Visiting tourists give new life to shopping centres

While some shopping centres are replacing traditional retail offerings with more service-oriented offerings to offset the effects of constrained consumer spending, others, such as Chadstone Shopping Centre and Birkenhead Point Brand Outlet, are instead focusing on changing the consumer demographic.

While the slowing wages of Australian consumers has had a noticeable impact on the retail industry over the last few years, increasing spend from overseas tourists, particularly those from Asia, has become something of a lifeline for some retailers – one that Birkenhead Point Brand Outlet is looking to harness.

The outlet centre offers extended Shopper Hopper timetables, a Sydney Harbour ferry service which transports customers between various shopping destinations, as well as international newspapers and magazines, in order to tempt tourists.

Additionally, Birkenhead Point was the first retail shopping centre to partner with Ctrip, China’s largest online travel agency, providing shopping incentives to Chinese tourists in Sydney.

According to Mirvac, an average of 25,000 Ctrip customers arrive in Sydney every month, and each of these customers receive targeted Birkenhead Point ads as part of the partnership.

Department store retailer David Jones has focused its redevelopment efforts on this demographic as well, positioning its Elizabeth Street flagship as an international destination and  bringing exclusive brands from overseas in an effort to create a centre that tourists wish to visit.

“If we think of great international cities, you think of London; New York; Paris; Tokyo. Each of them has a unique and special department store experience that speaks to the culture in which they operate,” David Jones chief executive David Thomas said, noting that the flagship would serve as a “shining beacon” for the brand.

Increasing importance of tourism to retailers

According to Commonwealth Bank data, the weakening Australian dollar is playing a large part in bringing tourists to our shores.

“Overseas holidaymakers are flocking Down Under in record numbers and recent data from Austrade and BITRE suggests that international tourists are heading further afield to regional Australia once disembarking at capital city airports,” CommSec’s senior economist Ryan Felsman said.

Felsman noted that China continues to be the key source of growth for Australian tourism, with the annual growth rate in airline passengers growing almost 17 per cent over the year to October 2018, while visitors from Japan increased by almost 11 per cent.

According to IBISWorld senior industry analyst Kim Do, international visitors have become a significant market for many retailers over the past five years and are expected to be a crucial market for many retailers in 2019.

“The trends in Australian tourism have amplified the disparity in the performance of the various segments in the retail market,” Do told IRW.

“For example, despite weak growth for mid-market retailers, luxury retailers have performed exceptionally well in recent years, as they are able to take advantage of expenditure by tourists, which make up approximately 30 per cent of the luxury retailing industry.”

As Do noted, visitors from Asian countries in particular have some of the highest tourism expenditures, which couples well with the popularity of Australian brands in the Asian market.

“There is an opportunity for retailers to capitalise on this,” Do said.

Birkenhead Point is not the only centre focusing its efforts on enticing overseas visitors, with Chadstone Shopping Centre having implemented a free tourist shuttle bus that ferries visitors from the city directly to the centre, as well as a tourist lounge and group tours of the centre.

Chadstone works with retailers to create a bespoke experience for tour-goers, including monogramming specials, makeovers, product experiences and masterclasses, further enticing shoppers to make use of the feature and, potentially, spend more money.


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