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COVER STORY
The Retail Revolution It will surprise no one to hear that retailers are experiencing challenging times. It’s tough out there; with consumers still wary of spending and focused on saving as the aftershocks of the global financial crisis continue to be felt. Retailers across the board have seen their profits falling, but it’s not all bad news out there for the retail sector. Challenging times always bring opportunities for those bold enough to grasp them. Russell Zimmerman, Executive Director of the Australian Retailers Association (ARA) said that while retailers weren’t counting on a big boost to flagging sales figures this Christmas, there was some good news, with a moderate year on year 2.2 per cent increase in spending being projected from mid-November to 24 December 2011. These projections have not taken into account the November and December interest rate cuts, which may bolster consumer confidence in the lead up to Christmas. “At least we are looking at an increase of around 2.2 per cent on last year across the board,” Russell said. “So that’s the first of the good news, because we’ve seen some pretty difficult figures over the previous four months, with some of those, year on year, have been negative, but overall we’re seeing an increase. “We are actually seeing some interesting increases in particular areas. If we look at things like household products, they are going to up 1.5 per cent over Australia and food is up about 3.4 per cent … ARA predictions indicate apparel and footwear sales could slump down 1.9 per cent lower than last year's festive trading period, department stores are also expected to drop by 1.5 per cent and hospitality by -0.8 per cent – but other retailing is up 4.2 per cent, and that’s the important figure because the other retailing does include the internet.” Russell said the ARA’s figures show that online retailing generates in the order of $36 billion in sales in Australia and makes up approximately 6 per cent of Australia’s total retail industry. “But what you have to look at in that internet retailing figure is that it’s really only about 2 per cent of that figure that’s heading off overseas; so 4 per cent of all retail sales are being made by retailers operating online in Australia. “When I go and talk to retailers like Bras N Things – and yes, it’s a bit interesting that a man is going in to talk to them at Bras N Things – but if I go and talk to retailers like that, they are telling me that their online store is doing as