BACK IN BUSINESS - Retail Review 2021

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BACK IN BUSINESS - Retail Review 2021
Retail Review 2021

                      BACK IN
                     BUSINESS
                      10 Steps To
                     Supercharged
                         Sales
BACK IN BUSINESS - Retail Review 2021
WingArc Australia

360 Collins Street
Melbourne
Victoria, 3000
Australia

+61 3 9615 5200

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BACK IN BUSINESS - Retail Review 2021
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

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BACK IN BUSINESS - Retail Review 2021
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%.

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BACK IN BUSINESS - Retail Review 2021
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.

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BACK IN BUSINESS - Retail Review 2021
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

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BACK IN BUSINESS - Retail Review 2021
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?

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BACK IN BUSINESS - Retail Review 2021
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.

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THE 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.

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10 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.

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10 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
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10 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.

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10 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.

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10 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.

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10 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.

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10 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
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When 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.

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CASE 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

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CASE 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.”

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O R E
                                   -ST
                                IN                  S
                                                 IC
                                     N A     LYT
                                   A
                                                  i l D ata
                                           d Reta
                                    l Worl
                                Rea

                                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

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