Give us cause to shop till we drop

Tasmanians’ online shopping has shot up faster than other states, but we still prefer to head to the shops, where service can vary dramatically, writes Louise Grimmer

FOR seven years I have been researching the retail sector, focusing on small, independent retailers, shopping precincts, and impact of the growth of online shopping on local stores. There is no doubt this is a challenging time for the retail industry, here in Tasmania and more broadly around the rest of the country and internationally.

The Australian retail sector is facing significant challenges and there have been highprofile closures over the past 18 months. Several factors have contributed to an uncertain trading landscape, including a flat economy, low levels of discretionary household spending, the hollowing-out of the middle class and unresponsive retail formats. These factors have coalesced into a perfect storm for some sectors in the Australian retail industry.

Add into the mix the fact that consumers have changed the way they shop. The number of people shopping online is increasing and some retailers are yet to acknowledge or address this change. Small retailers in particular are struggling to adapt to the online retail landscape, and many have still not developed an e-commerce offering.

So, are we all shopping online now? Well, yes and no. It’s complicated.

In 2017-2018, online purchases grew in every state and territory. Online sales in Tasmania account for 2.5 per cent of total online sales but the state recorded growth of about 4 per cent above the national average. Tasmania recorded the highest increase in online shopping growth in 2018. Out of total retail spending, online shopping accounts for 9-10 per cent, but this is growing. What does this mean for traditional bricks and mortar stores?

Retail researchers confirm consumers are looking for multiple ways to shop — instore, online, via mobiles and shopping apps. Yes, we are still shopping in physical stores, but we want the convenience of being able to choose how and when we shop. About 90 per cent of us want to shop in stores, so it is up to retailers to remain relevant and to step up with their products and customer service. Those retailers adapting their business models to include online shopping options in addition to physical stores will be the ones that survive the “retail apocalypse” reported so often in the media. We know that consumers increasingly research products, brands and retailers online before they venture in-store, so retailers need to be where their customers are, and this is on smartphones.

What is the future for bricks and mortar retailing, particularly in cities and suburban centres? It is necessary to understand the function of retail within a city. There is increasing recognition, particularly from research in the United Kingdom, that in the future retailing may not be the main drawcard for city visitation. While still vitally important, retail will increasingly sit alongside services, attractions and experiences as the major factors in attracting visitation to a shopping precinct.

Findings from research studies I have done recently show the main factors that attract people to visit and shop in cities is the variety and type of stores, as well as the services on offer. High levels of customer service, dining and coffee options are also significant factors.

The importance of a city being able to offer visitors an experience in addition to retail and shopping has been strongly reported.

The most cited barrier to shopping in cities is lack of accessible and affordable parking. Parking is a hot topic of conversation among traders in any retail precinct and will continue to be a so-called wicked problem as increasingly cities around the world work to reduce the number of cars in city centres.

Retailers concerned about parking on visitation to their stores are missing the broader picture — the days of free and abundant parking, especially in Hobart city centre, are long gone. Stores need to move away from the parking argument and provide compelling reasons to bring customers in-store.

The highest quality and level of customer service must be a priority for all businesses, as well as striving to encourage repeat business and positive word of mouth from customers. On a recent shopping visit in town I experienced varying levels of customer service, ranging

The days of free and abundant parking are long gone. Stores need to move away from the parking argument and provide reasons to bring in customers

from barely being tolerated in one eatery to experiencing delightful service in an independent gift store.

Finally, it would be beneficial for traders to work with other complementary businesses in the city to engage in collaborative marketing and draw visitation to an entire precinct rather than just individual stores.

Hobart City Council should be applauded for its role in supporting city traders and in promoting the unique nature of the city centre, the mix of stores and services, shopping arcades and laneways, eateries and those all-important experiences. HCC marketers have sought to support businesses through grants programs, the Hello Hobart marketing initiative and by fostering broader collaborative marketing.

These initiatives are vital as retailers everywhere respond and adapt to the disruption of online retailers, national chains and the entry of international stores. The retail sector is facing unprecedented technological change, and the digital economy is rapidly transforming traditional modes of shopping.

Consumers are busier than ever, they are much more tech-savvy and they want to be able to connect with retailers via multiple channels (in-store, online, on smartphones and apps). Consumer expectations of retailers are shifting and retailers must be agile in responding to an everevolving landscape. Dr Louise Grimmer is a retail researcher in the Tasmanian School of Business and Economics at the University of Tasmania.