Traditional retailers are staying in the game and planning more investment following the full scale entry of Amazon in Australia.
Analysis by the Commonwealth Bank in its Retail Insights Report shows nine in 10 Australian retailers maintaining or increasing the number of bricks and mortar stores in the year ahead.
The research is based on surveys of both retailers and shoppers — key decision makers from 506 small, medium and large Australian retail businesses and 1,531 consumers.
People still prefer in-store shopping to online, with a preference for bricks and mortar most pronounced among Baby Boomers (71%) and pre-boomers (76%).
Consumers also say over the last two years they have increased their visits to shopping centres, especially local shopping centres and stores (both up 16%).
Jerry Macey, National Manager Retail at the Commonwealth Bank, says there is a clear desire among consumers to shop more locally.
“Although online shopping is catching up quickly and runs a close second, there is an opportunity for bricks and mortar retailers to tap into this trend through offering a better customer experience,” he says.
“Those retailers that have implemented initiatives to improve the customer experience are seeing tangible benefits. For example, the majority have seen increased income as a result, and almost one in two are seeing customers visit more regularly and stay in-store longer.”
One in five retailers are expanding the size of their physical stores.
Almost half (47%) of retailers with bricks and mortar outlets reported an increase in foot traffic.
And they believe better product range (44%), enhancing store layout (42%) and lower prices (40%) were the top factors driving shoppers to their stores.
“Shoppers still prefer the in-store experience where they can touch, feel and try products,” says Macey.
“Therefore retailers are planning more stores. However, it’s sector specific. Food and liquor, homewares and hardware are increasing strongly. Clothing and footwear are more muted.”
Gen Y and Gen Z shoppers say they will shop significantly more often at all retail destinations, whereas the Baby Boomers and Pre-Boomers are only expecting to increase the frequency of visits to stores in their local area, as this chart shows: