Retailers around Australia are looking again to a brighter future. With New South Wales-based retailers opening their doors to shoppers and Victorian businesses set to follow, the Australian economy is being prised back open just in time for a busy holiday trading period.
As restrictions ease, and consumers in Australia’s most populous states regain some basic freedoms, the recovery can now get underway. However, while retailers and consumers alike would be eager to put 2021 behind them, the research suggests recent events have yet again reshaped the way people shop and spend.
The new CommBank Consumer Insights research looks at the changes in the behaviours, attitudes, and intentions of more than five and a half thousand Australians over the past six months. It shows that some preferences are now more embedded than they were six months earlier, and others have started to reverse.
What happens from here remains uncertain, but picking up on signals about consumers’ current and future needs can allow retailers to create further momentum or adjust their strategies.
Local economy at the forefront
It wasn’t just pandemic-induced restrictions that influenced the digital shopping activity of Australians. Yes, buying items sight unseen, the use of click-and-collect, and ordering through online meal delivery services have edged up since January 2021, according to the research. However, consumers have also strengthened their support for local online retailers, with ‘shopping local’ the most prolific of the online activities we asked about.
According to the Consumer Insights research, more than one in two Australians (52%) are now purchasing more from Australian-based online retailers. This has increased since the beginning of 2021 and is almost two-and-a-half times higher than those spending more with offshore online retailers (22%).
Our Consumer Insights research from earlier this year showed that this desire to ‘shop local’ also extended to locally sourced products. In January, the majority of consumers in most categories said it had become more important to buy products manufactured in Australia; 78% believe that it is important for brands to support local communities.
Emerging digital payments gaining ground
The use of emerging digital payment options has continued to increase since the pandemic took hold, particularly among online shoppers. Meanwhile, almost 60% of Australians report using less cash, and both debit card and credit card usage has slowed.
While more than two in five Australians have used a mobile payment wallet to purchase goods or services, and 35% have used a buy now, pay later service, this leaps to 58% and 45% respectively for online shoppers.
When it comes to payments, the biggest change in frequency of usage among consumers over the past six months is buy now, pay later. Thirty-five per cent of consumers now use buy now, pay later, with 38% reporting to use this payment method more frequently. This is an increase from 34% reported six months earlier.
Not everyone yearns for a pre-pandemic shopping experience
The research shows that most consumers across categories intend to revert to pre-COVID-19 shopping habits after the pandemic recedes. On closer inspection, these intentions have shifted in the past six months, which may support the likelihood of more persistent preferences.
In the case of books, media, and gaming, 48% of consumers say they are now unlikely to revert to the way they shopped pre-pandemic, up from 44% six months ago. Shoppers in the consumer electronics segment reported a similar sentiment.
In other categories, namely fashion and motor vehicle parts, the opposite is occurring, where more consumers intend to revert to in-store than was the case in January. For fashion, the proportion of consumers that are now likely to revert has climbed to 66% from 61% in the last six months. In motor vehicle parts, the shift is similar, moving to 65% of consumers compared to 59% previously reported.
So, as the Australian economy reopens and with a roadmap set for deeper easing of restrictions in place, uncertainty can start giving way to positivity. If what we saw in late 2020 is anything to go by, the retail sector stands to benefit from pent-up demand and substantial savings balances.
As we look ahead, it’s worth remembering just how much consumer behaviours have changed and the impact that can have on their shopping preferences. Maintaining that deeper understanding just might help businesses move from capturing short-term exuberance to creating longer-term loyalty and momentum.
We’re here to support Australian retailers as they navigate market uncertainty. To read our other retail and consumer insights visit commbank.com.au/consumer-insights or for more information on how we can help you, email insights@cba.com.au
