What the return to in-store shopping looks like

BY Australian Retailers Association
19 June 2020

The relaxing of COVID-19 restrictions quickly saw shopping centres re-open and brick-and-mortar retailers welcome Australians in droves. With consumers racing back to the shops, many are wondering what this means for e-commerce.

From March through to May, e-commerce experienced record revenues, with many retailers and e-commerce businesses more than doubling their revenues compared with the same period last year. So has e-commerce's turn in the spotlight come to an end, or is it still its time to shine?

The details in the data

When COVID took hold in Australia in March, it forced a lot of people online, including those who had previously favoured offline purchases. In fact, data from the ccinsight tool showed that “new customers” accounted for nearly half of online sales. The remainder of sales were made up of second-time buyers (5%), active repeat customers (23%), defecting customers (14%), and inactive customers (8%). Not only were clients dealing with more customers, but also more types of customers—representing a larger addressable market than pre-COVID.

Aside from the momentary (albeit significant) jump in revenues, these new customers represent a huge opportunity for brands. The ability to quickly distinguish new customers from loyal ones allows marketers to target them with campaigns in the right way. With the right technology and strategy in place, nothing is stopping these new shoppers from becoming repeat, or even loyal, customers.

Is the shift to e-commerce a good move?

While it’s obvious the shift to online was beneficial to some, the retail world also experienced mass losses as multiple brands were forced into administration or permanently closed their physical stores. Department store giant David Jones is among the latest casualties. While the spike in online traffic kept the retailer afloat, it’s still been forced to close some of its 48 stores across Australia.

With this in mind, other retailers have de-prioritised their retail strategies in the wake of COVID and pivoted to a digital-first model or pureplay e-commerce. For example, after sustaining multiple store closures over the last 12 months, Bardot has shifted to pureplay e-commerce. What this means for the retailer and how they’ll fare is yet to be determined. However, looking at how online activity skyrocketed in recent months, it’s fair to assume many consumers won’t fumble over the switch from offline to online.

How to avoid a COVID-fling

For some brands, the pandemic saw their most profitable month yet; for others, it was a difficult time that forced the closure of stores and mass redundancies. What’s been common to most businesses in this period is a review of digital strategies. And rightfully so.

With so much new traffic to websites, brands need to consider how to keep these customers from being a COVID-fling. This means assessing how to engage them and convert them into loyal customers in a post-coronavirus retail landscape.

I’m a strong believer that strategy needs to be informed by data. In the next few months, smart businesses will review their data to uncover meaningful insights that will shape their strategy moving forward. Data will also be key to delivering the highly personalised omnichannel (because retail’s not dead yet) experiences that customers deserve.

E-commerce has quickly gained traction and is likely to continue thriving, even as brick-and-mortar retailers re-open their doors. However, the longevity of their success should not be dependent on consumers having anywhere else to go, as was the case in the lockdown.

Instead, it should be the product of personalised, targeted, data-backed campaigns that capitalise on these ‘new customers’, keeping them interested, regardless of a disrupted retail landscape.

Written by By Adam Ioakim, Managing Director, APAC, Emarsys

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ABOUT THE AUTHOR

Australian Retailers Association

Founded in 1903, the Australian Retailers Association (ARA) is Australia’s largest retail association representing Australia’s $320 billion sector, which employs more than 1.3 million people. As the retail industry’s peak representative body, the ARA works to ensure retail success by informing, protecting, advocating, educating, and saving money for its 7,500 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.

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