RETAIL ADAPTATION How retail adapted during the COVID pandemic
1%
ACRS conducted research to investigate how retail changed and adapted during the COVID-19 pandemic. Throughout September 2021 we surveyed 1,609 shoppers from across Australia, the United Kingdom and the United States of America. This report reflects on shoppers’ experiences throughout the COVID-19 pandemic and identifies key changes in consumers’ behaviour and attitudes towards retail, with a particular focus on Australian shoppers.
n=
1,002 Australian shoppers
301
306
n= United Kingdom shoppers
n= United States shoppers
17% 16%
15%
18% 6% 17% 12%
AGE 18–24 25–34 35–44
5% 15%
45–54
20%
55–64
20%
65+
46%
22%
19%
46%
54%
54%
THE RETAIL INDUSTRY FACED A NUMBER OF CHALLENGES DURING THE PANDEMIC
Short- and longterm snap lockdowns varying across states
Physical compliance for the health and safety of staff and public
Domestic and international supply chain disruption
Quality staff retention and acquisition, as well as training
WITH CONSUMERS SPENDING MORE TIME AT HOME, ECOMMERCE BOOMED DURING THE PANDEMIC Retail spend in 20201
$310.29B Up 9.7% YoY Online goods spend in 20201
$50.46B Up 57% YoY
(Up 23% YoY as at 31 August 20212)
Online share of retail spend in 20201
% 16.3
Sources: 1 Australia Post Inside Australian Online Shopping eCommerce Industry Report (2021); 2 Australia Post Inside Australian Online Shopping eCommerce update (Sept 2021)
MAJORITY OF AUSTRALIANS MADE AN ONLINE PURCHASE IN THE LAST THREE MONTHS, WITH OVER A THIRD MAKING WEEKLY PURCHASES
% 84
Online shoppers who made a purchase at least weekly
% 37
of Australians made an online purchase in the last three months
% 54
Compared to…
% 53
94%
84%
INDEED, HALF OF AUSTRALIANS SHOPPED MORE ONLINE THAN PRIOR TO THE PANDEMIC, WHILE ONLY A SMALL PROPORTION SHOPPED LESS
% 50
of Australians made more online purchases during the pandemic (i.e., since March 2020) compared to prior to the pandemic Compared to…
62%
59%
4%
Only 4% of Australian shoppers made less online purchases during the pandemic
46%
Almost half of Australians made about the same amount of online purchases during the pandemic
CLOTHING, FOOTWEAR & ACCESSORIES AND GROCERY PRODUCTS WERE THE MOST PURCHASED GOODS ONLINE Products purchased online F Clothing, footwear & accessories
56%
Grocery products
41%
F Household
46%
32%
M Consumer electronics
30%
18% 15%
Travel & tourism
12%
M Automotive
12%
8%
23%
11% 20% 25%
22% 23%
AUS Note:
F=Females purchased significantly more than males;
44% 33%
32%
42% 41%
50%
25%
M Media & entertainment
61%
57%
33%
F Personal care
M Sporting goods & equipment
64%
UK
M=Males purchased significantly more than females.
USA
PHYSICAL RETAILER WEBSITES WAS THE MOST FREQUENTLY USED ONLINE CHANNEL TO PURCHASE RETAIL GOODS FROM
% 64
of Australian shoppers purchased online goods from physical retailer websites in the past three months
Channels used for online shopping across categories 62% 48% 47%
65% 60%
50%
64%
50%
44%
33% 31% 19%
Physical retailer websites (e.g., Myer)
Online Online only retailer marketplaces (e.g., websites (e.g., THE eBay) ICONIC)
AUS
Retailer mobile/ tablet apps
21% 19% 11% Social media (e.g., Instagram)
AUSTRALIAN SHOPPERS WERE HIGHLY SATISFIED WITH ONLINE CHANNELS OVERALL AND USED THESE FOR A RANGE OF REASONS Australian shoppers’ primary reason for channel use aside from purchasing & level of satisfaction Physical retailer websites
Online marketplaces
63%
most frequently used for product information
4.2
/5
Online only retailers
42%
most frequently used for price comparisons
4.1
/5
Retailer mobile/tablet apps
40%
most frequently used for price comparisons
4.1
/5
Social media 21%
22%
most frequently used for seeking out promotions
4.2
/5
most frequently used for inspiration for future purchases
4.1
/5
STANDARD DELIVERY WAS BY FAR THE MOST FREQUENTLY USED METHOD TO DELIVER ONLINE PURCHASES Delivery option most frequently selected across categories
% 65
of Australian shoppers most frequently used standard delivery (3+ days) to deliver their online goods
52%
51%
65% 18%
18%
19% 11%
22%
Same day
Express (1-2 days)
12% 8% 13%
12%
AUS
Standard (3+ days)
Click & Collect
SHIPPING RELATED PROMOTIONS WERE AMONGST THE MOST IMPORTANT PROMOTIONS WHEN DECIDING TO MAKE AN ONLINE PURCHASE Incentives/ promotions important to online purchase decision
Free shipping
81%
Price discounts
73%
Free return shipping
67%
Conditional free shipping Promotion codes
54%
Product bundles
45%
Negotiable price
45%
Competitions
30% Very important (4-5)
30% 24% 30% 32%
25% Moderately important (3)
21% 21%
57%
84%
82%
6%
73%
73%
12%
70%
72%
13%
59%
62%
23%
55%
55%
24%
50%
48%
23%
45%
45%
45%
36%
38%
15% 4%
Not at all to a little bit important (1-2)
THE PHYSICAL STORE, AND THE ABILITY TO SEE AND TRIAL PRODUCTS, WAS THE MOST INFLUENTIAL SOURCE FOR PURCHASE DECISIONS OVERALL Most influential sources on purchase decisions overall
1 2nd 3rd
st
Physical store (e.g., ability to see/ trial) 2nd
1st
Retailer websites 1st
3rd
Internet searches 3rd
4th
Promotions
4th
4th
2nd
Family, friends & colleagues
5th
5th
5th
Email marketing
6th
7th
10th
Online reviews & blogs
7th
6th
8th
Television
8th
8th
6th
Mail catalogues
9th
14th
12th
Social media
10th
9th
7th
Online advertising
11th
10th
9th
Direct mail
12th
11th
11th
Print media
13th
12th
13th
Sales person
14th
13th
14th
Cinema
15th
15th
15th
Outdoor advertising
16th
16th
16th
SEEKING SALES/ SPECIAL DEALS AND SHOPPING FOR LOCALLY PRODUCED PRODUCTS WAS IMPORTANT TO AUSTRALIAN SHOPPERS Important to shoppers following their pandemic retail experiences
68%
Seek out sales and/ or special deals 66%
65%
66%
61%
Be frugal with spending 61%
67%
Shop for products that are locally produced 58%
48%
53%
Shop for quality products (versus fast and disposable goods)
62%
65%
Shop for environmentally friendly/ sustainable products 60%
51%
62%
ONLINE BECAME THE MAIN CHANNEL FOR NON-GROCERY RETAIL GOODS DURING THE PANDEMIC AND MANY PLAN TO CONTINUE USING THIS CHANNEL Main channel – NON-GROCERY AUS Prior to COVID-19 pandemic (i.e. before March 2020)
During COVID-19 pandemic (i.e. March 2020 to present)
68%
36%
After COVID-19 pandemic (i.e. in the future when COVID-19 is no longer a health risk)
50%
Overall preferred
50%
USA
UK 27%
56%
5%
8%
38%
41%
13%
9%
Physical stores
45%
21%
46%
72%
29%
34%
Online (home delivery)
60%
59%
10%
7%
11%
7%
Online (click & collect)
58%
38%
45%
42%
33%
53%
41%
49%
9%
10%
14%
10%
PHYSICAL STORES REMAINED THE MAIN CHANNEL FOR GROCERY GOODS IN AUSTRALIA, BUT THERE HAS BEEN A SHIFT IN PREFERENCE TOWARDS ONLINE SINCE THE BEGINNING OF THE PANDEMIC Main channel – GROCERY AUS Prior to COVID-19 pandemic (i.e. before March 2020)
During COVID-19 pandemic (i.e. March 2020 to present)
80%
57%
After COVID-19 pandemic (i.e. in the future when COVID-19 is no longer a health risk)
65%
Overall preferred
66%
USA
UK 16% 5%
34%
22%
24%
9%
64%
43%
13%
51%
10%
52%
Physical stores
Online (home delivery)
33%
51%
39%
43%
3%
6%
73%
50%
19%
35%
8%
15%
10%
59%
27%
14%
5%
57%
32%
11%
Online (click & collect)
LESSONS LEARNED AND PRIORITIES FOR THE FUTURE
Add humanised touches to online channels to show customers you care
Strive for seamless omnichannel experiences to meet increasing online expectations
Invest in the digital shopfront to attract customers and compete for screen time
Reflect and review plans and processes to increase efficiencies in operations
Engage and target locally by connecting with online communities
AUSTRALIAN CONSUMER & RETAIL STUDIES Monash Business School Level 6, Building S 26 Sir John Monash Drive Caulfield East VIC 3145 T: +61 9903 2869 E: acrs@monash.edu W: monash.edu/business/acrs