[adning id=”12070″]

[adning id=”12070″]

Why to expect consumers to make a cautious start to 2023

Grant Thornton’s retail industry group reports predictions of strong consumer spending and a return to stores have come true after the Black Friday weekend, although not to the extent retailers were expecting.

Black Friday sales data shows Australian consumers have spent $4.97b in global sales, well below the forecast $6.2b, representing a 17 per cent increase on last year. Grant Thornton’s retail team noted this change in how consumers are spending shows people are seeking value for money as household discretionary spending becomes tighter.

“We saw shoppers bring forward their Christmas spending to November, leveraging promotional activities. Consumers are making increasingly considered purchase decisions for bargains to save in the long run,” said Tyson Dujela, Retail Industry Group partner.

According to the data, the average cart price increased over Black Friday weekend, rising from $163.28 per transaction in 2021 to $167.99 this year.

This year Grant Thornton noted buying behaviour shifting, with consumers returning to stores, making the most of their shopping experience after lengthy pandemic and lockdown-induced waiting periods, with the data showing a 29 per cent increase to in-store point of sale – or offline, bricks-and-mortar sales – compared to 2021.

SBW24

“This shows consumers still want store experiences as they create an engaging, touch and feel, customer service driven retail experience with the instant gratification of buying products in person,” said Tyson Dujela. “The trend our retail industry group saw of consumers returning to stores isn’t to say that the online experience isn’t just as important. In this era of omnichannel retailing, retailers need to provide a consistent experience across all touchpoints – spanning from online channels to stores.”

Similarly, Salesforce’s Connected Shoppers Report  shows poor customer experiences can be detrimental to businesses, with 80 per cent of shoppers abandoning a retailer after three bad experiences.

Reflecting on 2022 more broadly, this year was not immune to disruption. Retail, like most sectors, was impacted by price inflation, a tight labour market, cost pressures and a reduction in promotional activity.

Grant Thornton’s Retail Industry Group predicts this sentiment may not continue into 2023, as consumers who held record level household balance sheets a year ago are now more cautious with their spending as inflation, rising interest rates and impacts on the cost of living are front of mind, inevitably affecting retailers across all sub-sectors.

“We predict shoppers of high-end retailers may start going to more affordable stores if businesses don’t put measures in place to retain customers. Consumers are projected to reduce discretionary spending, prioritise essential goods and discount options,” continued Tyson Dujela. “To combat impacts of changing spending habits, we encourage retailers to plan inventory carefully and consider how demand will impact your products.”

In addition, shoppers have in recent years become increasingly conscious of making sustainable purchase decisions, considering values and businesses impacts on the planet and communities. However, expected changes to discretionary spending may influence increasingly price-sensitive consumers to prioritise price over responsible purchases, therefore affecting outlet and product choices.

 

Facebook
Twitter
LinkedIn
Email
Print

Leave a Reply

Your email address will not be published. Required fields are marked *

SUBSCRIBE FREE
SME NEWS BRIEFS

Get breaking news delivered
This field is for validation purposes and should be left unchanged.

RECEIVE GOVT GRANT OF $10K to $250K*.

Austrade Approved Business Events
AVAILABLE NOW APPLY BEFORE 30th MARCH 2021 (Condition apply)

  • ABF Events are approved and listed below have been certified by Austrade on the Schedule of Approved Business Events.
  • This allows exhibitors, sponsors, delegates and partners to participate in the Business Events Grant Program. Note event bookings need to be confirmed ASAP to participate in the grant program
  • The program provides 50% rebate (based on a minimum spend of $20k) for approved items including ABF event-media packages, exhibition stands, corporate function tables, delegate registrations.
  • Govt Grant applications are now open until the 30 March. Please contact ABF to discuss how we can assist, we have experts to assist grant applications.
  • Grant funding will cover up to 50% of eligible expenditure incurred in participating at pre-approved business-to-business events as buyers or sellers during the 2021 calendar year.  All grant applications must be submitted for approval via the following link: https://business.gov.au/grants-and-programs/business-events-grants
  • For further information please see this fact sheet.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?