f52696eca6f4be4698f100371ea01e2863de1346 - Retail foot traffic falls again in January following worst December on record

Retail foot traffic falls again in January following worst December on record

Posted on

“Low wage growth, high personal debt levels and a weakening housing market – particularly in Sydney and Melbourne – have made consumers reluctant to spend on non-essentials,” said Mr Oster.

“Furthermore, consumer preferences continue to trend towards experiences at the expense of traditional consumer goods.”

Online shopping

Retail foot traffic fell 3.8 per cent in calendar 2018 and ANZ general manager for ShopperTrak Adam Ioakim expects a similar decline this year as consumers do more browsing and buying online.

“Consumers are changing – historically you’d have people going into a store to browse before they buy,” Mr Ioakim said.

de4e9d113601b6aa22796fe45f1497ecffaa8ebd - Retail foot traffic falls again in January following worst December on record

Menswear chain Ed Harry collapsed in January and more retailers are expected to go under following an unprecedented drop in foot traffic in December.
 Max Mason-Hubers

“Now a lot of that browsing, that pre-purchasing, is happening online on a mobile device or laptop before they go in stores. So, it’s natural that bricks-and-mortar traffic is down.

“I think there may be some peaks and troughs (this year), there may be some significantly poor months and some significantly good months (traffic rose in February, April and August last year but fell every other month), but overall the long-term trend is for low-single-digit declines in retail traffic.”

The only positive news for retailers is that conversion rates – the proportion of visitors who make a purchase – have been fairly stable and online sales growth is helping to offset declining sales in physical stores.

“Despite not as many visitors instore [retailers] are transacting with the same amount of people – people are well-rehearsed about what they want to buy before they enter a store,” Mr Ioakim said.

The ShopperTrak data has a close correlation with discretionary spending but the company does not count traffic in supermarkets and food stores or shopping malls, so it excludes food and grocery sales. ShopperTrak has traffic-counting cameras in about 3000 discretionary retail stores including apparel, cosmetics, jewellery, toys and hardware.

Tough time for retailers

Mr Ioakim said the “horrendous” double-digit declines in December had prompted retailers to review rosters, ranging, marketing, discounting and in-store experience.

For example, sports apparel chain JD Sports and sneaker chain Platypus are using disc jockeys to give customers new reasons to shop in-store.

“We’re having a lot of conversations with our retail customers around is this the new normal … and what can we do about that,” he said.

“The retailers that are using the data to drive change are the ones that will succeed.”

Several retail chains have collapsed in the past six months, including Ed Harry, Roger David and Laura Ashley, and Crabtree & Evelyn is closing its 12 Australian stores. Others, including Kmart, Kathmandu and PAS Group, have issued profit warnings or downgraded forecasts after weak Christmas sales while David Jones revealed that sales tanked in the lead-up to Christmas.

Mr Ioakim said the fall in retail foot traffic was not necessarily leading to cheaper rents for retailers in shopping malls, as shopping centres claim to be attracting more traffic by adding coffee shops, cafes, high-end restaurants and even cinemas.

“People are more inclined to head to a centre for an experience rather than make a purchase,” he said.

“In the minds of the landlord, they are doing a great job because they’re bringing traffic to the centre, whether or not it’s being correlated to discretionary spend.”

Overdose Digital managing director Robert Cain believes more retailers are likely to go under following the poor December foot-traffic figures, but the shift to online shopping should not be blamed.

“December has always been your make-or-break month,” said Mr Cain, a former David Jones, Katies and Woolworths executive who now helps retailers improve their e-commerce capabilities.

“It’s the [month] that will kill you – if you’re going to die as a brand that’s the one – and I think there will be some deaths out of December.

“But I don’t think that’s because of online. It’s because they haven’t engaged their customer,” he said, pointing to the fact that online accounts for only 7 per cent of retail spending.

Retailers needed to use their online sites to lure customers into stores, he said.

  • Gates Of Vienna

    The following op ed by Hanne Nabintu Herland concerns the Norwegian government's persistent soft spot for the Palestinians. It was originally published in .

  • Labelscar The Retail History Bloggrand Avenue Mall

    Located in the middle of downtown Milwaukee, the Grand Avenue Mall opened in August 1982. Part of a larger civic revitalization effort, the mall premiered downtown .

  • The Malls Of Downtown Chicago Illinois Labelscar The

    We thought we'd switch it up a bit with the mall postings and fire off a whole bunch of them at once, in an urban setting downtown Chicago. The following six malls .

  • 2008 2011 Icelandic Financial Crisis Wikipedia

    The Icelandic kr 243 na had declined more than 35 against the euro from January to September 2008. Inflation of consumer prices was running at 14 , and Iceland's .

  • Stock Exchange News Nasdaq Com

    Join the Nasdaq Community today and get free, instant access to portfolios, stock ratings, real time alerts, and more!.

  • Sprawl Repair

    Fountains on Clematis Street, West Palm Beach, Florida. Developers have identified a desire by suburbanites for 'experiences' that provide them with activities .

  • Trump Tower Wikipedia

    Trump Tower is a 58 story, 664 foot tall 202 m mixed use skyscraper at 721 725 Fifth Avenue, between 56th and 57th Streets, in Midtown Manhattan, New York City..

  • Foot Locker Inc Fl Q4 2017 Earnings Conference Call

    04 03 2018 0183 32 FL earnings call for the period ending January 31, 2018..

  • Informationweek Serving The Information Needs Of The

    InformationWeek.com News analysis and commentary on information technology trends, including cloud computing, DevOps, data analytics, IT leadership, cybersecurity .

Thanks for Reading Retail foot traffic falls again in January following worst December on record
Source link

Back to Homepage