Four ways to plan ahead for post-pandemic shopping
It’s the longer-term impacts — particularly for consumer shopping behaviour — that offer challenges and opportunities for Australian retail.
The COVID-19 pandemic has had both short- and long-term impacts on Australia’s retail environment.
Current lockdowns and delayed vaccine rollouts pose an immediate risk to the retail landscape. Yet it’s the longer-term impacts — particularly as they relate to consumer shopping behaviour — that indicate both challenges and opportunities for Australian retail.
Our recent research in partnership with Snap (the parent company of Snapchat) looked at over 20,000 shoppers globally, including 1,500 Australians. It revealed Australia’s unique retail position, along with four key insights that help shine a light on the future of Australian retail and how Australian SMEs can prepare for them.
Here’s a summary of what we learnt below:
1. Online shopping is not (always) the right fit
In the past year, Australian shoppers spent $99.5 million on purchasing clothes online that were returned because they don’t fit. More than four in ten Australian shoppers state that not being able to see, touch and try out products are the most significant factors that put them off online shopping.
Combined with increased demand for touchless retail as a result of the pandemic (57% of Australian consumers would like COVID-19 safety measures in store), this indicates the importance of technological retail solutions that can support virtual product personalisation and testing at the point-of-sale.
From prebooking store visits and home delivery services to mobile-led product recommendations, Australian consumers indicate significant levels of interest in service and technological innovation that can provide a seamless shopping experience in-store.
Source: Foresight Factory/Future of Shopping report
3. Virtual testing will be key to e-commerce
The report shows the future of online shopping could be augmented reality (AR) “try on” technology, which is predicted to reduce annual online returns by 31%.
For example, brands like Gucci, FARFETCH and Prada all using Snapchat’s Try-On technology to help shoppers get a feel of their purchases at home, before they buy.
We will continue to see this technology move from fun engagement to shopping utility. In-store, virtual technology is a key attractor — more than one in four Australian consumers would go out of their way to visit a store that had at least one advanced technology feature such as smart mirrors and interactive screens.
Services that enable shoppers to try on clothes and makeup virtually, or create unique, personalised products on screens in-store are likely to entice young shoppers to bricks-and-mortar.
3. Connected shopping means encouraging mobile use in store
Looking at younger shoppers, two in five Gen Z consumers say there is a continued demand for in-store shopping experiences that are inherently social.
Mobile is already the preferred channel for 34% of global consumers when shopping for products, second to shopping in-store at 43%, and stretching ahead of shopping on PCs at 23%.
The rise in sharing product images with peers is an example of the type of social shopping retailers can seek to replicate — both between people in-store and between the shopper and their wider social networks.
Branded social experiences, on or offline, can create easily shareable content for consumers beyond the simple screenshot or copy-pasted link.
The opportunity for retailers is in harnessing the power of mobiles in-store, to keep connected shoppers informed and entertained within their brand ecosystem.
In Australia, 43% of shoppers would like to use their mobiles to interact with products on shelf, and 20% of millennials say they would go out of their way to visit a store that offered a service which enabled them to scan products with their mobile for more information.
Connected shopping should be at the heart of brands’ strategies to drive shoppers back into their stores, as our study shows that when brands embrace technologies both in-store and online, they can further strengthen and deepen their connections with consumers.
4. Secondhand is first choice, so own your resale channel
Consumer demand for a more sustainable, circular retail economy is growing. 43% of millennials and 36% of Gen Z in Australia are worried about the environmental impact of shopping online, and resale platforms provide an alternative channel with lower environmental impact.
Over four in 10 Australian consumers have already purchased items through a resale platform. Aside from cars, the sector most Australian shoppers regularly look for secondhand options in is clothing, followed by technology.
A key proposition of resale platforms is their ability to support and empower SMEs and individual sellers. More than half of Australian consumers say they have supported local business more since the start of the pandemic and as we enter more uncertain economic times in the immediate post COVID-19 landscape, this interest is growing.
Retailers should explore the opportunities of resale platforms, with propositions supporting local and small businesses providing a strong USP.
Many retailers have entered the resale space with their own branded offering. Levi’s, Nordstrom, H&M group and IKEA are just some of the major global retailers that now offer buy-back and sell-on schemes, often as a way to contribute to their CSR goals rather than directly for profit.
Locally, fashion brand Spell has launched a rental platform giving shoppers the choice to buy or rent styles, joining the circular fashion economy.
Source: Foresight Factory/Future of Shopping report
There’s no doubt it’s been a tumultuous year for Australian retail. As we look to the future, consumers are demanding a mixed retail experience with all the benefits of online and in-store shopping.
Retailers who meet consumer demands and offer convenience, social interaction, product proximity and personalised shopping experiences, will continue to see growth — especially with young shoppers.
