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Retail Review 2021
BACK IN
BUSINESS
10 Steps To
Supercharged
Sales
WingArc Australia 360 Collins Street Melbourne Victoria, 3000 Australia +61 3 9615 5200 2 | wingarc.com.au
FOREWORD
2020 was a year quite informed strategic decisions
unlike any that most about the future. With so
of us have experienced. much change, many of
As thoughts turn to the the old rules will no longer
future, what does 2021, apply.
and the rest of the decade
to come, hold for the retail At WingArc, we’ve spent the last
industry? three decades building tools that
help to explore, analyse, and share
Even before COVID-19, bricks and mortar data. Our Retail Analytics platform helps
retail was facing significant challenges, with retailers to collect and analyse data on their in-
a growing list of retail casualties hitting the store operations.
headlines. Then, during lockdown, Australians
embraced online shopping like never before, with
It leverages the untapped resource that is your
the equivalent of years of digital transformation
security camera footage (through video analytics),
packed into just a few short months.
as well as other data sources like your Point
of Sale system, to build a complete picture of
While there are undoubtedly challenges ahead, the customer behaviour within your store.
signs from the 2020 holiday period are promising,
with Australians (and in particular Melburnians
emerging from their long lockdown) showing a That means you can see high and low traffic areas
huge appetite to return to the store. of the store, understand how well you capture
passing foot traffic, and how well you convert
entrants to sales.
As with any time of disruption, where there are
challenges, there’s also opportunity. The reset is a
chance for businesses to reassess their strategies We’re very pleased to present this report on the
and reinvent themselves. Many were forced to state of retail in 2021 and the challenges—and
adapt, pivot and innovate in 2020, and this will opportunities—that lie ahead.
continue into 2021.
We hope you find it useful.
It’s clear that accurate and timely data will
be vitally important for any business to make Steve Hulse is CEO of WingArc Australia
wingarc.com.au | 3
RETAIL
As Australia looks set to
emerge from the pandemic,
what does the data from a year
in lockdown and a holiday
shopping period like no other
DATA
have to tell us? And what can
we expect from 2021?
With Australia spending much
of 2020 at home, it’s hardly
surprising that online retail
sales hit new highs. According
to Australia Post’s November
2020 Online Shopping Update,
INSIGHTS
over a million new households
shopped online for the first time
between March and October.
That’s a year on year increase of
28.5%.
4 | wingarc.com.au
RETAIL DATA INSIGHTS
DISCRETIONARY SPENDING IN 2020
130
From July onwards, Victoria 120
had the highest share of online
purchases, which is equally 110
unsurprising, given that the
100
state was forced to lock down
again to see off its second wave 90
of COVID, with all physical
stores closed except for essential 80
retail.
70
As the Victorian lockdown began
60
to lift, however, the proportion National Victorian
Lockdown Restrictions
of online sales in the state 50
dropped, suggesting a strong 09 Feb 15 Mar 19 Apr 24 May 28 Jun 02 Aug 06 Sep 11 Oct 15 Nov
appetite amongst Victorians
to return to bricks and mortar
100 = normal weekly base. Source: illion
retail into the holiday period and
beyond.
As the pandemic situation trough through the first
improved, however, Australia’s lockdown, coming into the busy
SYDNEY higher income earners seem to
have found themselves cashed
holiday period, discretionary
spending seemed to be almost
LEADS, VIC up and eager to spend, perhaps
due to having forgone overseas
back to, or even slightly above,
normal levels.
CATCHING
trips, domestic travel and other
entertaining expenses through So what does this mean for
the year. 2021?
Data released by credit reference Victoria’s recovery has been Clearly there are positive signs
agency illion in December slower, due to its extended in the latest data. Good news in
2020 showed a strong rebound lockdown, but signs of increased the form of fewer restrictions,
in consumer spending in the discretionary spending are the opening of state borders, as
second half of the year, led in starting to show up there too. well as a number of successful
particular by affluent suburbs, vaccines finishing late stage
such as Sydney’s Mosman. In the City of Yarra, for example, trials and achieving emergency
which is home to much of authorisation around the
This is a big change from the Melbourne’s hospitality industry world, has boosted consumer
first half of the pandemic, when in suburbs like Fitzroy and confidence and seen Australians
wealthier areas had shown clear Collingwood, spending recovered more at ease with spending
evidence of belt tightening, and from 77% below normal in as they head into the crucial
it was lower income households, April to 4% above normal by holiday period.
buoyed by government stimulus November.
payments, who kept the 2021 looks set to be a big year
economy ticking over. Nationwide, despite a clear for Australian retailers.
wingarc.com.au | 5
THE DATA
With so many changes
happening in the retail space
in such a short period of time,
one thing seems clear: the
traditional rules no longer
DECADE
apply.
Particularly in the bricks and
mortar space, basing your
strategy for the future on what
6 | wingarc.com.au
THE DATA DECADE
Customers would buy a whole lot of
things like going to a supermarket, and
then go home, because they didn’t want
to come too regularly back into the CBD.
James Poppleton, MUJI Australia
you did last year, or what has a leisure activity. analytics platforms that deliver
worked even further back in a full view of customer activity.
the past, is no longer going As MUJI Australia’s General
to cut it. Luckily, technology Manager James Poppleton puts Some of these new systems
advances, and the customer data it: “what we were able to gauge use wifi or Bluetooth to detect
insights that those innovations was that customers were coming mobile phone activity as a proxy
are bringing to the table, are in, they’d shop a whole lot, for customer movement. Others,
here to help you make informed they’d buy a whole lot of things like WingArc Retail Analytics,
strategic decisions. like going to a supermarket,
use the feed from the store’s
and then go home, because
security video system and
When physical stores reopened they didn’t want to come too
machine learning technology
around Australia in the middle regularly back into the CBD”.
to capture and track customer
of 2020 after the first lockdown,
our customers who are using movement around the store,
While average transaction sizes
WingArc Retail Analytics in have since moved back to a more modelling the output through
their stores noticed something “normal” level, this is just one interactive heat maps, charts
unusual in their data. While example of how important it and detailed reports.
foot traffic was still lower than is to have timely data at your
usual for the time of year, sales fingertips to understand what These new technologies
numbers were almost back to is happening in-store right promise to open up the kind of
normal levels. When they looked now as new trends emerge. metrics that were previously
further at the data, they saw With accurate and up to date only available for online retail
that the average basket size information at your disposal, to the bricks and mortar
for each transaction had grown you can make better decisions sector. That means analysis
significantly. based on a more rounded such as customer dwell times,
understanding of the customer
demographics, and the ability
It seems that even with journey.
to map a customer’s journey
Australia’s relative success in
around the store and see which
containing COVID-19, customers The technology available for
zones are more or less popular.
were still cautious about capturing data in-store is
returning to stores in the midst constantly evolving. Basic
of a global pandemic. Rather systems that provide a simple All of which means that data
than heading out just to browse, count of entrants and leavers is going to be increasingly
they went back into stores to have been available for many important for all retailers over
get everything they needed in years, but these are rapidly the coming years. How does
the one trip. Very much in “buy being supplanted by more your in-store data strategy
mode”, rather than shopping as comprehensive in-store shape up?
wingarc.com.au | 7
10
STEPS
SUPERCHARGED
Wherever you are in your post-lockdown
journey, it’s fair to say that nothing will be
quite the same for some time to come. With the
rulebook well and truly out of the window, if you
haven’t already done so, now is the time to re-
evaluate your plans and reassess those KPIs.
Here we present our top tips to help you plan
and execute an effective strategy for future
SALES SUCCESS success.
8 | wingarc.com.auTHE DATA DECADE
TAKE A 360 VIEW • Which are our least profitable stores?
• Do any of them share traits with our most
profitable stores and therefore might be worth
The first step to building a successful strategy is more focus to improve results?
to understand your current situation. That means
you need visibility across all aspects of your • Are there product lines that are over or under
operations. performing within or across categories?
Take a 360 degree snapshot of the business by • What traits do they share?
collecting as much data as possible, including • Which product lines do we need to focus on to
individual store performance, sales by product improve performance?
line and across all your sales channels.
Of course, your review is only as good as the data
Then assess where your strengths and weaknesses that drives it, so if you don’t have access to timely
lie by asking questions like: reports and data across your entire business,
• Which stores are our most profitable? Do they then you need to urgently look at implementing
share common characteristics such as the type a unified analytics platform that can deliver
of location, local demographics, and so on? accurate and detailed data so you can make
informed strategic decisions.
1
wingarc.com.au | 910 STEPS FOR SUCCESS
2
DO YOUR
RESEARCH
With so much change happening in such a
short space of time, it’s likely that your current
customer data no longer reflects the reality on the
ground.
Tap into Now is the time to start re-running your
your existing customer surveys, and pulling together whatever
customer base, data you have, to get the best understanding of
your customers that you can.
particularly
those who have
Tap into your existing customer base, particularly
those who remained loyal during 2020, to
remained loyal understand their sentiments around returning
to stores, and to gauge the types of services they
during 2020. want from your stores into the future.
10 | wingarc.com.au10 STEPS FOR SUCCESS
REVIEW YOUR
MARKETING
While many restrictions have relaxed across
Australia, we’re likely to be living with the new
If your customers COVID normal for some time to come. Now is the
time to take a good look at all your marketing
are being asked to assets and immediately retire anything that
socially distance, doesn’t match up with the current guidance.
then it’s important If your customers are being asked to socially
this is reflected in distance, then it’s important that this is reflected
in your marketing messaging and imagery. That
your marketing doesn’t necessarily mean you have to show mask
messaging and wearing and hand washing, but at least make sure
that any models in your imagery are observing
imagery. safe practices. Handshakes and hugs are off the
menu, for now.
3
wingarc.com.au | 1110 STEPS FOR SUCCESS
PLAN WEEKLY
REVIEWS
With so much ongoing change, your strategy can’t
be set in stone. You need to review performance
data at least monthly, and ideally on a weekly
basis.
Again, this is where you need a flexible analytics
platform that gives you timely reporting and up-
to-the-minute data to drive your decisions.
For example, one trend we saw in early data
4
after the initial lockdowns, both here in Australia
and around the world, was a flattening of the
traditional sales pattern, with the typical weekend
peaks reduced and greater activity during
weekdays.
REVIEW AND
The reasons for this are obvious, with large
numbers of people working from home and
therefore able to shop more flexibly, as well as
REFRESH KPIS people’s desire to avoid crowds during what are
perceived to be the busier times.
With so much uncertainty and change, any As workers have returned to the office and
existing KPIs will need to be fully updated, so it’s become more comfortable venturing out to the
important to update your forecasts based on the shops, these trends have reverted somewhat back
best available data, set out what success looks to the traditional patterns, but it’s very important
like for your business following this period of that you review your footfall and sales data on
unprecedented uncertainty, and continue to adapt a regular basis so you can plan your rostering
and adjust those forecasts as the situation evolves. accordingly to meet demand and respond as
A “like for like” comparison against previous patterns change.
years, or a “set and forget” approach aren’t going
to cut it.
5
Your traditional forecast models may very well no
longer apply, and you’ll probably need to realign
your reporting to reflect the metrics that you
determine are important. A flexible data analytics
and reporting platform is going to be critical to
achieving this.
A one size fits all approach also isn’t going to
work, given the ongoing risk of further outbreaks
and localised lockdowns and restrictions through
2021.
Where possible, adjust your approach, reporting,
and associated KPIs for each store or region in
your network, based on the situation on the
ground at each location.
12 | wingarc.com.au10 STEPS FOR SUCCESS
6
EMPOWER YOUR home or later store pickup.
TEAM Empower your frontline in-store team with access
to the necessary tools and systems to see real-
time stock availability across your stores and
channels and help customers order the item they
With consumers embracing online retail during need.
lockdown, their expectations for the in-store
experience have changed.
As well as just being all round good service,
giving your team the tools to help means less
For example, if what they are looking for is out of chance of a lost sale altogether, while also
stock in-store, customers expect your team to be providing opportunities for cross- and up-
able to assist with locating those items, whether selling to an engaged consumer, as they can
that be through your other local stores or by promote complimentary products as part of that
completing an online order for delivery to their personalised experience.
wingarc.com.au | 1310 STEPS FOR SUCCESS
7
SEEK OUT information in your marketing materials and in-
store signage about the origin of products and the
SUSTAINABLE conditions in which they were manufactured, as
well as promoting locally produced items where
SOLUTIONS
feasible.
Or it could mean getting involved with recycling
initiatives where customers can bring their old
Consumers are increasingly ranking sustainability
items into the store for collection and responsible
as a high priority. While this commitment
sometimes takes a back seat to price in the minds disposal.
of the Australian consumer, it’s important for
retailers to both do the right thing and be seen to Another area to investigate is product packaging:
be doing the right thing. consumers are increasingly rejecting single use
plastic and overly bulky packaging. Investigate
That might mean empowering consumers to where you can reduce and remove these items
make good choices, by providing them with more from your supply chain and product range.
14 | wingarc.com.au10 STEPS FOR SUCCESS
PLAN IN-STORE
EXCLUSIVES
Encourage shoppers who may have tried online
to return to the physical store by running
promotions that are only available in-store, such
as additional discounts or promotional gifts.
8 In particular, target customers who have used
your online sales with special offers to draw them
back into your physical stores.
REASSESS RANGES
The disruption of 2020 is a good opportunity to
9
take a critical look at your product lines, and
reassess your strengths and weaknesses.
Some changes in consumer behaviour during
the pandemic look set to be short-lived, such as
increased sales for comfy casual wear for home
workers, but other changes may be here for the
long term.
Now is the time to take a good look at your sales
data and retire those underperforming lines.
wingarc.com.au | 1510 STEPS FOR SUCCESS
EMBRACE THE Bricks and mortar retailers clearly have work to
do to attract those shoppers back into the store.
OMNICHANNEL
Now is a good time to assess how well your online
and offline channels are integrated.
EXPERIENCE Consumers don’t differentiate, and will
increasingly expect a seamless experience, such as
being able to start the purchase journey through
While the concept of omnichannel retailing is one channel and complete through the other. That
nothing new, the rapid change in consumer might be via click and collect, or by being able to
behaviour during the pandemic has made it more easily place an online order while in-store for an
important than ever. During lockdown Australian out of stock item.
consumers embraced online like never before, and
not just for categories that traditionally perform This is also the time to re-evaluate the role of
well, but also for those that have historically seen your stores. If it’s going to remain relevant, the
higher sales in-store. store of the future needs to deliver an experience
or destination in itself that offers a compelling
A wealth of data shows that demographics who point of differentiation, through experiential
would never previously have shopped online have marketing and immersive brand experiences that
tried it for the first time. cannot be replicated online.
10
16 | wingarc.com.auWhen global retail brand MUJI wanted to
understand customer behaviour inside its bricks
and mortar retail stores, it turned to WingArc
Australia.
MUJI was originally founded in Japan in 1980 as a
private label brand offering simple, low-cost but
good quality products.
Today it has 975 stores around the world, and
carries more than 7,000 items ranging from
DATA
clothing and household goods to food and even
houses.
Its Australian operations began in Melbourne in
2013, and it now boasts 5 stores across Melbourne,
CASE
Sydney and Canberra, with plans for more over
the next few years.
While sales in Australia have been growing
rapidly, the MUJI management team knew that
STUDY
understanding their customers would be key
to maintaining that growth trajectory. With no
established data platform in place, the team
looked at deploying an analytics solution.
wingarc.com.au | 17CASE STUDY
The team knew that by understanding shopper the checkouts, and how well they are capturing
behaviour, they would be able to plan and execute passing foot traffic.
on their marketing objectives.
The core of the WingArc solution is its video
“We wanted to make strategic decisions based on analytics capability. This leverages existing
data,” said Takeshi Fujimoto, Managing Director security camera infrastructure to build up a data-
of MUJI Australia. backed view of customer activity anywhere that
security cameras are located, both inside and
“We knew that outside the store.
implementing in-store
analytics would give us The platform automatically
the insight we needed to analyses the footage to
optimise our store layout monitor in-store traffic,
and marketing activities as well as calculating the
to meet the needs of the capture rate by comparing
Australian consumer.” foot traffic passing outside
The data we get from the store with people
coming in.
In selecting a software
provider, MUJI was the WingArc solution
looking for an organisation
with a strong commitment
enables us to make To provide additional
context, the system
to retail analytics and a quick decisions based connects to the retailer’s
proven track record.
on a really clear view Point of Sale system, and
uses this data to calculate
WingArc’s experience of what’s happening the conversion rate,
average transaction value
working with retail
business intelligence on the ground across and total sales.
solutions for leading our store network.
global organisations, as With daily reports
well as its commitment to automatically emailed to
local Australian support the relevant stakeholders,
and ongoing development in addition to a set of
of the Retail Analytics comprehensive interactive
solution, saw it selected dashboards, MUJI
to be the foundation of management now
MUJI’s data analytics have visibility on the
strategy. performance of all their stores.
The WingArc Retail Analytics solution is now in “The data we get from the WingArc solution
place across MUJI’s Australian store network. enables us to make quick decisions based on a
The technology gives retailers an unrivalled view really clear view of what’s happening on the
of what is happening inside their stores. That ground across our store network. That means we
means management can see which sections of can assess the success of a marketing campaign
the store are most popular, what’s happening at or a layout change in near real time,” said Mr
18 | wingarc.com.auCASE STUDY
the sales and store visit data the right times.”
Fujimoto. with predictive capability to
present a forward-looking view With WingArc Australia
“Another area where it’s of expected store traffic. continuing to actively develop
been invaluable is our staff new capability to the solution,
rostering.” With staff rosters typically one area of interest is
needing to be created several demographic analysis.
Having the right number of weeks in advance, this allows
staff working at the right times store management to plan future Using Artificial Intelligence,
is essential to ensure a good staffing levels accordingly. WingArc Retail Analytics
experience for the consumer. will soon be able to present
“It’s been a huge time saver for a detailed demographic
With increased competition both our store managers,” said James breakdown of store visitors,
from other stores and online Poppleton, General Manager enabling the retailer to further
retailers, having people available of MUJI Australia’s Business optimise marketing efforts.
to help if needed is a strong Development Division.
point of differentiation for the “This level of detailed customer
bricks and mortar experience. “Something that used to take data promises to be a real
up to 60% of a manger’s time is game changer for us,” said Mr
And of course, avoiding queues now done in a fraction of that, Fujimoto.
at the checkouts reduces the freeing those managers up to
risk of sales being lost to a focus on other activities. And “We’re excited to be working
competitor. it’s directly helping our bottom closely with WingArc Australia
line by having more people on as they bring this capability to
The WingArc solution combines the floor and the checkouts at market.”
wingarc.com.au | 19O R E
-ST
IN S
IC
N A LYT
A
i l D ata
d Reta
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Get Customer Insights
Reduce Costs
We wanted to make
strategic decisions based on
data. The WingArc solution
ticked all the boxes for us. Boost Sales
Takeshi Fujimoto
Managing Director
MUJI Australia wingarc.com.au/retail
20 | wingarc.com.auYou can also read
