Rainy days and holidays are no longer to blame for empty stores on slow days. Another threat looms nearby, inching closer every year as retailers desperately claw to evade its line of fire. Sadly, major household retailers have already fallen victim in 2020, including Bardot, EB Games, and Jeanswest.
Unfortunately, there’s no sign of change on the horizon for the retail plague. Here’s what you need to know about why Australian brands have disappeared, and the antidote to resuscitate the retail economy.
Can we attribute one factor to the massive implosion of the nation’s retail landscape? More likely, a lethal cocktail of multiple venomous ingredients is to blame. When retailers can’t keep their head above water, they ultimately have two choices:
A plethora of brands have reached the preceding fork in the road, including Ed Harry, Topshop, Avon Australia, Shoes of Prey, and Laura Ashley. And more aren’t far behind.
Yet long before these brands made a defining decision to close or sell, they waded in deep water thanks to the following circumstances.
In the pleasant days of yesteryear when Aussie shelves were stocked with Aussie-made goods, being seasons behind the northern hemisphere was the status-quo. Geography has never helped traders, but at least then, the competition was in our territory and between home teams.
That was until global brands infiltrated the retail market, most significantly impacting fashion brands. As brands like Zara and H&M gained footing, fast fashion meant a nosedive into bankruptcy for many brands. And it’s not just the fashion industry. The entire retail ecosystem is compromised, thanks to this global infiltration.
What started as consumer access to foreign brands mutated into massive changes in how Australians buy goods. Riding piggyback on the damage of global invasion came online access to any item with the click of a mouse.
Welcome to Australia, where everything comes from China, thanks to...
Australian bricks-and-mortar stores aren’t the only brands suffering; online retailers won’t find much shelter from the storm either. In fact, brands are running out of places to turn for sales. Thanks to eBay and Amazon Australia, online shopping totalled A$28.6 billion in 2019. Every year, this number increases along with the percentage of total online shopping.
Australian brands who can’t keep up with the rapidly changing digital shopping trends are on the brink of bankruptcy. The writing’s on the wall: get online, or get out.
Instead of launching digital marketing campaigns and social media outreach efforts like their tech-savvy competition, they sit idle and wait.
Unfortunately, waiting for a storm is the worst way to prepare for it. By the time they wise up, it’s too little, too late. Is an online presence all it takes to survive? It certainly helps, but it’ll take a lot more than an online store to clear the hurdle of crickets chirping in empty stores.
With every product only a click away, what’s to prevent consumers from ordering online? Worse, when they venture to local businesses, they are greeted with slashed prices, mediocre catalogues and overall lacklustre customer service. In an era of innovation, middle-tier retailers are experiencing a sober reality: there’s nothing to distinguish one from the next.
The result? No brand loyalty. If brands aren’t offering what customers want, why should they continue supporting them? There’s a reason for the honoured principle of “customer-first”, and the cutthroat battle for sales means adapting to customer needs.
Bottom line: If Australian brands refuse to accept that customer needs have changed, people will choose another brand that’s more adaptable. Once the customer ventures to the other brand, all bets are off for their return. While the bar raises on expectations, the physical consumer population lowers.
There is a solution: Get on the fast-track to 2020 and anticipate the customer’s need, rather than catching up with it. Zero in on a new angle for the business and offer something truly unique. At the forefront of this renovation? Customer data.
There’s no better way to find out what consumers want than to look at the data. Yet one major theme remains irrefutable: consumers shop differently these days.
Australia ranked as having the highest median wealth per adult in the world in 2018, according to Credit Suisse. Why, then, are people closing their wallets? With minimal growth in salary, more and more shoppers are looking for discounts. In other words, general consumer priority is less about quality and more about finding a bargain deal.
Instead of throwing hard-earned wages at luxury clothing and retail products, people favour discounted items and sales. In turn, middle-market brands suit up for a full-fledged discount bloodbath, slashing prices as much as 70%.
Unfortunately, a diluted “discount sale” marketplace creates a lack of distinguishability from one brand to the next. What else is the indecisive consumer to do but just “order it online”?
And so the cycle continues. Is there any hope to save floundering brands from going under Down Under?
If Australian brands want to reclaim their clientele and succeed, they need to get up to speed with online shopping fast. Some brands — especially those in a highly specialized niche market — might not feel the discomfort of the rapidly changing retail ecosystem. Still, having a niche brand or product isn’t enough to ride this out.
In light of incessant collapse, some Australian brands have excelled through the retail storm with social media marketing campaigns, influencer partnerships and increased online visibility. Brands like Spell Byron Bay and Zimmermann have gained a strong foothold in the global fashion market thanks to outlets like Instagram. However, these brands didn’t rest their laurels on tired and outdated concepts. Instead, outreach included influencer marketing and a hard-hitting social media presence.
The reality is that Australians want to buy products from local businesses, but they aren’t going to buy them if they don’t pop up in their news feed. Is digital presence the key to retail success? Time will tell, but again, if we’ve learned anything from this retail apocalypse, it’s that the waiting game is more like the brand-killing game.
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