of over 16 per cent across all sectors.
As expected, March saw a big increase on February of over 18 per cent with Furniture the biggest performer at 25 per cent growth closely followed by the Fashion and Sporting sectors.
One on One with Zjoosh CEO and Founder, Wayne Rigney
- Tell us about your retail sales over the past month.
We’re experiencing growth overall across our brand but the growth trend was down in March this year. We sell a variety of stock including fashion, accessories, furniture and homewares within the gift category. We had a significant decline in sales in March this year compared with last and it’s almost entirely within our fashion department and due to weather this year. We have hundred’s of thousands of dollars of autumn and winter stock to move but no one buys when it’s so hot. Not just winter clothes but winter colours within our accessory department has all seen the impact of weather this month.
- What’s your biggest operational challenge at the moment?
We’re currently going through a very busy growth period as we will have opened five new stores in six months by June this year bringing our total to 11 stores based in and around Sydney. Finding the right people for our stores is our number one challenge as the first engagement a customer has with a young brand such as ours is critical. That first experience, if brilliant, could mean a customer for life.
In addition to the people within our company, currency and it’s continual movement has a big impact on us. In the last few months alone has seen the Australian dollar move from 68 to 76 cents in the dollar, that’s a big difference.
- What’s working really well for?Our rewards program is working exceptionally well. We have been in business since 2012 and have over 25,000 loyal customers in our database. Eighty percent of our customers are linked to a reward member which means we’re then able to tie that into our promotions and communications calendar. What really excites me about the program is that customers come back into the store to buy gifts and homewares with their rewards points which means it is truly driving loyalty.
- What are you most concerned about in retail in the short-term future?
Consumer confidence is still very fragile in Australia and it doesn’t take much to knock discretionary spend. In our stores, over 50 per cent of our purchases are a gift which is a relatively stable category. Our average customer comes in and buys something as a gift and a little something for themselves however if consumer confidence drops significantly, people may be less inclined to put that extra item in the basket. The housing market has been a confidence builder for Sydney supporting sustained spending but as we come off that high, it will most likely result in softer retail sales.
- What are you looking forward to this year for your business or your sector?
Beyond opening new stores this year, the Zjoosh brand will be expanding into even more categories within the gifting sector. We will also be investing significantly online and have just relaunched our new website last week. In addition, our next opportunity will be to extend the brand beyond Sydney and further afield.
By Aaron Blackman, CEO of Retail Express. Retail data drawn from the AustralianRetailIndex.com.au.
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