Getting things right in our perfectionistic society is a basic expectation. But getting it right in the retail sector is an increasingly ‘big ask’ where we see customers as savvy and well-researched, where instore shopping competes openly with online shopping and where there is a constant squeeze on discretionary spend as the economy contracts.
Deakin University's Retail Industry Fellow, Steve Ogden-Barnes, calls it Retail's Perfect Storm. As part of DeakinWeek, on 5 August Steve Ogden-Barnes presented to key industry stakeholders on the current climate in retail and the ways in which retailer's can maximise profit levers.
Steve Ogden-Barnes observed that ‘labour remains retail’s second-largest cost after merchandise but remains out of control for most companies’. He also emphasised that the probability of a customer buying is doubled if there is interaction with a staff member.
Reclaiming the four walls and enhancing the customer experience so that it is memorable was another key point that Ogden-Barnes made. In his forthcoming Deakin White Paper, he will further explore what he calls the ‘sensory store’ — where retailers are not just attuned to sight and sound but begin to associate certain aromas and tastes with the instore experience. Ogden-Barnes observed that touch through sampling and accessibility instore needs to be further explored in the Australian marketplace so that customers have a sense of ownership and perceived value in a product. Ogden-Barnes also cautioned against the generic experience that mid-tier retailers offer consumers. In many cases, it is becoming difficult to recognise which store consumers are purchasing from.
On a concluding note, Ogden-Barnes asked us to consider the behavioural differences between men and women in a shopping environment. Further Deakin University research on gender differences highlights sometimes counter-intuitive results including the fact that:
- males may be more receptive to aspirational branding and marketing messaging than females
- males are more likely to try new brands and may be more receptive to brand extensions.
So, there’s a lot to getting it right in Australian retailing. It will be interesting to see how new entrants such as Zara and Aldi, niche sector players such as Kikki-K, and even luxury brands such as Burberry and Ralph Lauren, hold up over the next few years. If we know one thing, it's a more sophisticated world out there and retailers need to cut through the white noise and communicate a clear, distinct message.
Contact Steve Ogden-Barnes email: firstname.lastname@example.org or Kelly Kajewski, Alliance Director email: email@example.com for more information.