IRI: REIMAGINGING RETAIL

Reimagining retail for the roaring twenties

IRI describes the key pandemic behavioural changes and habits that will be developed this year thanks to new-found resilience and renewed values.

After a rollercoaster two years, Australia is reopening to the ‘roaring twenties’ with renewed optimism. We only need to delve into history to see how resilience, technology and innovation can change lives for the better. Coupled with the refocus of what’s important in our work and home lives, Australia will likely see many pandemic behavioural changes and habits stay in complement to new-found resilience and renewed values.

The influence of digital and values

The pandemic-driven digital transformation forced us to reassess how and where we live, as hybrid working went mainstream. One million more Australians are now shopping online and two-thirds of those who did so over the three months to September 2021 (64 percent) chose websites of retailers with physical shops. Meanwhile, more than half of us are willing to pay for shipping (54 percent).

While price and value remain very important as Australians use every channel at their disposal to shop safely, ascertain availability and get the best prices, our values are also influencing shopping behaviours. Two-thirds (66 percent) of us are more willing to pay higher prices to support small business and nearly all of us (93 percent) are more likely to buy Australian-made as provenance continues to fill our shopping baskets.

A fine balance between connecting choice with purchase

For online shoppers, retailers must consider larger and more valuable basket sizes and offer the ability to save a shopping list. While Australians are keen to shop local, understanding new in-store behaviours is critical to long-term success. Elevating the in-store experience is fundamental.

But beware of a digital divide. While recent Google research finds Australian retail “to be steadily advancing towards becoming more digitally resilient”, italso finds that “the market shows a split between those who have embraced digital and are thriving, and those that have not and are struggling” with a quarter (23.3 percent) investing in digitalisation to reduce costs and improve profitability and 17.5 percent wanting to improve customer experience to drive revenue and/ or increase KPI scores.

Also be aware of the impending demise of third-party digital cookies. Put more emphasis on first-party data to learn about your customers. Along with the opt-out of tracking apps, it will be harder than ever to know where Australians are shopping and what they’re interested in. Your data, and knowing how to effectively use it, will be more valuable than ever before.

Perfecting the omni-channel is key

More businesses than ever are investing in improving and augmenting omni-channel efforts because Australians expect retailers to be present everywhere they are. No matter the device, channel, platform, locale and time of day, we command consistent information and experiences and the ability to seamlessly move between channels. Omni-channel will thrive if the logistics and supply chain continue to evolve rapidly to support it.

But remember, bricks-and-mortar remains key to omni-channel success. While the purpose of physical spaces may have shifted, they remain important to the shopper journey, and in many cases, the endpoint of buy-online-pickup in-store sales strategies. 2022 will drive sensorial activation in physical outlets, as Australians are increasingly nuanced in shopping habits.

Lean towards green

From reuse to single use and back again, sustainability is returning to lead Aussie shopper brand preference as we leave pandemic anxiety behind. Three-quarters (72 percent) are willing to pay a price premium for brands with sustainability practices and we expect brands to be transparent and do more about ethical and sustainable sourcing.

As we learn to live with COVID, Australians will support brands with a sustainability mindset, but they are also grappling with new ethical decisions around sustainability trade-offs in a world where convenience and safety rule alongside self-awareness and empowerment. Your sustainability messages therefore must be transparent, clear and concise.

Protecting and nurturing the environment for a better society

One in four online shoppers purchase a brand because of its ethics and sustainability practices – a trend driven by 18-24-year-olds. As such, we are increasingly seeing these brands outperform.

While packaging was much of the focus, shoppers now expect brands to do more about ethical and sustainable sourcing of ingredients. Almost three-quarters appreciate it when brands make it clear what they stand for and stay true to their values and seven in 10 (69 percent) agree that living in more ‘green’ ways can improve their health.

Australian businesses must also be proactive with sustainability innovations. It has profound environmental, social and economic implications and beneficial outcomes for reputation, investor buying and value creation. Higher acceptance and concern can drive deeper engagement. Retailers and manufacturers must address major barriers to democratising sustainability and demonstrating clear value to shoppers.

In 2022, Australians want you to be ‘the retailer for me’

Those businesses that roar to the forefront are those that lean into collaboration –with suppliers, manufacturers, industry, community and the individual shopper. If you put data and insights at the heart of your business, you will hear the roar of Australians as they navigate a bold new world and recalibrate their ways of living.

Constructive disruption must be conducted in harmony and unity. Retailers and suppliers must come together to drive the industry to new levels by creating experiences that excite and engage Australians.

As Kirk Perry, President and CEO at IRIsays: “This next year is going to be about having the best intelligence to understand the changes that are really here to stay and those changes that were just because of the pandemic. Those that get ahead will be the ones that use that data most effectively.”

To learn more about leading and winning in the retail of the roaring twenties, download the complete report at IRIworldwide.com.