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Retailers look online as foot traffic dries up

Australian retailers are ramping up investment in their e-commerce operations, and in some cases altering the way products are delivered, in response to changing consumer behaviour around COVID-19, also known as the novel coronavirus.

The sharpest example of this may be AuMake, a retail chain catering to daigous (Chinese personal shoppers), which reported record online sales of $1.7 million last month, after the Australian Government banned tourists entering the country from mainland China, effectively wiping out its entire customer base.

The company has since temporarily closed certain bricks-and-mortar stores and reduced trading hours and rostering across its network to cope with the fall in foot traffic.

But it’s not just retailers that rely on tourists that are feeling the effects of COVID-19. Myer CEO John King told The Australian Financial Review earlier this month that he plans to invest $15 million in the department store’s online business in response to falling foot traffic due to the global pandemic.

And according to the latest data from ShopperTrak, foot traffic in shopping centres went down 16.8 per cent in the week commencing March 9, compared to the week before, and down 4 per cent compared to the same week last year. This follows last week’s 3.6 per cent drop from the week before, and 6.8 per cent drop year on year.

The figures appear to reflect health experts’ advice to practice social distancing and in some cases self-isolation to help stop the spread of the highly contagious virus.

The rise of no-contact delivery

Following the Government’s decision to ban all non-critical events of more than 500 people last week, many Australians have started avoiding crowded spaces, such as shopping centres, restaurants, trains and buses, and working from home.

This has presented an opportunity for companies in certain sectors, such as takeaway food. Deliveroo, Uber Eats and Domino’s have all rolled out “contact-free” delivery options, which customers can select when placing an order, so the delivery person knows to stand back from the door when dropping off food.

All three companies said the feature is meant to protect the health of both customers and delivery people.

Salesforce’s director of retail industry strategy James Johnson told Inside Retail Weekly that changing consumer behaviour around COVID-19 has led to an increase in online sales, though the software company has not officially crunched the numbers yet.

Johnson said, anecdotally, he is seeing a shift from in-store sales to online sales for some retailers in the region.

But it’s not always a simple case of moving sales from one channel to another. Woolworths was forced to temporarily suspend online delivery for most customers in Victoria due to “extraordinary levels of demand” for groceries over the weekend.

A Woolworths spokesperson told IRW it was looking to resume the service as soon as possible, but on Monday evening, it still wasn’t up and running.

“We believe this is a necessary step to allow our team members to prioritise restocking shelves and serving customers in our Victorian stores,” the spokesperson said.

The supermarket has also been forced to suspend its nationwide click-and-collect service, which it refers to as ‘Pick up’, due to shortages of certain items and to allow employees to focus on serving customers in-store.

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