Latest news:

You are currently not logged in

Log in

E-commerce a salve for retailers as foot traffic plummets

Despite a 0.9 per cent increase in cashless retail sales from November to December, NAB has cautioned that ABS data may show a 0.3 per cent drop in retail sales in December, which would be the worst result in a year.

Retailers including David Jones have already hinted at a slow Christmas, and data from ShopperTrak shows foot traffic plummeting in December.

This has been attributed to online sales events like Black Friday, Cyber Monday and Click Frenzy dragging Christmas spending forward and shifting it online. New data from Salesforce suggests 50 per cent of holiday shopping globally was completed by 3 December last year.

But NAB chief economist Alan Oster said that only partly explains the decline.

“While the increasing popularity of the Black Friday and Cyber Monday sales is arguably bringing forward some Christmas spending to November, the ABS print of 0.4 per cent for the month largely reflects a business as usual November. This suggests that the weak December read at least partly reflects underlying weakness in the retail sector,” he said.

Oster added that low wage growth, high personal debt levels and a weakening housing market – particularly in Sydney and Melbourne – have made consumers reluctant to spend on non-essentials. When they do spend, they are more likely to spend on experiences at the expense of traditional consumer goods.

Adam Ioakim, managing director of ShopperTrak in Australia, believes these are long-term trends that will continue in the years ahead.

“We have seen consistent declines in in-store traffic over the past two years,” he told IR.

Foot traffic was down 3.6 per cent from 2016 to 2017, and 4.3 per cent from 2017 to 2018, according to ShopperTrak.

“Looking ahead to 2019, we predict this trend to continue, with low single-digit declines in traffic,” he said.

A slew of retailers including Ed Harry, Crabtree & Evelyn, Laura Ashley and Roger David have permanently closed their doors in recent months, many of them citing slower sales. But this trend does not necessarily need to spell doom and gloom for the retail industry.

According to Salesforce, Australian retailers generated 16 per cent more revenue online during Cyber Week in 2018 and 35 per cent more online in the crucial pre-Christmas week of 11-17 December, compared to 2017. Kogan had its strongest Christmas ever in 2018.

Salesforce also found that, for the first time this year, mobile shopping was the dominant channel during holiday shopping season, with 72 per cent of shoppers using mobile and 60 per cent of online orders completed on mobile during the weeks leading up to Christmas and Boxing Day.

“Greater mobile adoption is the result of consumer preferences and businesses finding the right balance between inspiration and purchase,” James Johnson, Salesforce regional director of retail practice in APJ, said, “using AI and predictive technologies to support their communication on products and offers”.

No Comments | Be the first to comment

Comment Manually

No comments