Retail Australasia Summit and Expo - Our Takeouts

Last week we attended the Retail Australasia Summit and Expo, held in Auckland. The overarching theme was ‘customer centred social retailing', and it largely focused on the future for retail in terms of new technology; what that means for traditional bricks and mortar retailing, and what retailers need to consider to be competitive in this new ‘technological world’.

Local government support for Retail

Auckland Council reiterated their support for the growing the Retail Sector in the Auckland Region, including the City Centre, and talked about making Auckland the world’s most liveable and shoppable city. They intend to do this by:

• supporting the regional Business Associations and Business Improvement Districts, including Heart of the City, to encourage development, investment, activity, the overall look and feel of the respective business areas
• actively involving BIDs and business associations in the Unitary Plan development. The Unitary Plan is the Council’s new ‘district plan’ which sets out the rules for future growth and development in the Auckland Region
• streamlining the consent process to ensure no delays
• and having a stronger input into having good quality design outcomes

Get on board with Technology, but Bricks and Mortar are here to stay
In NZ, 5% of all retail transactions are currently made online, and it is projected to top out at 15% - so Bricks and Mortar retail is here to stay, however one can’t ignore the need to consider how best to integrate new technology into the overall retail mix. Over the course of two days, the overarching theme was the importance for retailers to create an integrated shopping experience for their customers – allowing customers to experience retail brands and purchase goods whenever they want – shifting control into the hands of the consumer.

Source: John Slack-Smith, Chief Operating Officer, Harvey Norman, May 2012

According to Microsoft, 25% of all Bricks and Mortar sales are influenced by retailers' online channel presence. So, if you haven’t already done so, it’s time to start to thinking about your businesses digital presence.

And no matter where and how you are selling your product, what we heard over and over again is that gaining customer loyalty, by providing a consistent offering of quality and service, is key.

Overall, conference participants had a fundamental belief in bricks and mortar retailing. It was emphasised that in order for this to be successful, and remain a point of difference from the online experience, it's necessary to create an entertaining, theatrical experience for your customers. There were many examples of how some of NZ and Australia’s major retailers are finding ways of doing this, from Harvey Norman’s engaging events “Geek Saturday” (nothing to do with selling a product but bringing greater brand awareness to the fore), to Ballantynes in their reopened Christchurch Store focusing on creating Retail Theatre through organised and impromptu events, to loyalty cards etc. There's nothing new here and we can think of many great examples of HOTC retailers striving for excellence and great fantastic customer experiences online and in-store.

The last 12 months, and the future outlook?As any retailer knows, the last 12 months has presented uncertainty and only sporadic growth in some areas. In a panel discussion with the Warehouse, Harvey Norman and Mitre 10, the sense of  uncertainty was reiterated. With only gentle growth projected for the coming 12 months, the main message was to create a business that could cope with change.

Both Westpac and ASB’s chief economists talked about the future for retailing in terms of the economy.  They reiterated that growth in home sales drives retail activity (no surprises) and that the housing market is critical to consumer confidence. Westpac’s Chief Economist, Dominic Stephens is forecasting slightly higher consumer spending over the next few years, but both agreed that we are only looking at “gentle growth”.

They forecasted the NZ Dollar to sit somewhere in the low to mid 70’s against the US, but both indicated that if Greece exited from the EU this would likely result in a much lower figure. With the economy presenting as much as uncertainty as the overall retail market, their recommendation was to try and manage risks in a more flexible way.

NZ consumer confidence is steady, but at the lowest levels in 7 years…

Nielsen Pacific presented a range of research into Consumer Retail Behaviour. Top line results saw NZ Consumer Confidence as steady, but at the lowest levels in 7 years. When interviewed, 50% of NZers expressed that they are not confident about the state of their personal finances, and the majority believe that we won’t be out of the recession in 12 months time. So with a sense that over the next 12 months consumers are buckling down, and with 2 out of 3 people are saying they are looking to cut back to spending, it will continue to be a difficult time for Retail over the coming months.

Michael Walton, Executive Director, Neilson Pacific

But the research also confirms that NZers are comfortable with and, more importantly, like Bricks and Mortar purchasing.

So - absolute key takeout? 
Integrate new technology into your retail business as much as possible,  explore all of the options that are available to you, and bring a little bit of theatre to create a point of difference and fun for your customers in store.