Economy

Going commando shopping? Why consumers are probably spending more than we think

Kevin Moore /

A couple of reports last week, one the emma Retail Trends and Insights Report, the other the Australian Food and Grocery Council (AFGC) CHEP Retail Index told two different stories of a slow…ish Australian retail sector.

The AFGC CHEP Retail Index showed retail growth slowing from 4% in the March quarter to 3% in the June quarter.

But digging under them I’m not so sure things are actually as gloomy as the headlines appear to show. Here’s the thing. In Australia we’re still spending, in actual dollars over 4% more each year within retail. That’s higher than CPI and our average wage growth. Not a booming sector sure, but certainly nothing to wail about. And within the $24 billion a month retail sector almost everything is cheaper than 12 months ago, even with our falling dollar.

As I write this blog in a coffee shop in Melbourne there is a huge Uniqlo billboard on the side of a sun-washed building, advertising a merino wool sweater for $49.99. The merino wool sweater I am wearing is two years old (don’t judge) and it cost me $150 then. We can pick our way through TVs, cars, clothes and most consumer electronics and see a similar picture. New international high profile retailers, and innovative light-on-their-feet Australian retailers, are all lowering prices and raising volumes.

Gut feel: we’re spending 4 cents more but getting 10 cents more value. The volume of items we’re buying is probably 10% higher too. The range of items being offered online to Australians is higher than it’s ever been, and our accelerated growth of online shopping is evidence of that happiness with more choice and lower prices. Overall sales growth is OK, but the strong sectors are online and omni-channel. Same as the US and UK three years ago.

The emmaTM Retail Trends and Insights report, Having It All, highlights this:

“Our emma research has found that the hyper-connected 25-35 year-old Australian woman, with her love of shopping, the in-store experience and social nature of shopping, is highly receptive to targeted retailer messaging and promotions.”

So that’ll be via mobile social media using big data to help shoppers choose online. It went on to say “younger women are also more frequent shoppers online, with up to 50% of their total fashion spend going to online retailers.” The report’s comparison between online and traditional retail spends by shopper also reinforces that online is still not just about price, but choice and convenience. The report said “The average spend for older women was $180 online and $168 in-store, while younger women spent $118 and $115 respectively.”

And whilst the mix of retailers these female fashion shoppers frequent included the new pure online plays ASOS, The Iconic and Net-A-Porter, it also included good old fashioned Big W. In my humble opinion Big W led the Australian domiciled clothing sector in its price lowering race to offer Australian shoppers the value US and UK retailers were offering their shoppers five years ago.

So not all doom and gloom at all. There was one word of caution in the report though. The emma report talked of “younger women see shopping as a fun, social occasion.” The report called them  “Commando Raiders” who shop more often but in shorter bursts because they usually have young children still at home. It’s cold in Melbourne at this time of the year. My advice is if you’re going to go shopping commando, shop online at home. It’s warmer.

Kevin A Moore is a retail expert and the chairman of Crossmark Asia Pacific Holdings and Mirador Retail Technology. He is also the founder of TheRoadToRetail.

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Kevin Moore

Kevin Moore is a retail expert and the chairman of Crossmark Asia Pacific Holdings and Now Comms Group. He is also an independent director of Australian fintech company InvestSMART.

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