Rarely, if ever, has peak season arrived at a better time for Australian retailers, who have spent much of the last 12 months contending with cautious consumer spending and high inflation and interest rates. Peak season and the events that define it - from Black Friday and Cyber Monday, to the Christmas rush and Boxing Day Sales - are a great opportunity for retailers to boost revenue.
However, that doesn’t mean businesses can sit back and watch the customers, sales and dollars roll in. Retailers must understand not only the impact of cost-of-living pressures, but how their customers’ habits, needs and wants are evolving, too. Lightspeed's 2024 Retail Insights and Shopper Sentiment research* set out to understand shopper sentiment, so retailers can drive success, not just during peak season but throughout 2024. Here are some key takeaways for your retail business.
Understand your audience
Whether it’s online, in-store or a combination of both, there are so many ways for shoppers and retailers to discover, transact and build relationships with one another. No two shoppers are the same, but there are common trends or ‘segments’ though. Take age, for example. Gen Y shop online more frequently (27% multiple times a week) than Gen Z (12%), which might be eye-opening for some. Meanwhile, older Aussies, those over 60+, are shopping significantly less online, but far more frequently in-store.
Salary and geography have an impact, too. Lower-income households are shopping less frequently, and the gap is particularly prominent with eCommerce. Just half (48%) of those earning $60,000 or less shop online more than once a month - almost 20% less than the national average (67%). Consumers in regional towns shop at physical stores and online less frequently than their counterparts in capital cities, with 13% of respondents saying they never shop online at all.
Clearly define and segment your core audience, because everything that follows is dictated by knowing who your shoppers are and how to meet their needs. Afterall, Retailer A who sells products targeted at metro millennials should have different strategies to Retailer B, whose target audience might be regional Aussies over a certain age.
Online? In-store? Or omnichannel?
eCommerce surged to record highs during lockdown, as shoppers and retailers continued to engage with one another as highstreets were closed down. Even with ‘normality’ back, online remains an incredibly impactful and important channel - though it hasn’t been the ‘death of the highstreet’ as many in the industry had forecasted. Bricks-and-mortar is as popular as ever according to Lightspeed research, which found that consumers are no longer favouring one or the other, but both.
Lightspeed’s research found that approximately three in four (76%) shop in physical stores at least once a month, almost half (45%) research a product online and purchase in-store while 17% frequently shop in-store and purchase online. It demonstrates clearly the need to adopt an omnichannel commerce strategy - when retailers unify their in-store and online, back-end and front-of-house operations - tapping into both channels is essential.
So don’t think about each channel as a separate entity, but two sides to the same strategy; meeting your customers wherever they are, steering online shoppers in-store, and in-store shoppers online.
From leads to conversions
Successful retailers don’t just get customers through the door, they ensure they leave with products in their hands and smiles on their faces. How, though, can you do that? Loyalty programs are hugely popular, with 39% saying it’s the biggest perk a retailer can offer. Consider how you can use loyalty programs to turn them from one-off shoppers into regulars. Another 42% of shoppers say being able to check in-store stock availability online before visiting is a big deal. So ensure your store can cater to their needs with real-time inventory management and insights.
Another 14% value retailers who offer services such as repairs, alterations, personalisation - a particularly useful insight for clothing and apparel retailers, among others. Meanwhile, 15% appreciate buy-now-pay-later options and 21% are drawn to gift cards. Ultimately, this highlights the need for retailers to think about more than just selling a product, but going above and beyond with their customer experience and tailoring strategies to suit both their customers and their business’ offering.
When you think of retail, you likely conjure images of packed high streets and hands clutching shopping bags. As our research found, the bricks-and-mortar experience is going nowhere. Physical shopping is unique, tactile and meaningful, with over half (56%) of Aussies drawn to physical stores to view products, try them on, tap sample samples and more. A further 46% say they enjoy being able to compare similar products within a tangible retail setting. For you, it’s a great opportunity to upsell, too, and build face-to-face relationships.
Returns are an inevitable part of retail, but if done well can be a great retention strategy. Seamless returns make a positive impression, but underwhelming experiences can leave a bad taste in the mouth. Over half (53%) believe free returns should now be standard practice for in-store shopping. With flexible, customer-friendly returns policies impacting the purchasing decisions of many shoppers today, consider how your business can turn it into an advantage.
Approximately one third (38%) of shoppers believe in-store shopping is more expensive than online. To attract and retain in-store shoppers, retailers should address these concerns with transparent pricing strategies, open communication and, if feasible, price guarantees.
Strong support for local
For all the tactics and strategies available to local retailers, their secret weapon might not be their product, price or location, but something they can harness: Aussies’ support for local businesses. While 34% of respondents said price is a major determining factor in their purchasing decisions, ‘community’ and ‘local’ were also consistent themes and compelling attractions.
Approximately one third (34%) value access to ‘locals’ deals and offers, 25% prioritise unique and locally-made products, and 24% favour businesses with whom they have shared values. So, think about how you can use that to your advantage; whether it’s promoting the local nature of your products, making your missions and values more prominent or something else entirely. As economic pressures linger, that support is both valuable and inspiring.
Peak season is here, and not a moment too soon. However, don’t be complacent; understand your customers and what they need and want from your business, and you’ll be well-positioned for a successful peak season and a springboard into a prosperous 2024.
*Lightspeed’s 2024 Retail Insights and Shopper Sentiment was carried out amongst a nationally representative sample of 804 Australians, seeking to understand their shopping habits and behaviours.