2020 was one of the most challenging years for the retail sector in recent history, it was a roller coaster ride that required retailers to quickly adapt to significant and unexpected change.
In December 2020, the Christmas trade period took on even greater importance to retailers who were looking make up for the shortfall experienced due to the impact of the COVID-19 pandemic.
Despite all the challenges and disruptions, Retail Express December 2020 retailer sales data aggregated from over 5000 Australian and New Zealand clients across a range of sectors indicates a positive outlook for the year ahead.
Strong December year on year sales growth.
Every sector saw growth in the December 2020 period versus the same period in 2019, demonstrating Australian and NZ consumers propensity to spend – a strong indicator for consumer sentiment. The growth in sales also helped backfill some of the losses experienced by retailers during the disruption caused by COVID-19 closures.
The big winners were Outdoors & Sporting Goods retailers (up 31%), Furniture & Homewares (up 29%), Electronics (up 17%) and Toys Hobbies & Gifts (up 27%).
Fashion and Footwear saw the lowest growth (up 7% and 3%) but still outperformed December 2019 numbers.
A catalyst for retail transformation
In addition to the unprecedented volatility in 2020, consumer behaviours and buying trends accelerated faster than anticipated.
With Australia spending much of 2020 at home, it’s hardly surprising that online shopping hit new highs. During lockdown, Australians embraced it like never before, with the equivalent of years of digital transformation packed into just a few short months.
Australia Post recorded its biggest month ever in its 211 year history, with more than 52 million parcels delivered during December 2020 - an almost 20 per cent increase on the previous year.
There was also profound growth in omni-channel purchasing behaviour and fulfilment strategies. Demand for Click & Collect skyrocketed with purchases growing 208% versus 2019. Many retailers also began to use their stores as fulfilment centres for online orders – particularly during lockdown periods where stock would otherwise be unable to be sold to in-store visitors. Managed with the right processes and systems, Ship From Store enables retailers to improve the speed of home delivery due to proximity to the customer (rather than fulfilling from a central warehouse that may be based in another state).
Shoppers are now more than ever expecting to seamlessly combine digital and in-store experiences to get the products they want immediately and conveniently. We’ve seen a major acceleration in how retailers have embraced digital and omni-channel capabilities to meet these rising consumer expectations.
As with any time of disruption, where there are challenges, there’s are also opportunities. The reset is a chance for retailers to reassess their strategies and reinvent themselves. Many were forced to adapt, pivot and innovate in 2020 and this will continue into 2021.
The retailers that managed to navigate the 2020 roller coaster and continue to grow are amongst the most agile business operators. They have consistently demonstrated through this pandemic that they can rapidly adapt their business models to changes in the external environment. They have invested in the right technology stack and business processes to enable these capabilities. By utilising integrated omni-channel software systems they can switch different retail practices on and off based on what is happening out in the market. The retailers who were stuck on outdated legacy systems were the businesses that suffered due to an inability to quickly pivot.
As we plan for 2021, the economic recovery will be supported by Australia and New Zealand’s track record in managing and containing COVID-19 during 2020.
Now is the time for retailers to double-down on planning and designing a more robust and flexible operating model including a review of current systems and technology looking for all possible efficiency gains.
Those retailers who have embraced the latest omni-channel capabilities along with lean, agile operating models should be feeling very optimistic for 2021.
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