The ‘Shopper Shutdown’ That’s Crippling Aussie Retail

Lockdowns may have been lifted late last year Down Under, but someone forgot to tell Aussie shoppers. In the wake of Omicron, consumers have been staging their own “shadow lockdown” in early 2022 and that’s affecting retailers – particularly brick and mortar stores.

After a relatively buoyant holiday season (November trade was up 7.3% on October and 5.8% compared to the same month a year ago), ANZ Bank Research tweeted that “spending is now at its worst since Delta lockdowns, and Sydney spending for the week to 5 Jan was at its weakest since Covid began”. There is an air of considerable caution amongst consumers, despite the fact that Australia is one of the most vaccinated countries in the world, with 92.2% of all people over the age of 16 double-jabbed. Aussies are lining up for Covid tests rather than to visit retailers. They are staying home, staying safe and staying out of stores.

When Australians are getting out and about in retail, they are “lingering less” and shopping with “a purpose”, as reported in the Australian Financial Review. The behavior started during the holidays, as local Scentre Group mall boss Peter Allen noted in relation to shoppers – “they…had lists, probably did less browsing and went about their way”.

The situation for physical retail right now has not been helped by huge supply chain problems, compounded by staff shortages. The Guardian says that some companies are reporting that half of their employees are unable to attend work, due to Covid-related issues. Why visit stores when you may be confronted by empty shelves, or a “closed” sign?

The big question is whether, after repeated waves of Covid, the current pattern will become entrenched – spending less overall, spending less time in physical stores. On the expenditure side, Commsec chief economist Craig James told the Sydney Morning Herald that “Aussie consumers are alert, not alarmed”. Retail overall should bounce back strongly post-Omicron.

In terms of how Australians treat physical retail, however, that is changing, and retailers will need to adapt. As has happened the world over, shoppers have become increasingly comfortable with online retail during the pandemic, be it delivery or click and collect.

Brick and mortar retail will need to move one of two ways – either accommodating “mission shopping” by making it as easy as possible for shoppers to get what they want and get in and out of stores fast (including curbside pickup), or by delivering an outstanding and immersive experience that just can’t be replicated online.

In the meantime, let’s hope the “shopper shutdown” is short-term, before it affects retailers in the long-term.