– Page no.

Retail Revival: A Fresh Perspective

In December 2011, brainmates partnered with Nine Rewards to research current consumer attitudes and spending habits.

The findings have significant implications for Australian retailers in their bid to entice local customers.

2

Challenges for Australian Retailers

Volatility of the global economy. Rise of online retailing. Penetration of smart phones/ m-commerce. Rapidly evolving technology. Strong Australian dollar. Competition from international retailers. Control in the hands of the customer, social media and sharing of experiences.

3

Our Approach

Men (47.7%): Women (52.3%)Aged 18-6483% live in main citiesSalaries from under 30K (13%) to over 100K (36%)Majority earned 50-100K (56%)43% have children 66% married 8% lived with their parents

We surveyed 1073 Nine Rewards customers across Australia and analysed data using a Product Management Framework.

– Page no.

1. Key Findings

The cautious consumer:73% reported to be saving every month.

Does this mean consumers are not spending?No. The Australian consumer is simply more cautious.

The cautious consumer decoded:1. Researches the best price before buying (61%) 2. Plans what they want to buy (46%) 3. Doesn’t buy as much as used to when at the

shops (46%)4. Don’t go to the shops as much (38%). 5. Mostly shops online (14%)

– Page no.

2. Key Findings

Online spending and sentiments: Over 9 million Australians now shop online.

96% have made purchases online in the last 12 months.

What are the main reasons for shopping online?1. It is cheaper. (75% )2. It is more convenient/ “it is delivered to my door”. (74%)3. Compare prices more easily. (67%)

Online by category:Travel is the leading category in Australian online retail ($7.4b); 65% of respondents purchasing travel online. People least likely to buy shoes and groceries online.Purchase of electronics on the rise. (51% of males purchase online)

6

This Means That….

1. Consumers are still spending but taking a more considered approach to purchasing.

2. Consumers are not persuaded to purchase by traditional retailers’ discounts or online deals (Only 36% stated they only buy products on sale – raising doubts about the the widespread discounting strategy retailers have adopted.)

3. Online retailing should not be blamed for the contracting retail revenues. Online retail is still only a fraction (3.7%) of total consumer goods retailing.

4. The online retails industry is fragmented with no single operator (of the 30,000 online retailers) controlling more than 3% of the market.

7

Other Interesting Insights From Our Research

PROBLEM: Customers have little time.

INSIGHTS: 1. Online voted most popular retail channel for shopping

during the weekdays; shopping centres preferred for shopping on weekends.

2. Online purchases mainly made while at work (61%), late at night (71%) and when the kids are asleep. (65%)

SOLUTION: Multi channel shopping.

8

Other Interesting Insights From Our Research

PROBLEM: Customers don’t have identical retail habits.

INSIGHTS:1. Women shop independently; 58% prefer to shop on

own.2. Men shop with their wives; 42% prefer to shop with

their wives.

SOLUTION: Customer research and segmentation.

– Page no.Recommendations

– Page no.

1. Be Customer Centric

1. Insights to be drawn from the users of the products and services themselves – your customers!

2. Get to know your customer’s needs, drivers and pain points through surveys, interviews, observation!

3. Understand and stay focused on your customers and what they value: write user and buyer personas and scenarios.

4. Consider the end-to-end product experience: ensure each element satisfies your customer’s needs and adds value in their eyes.

10

– Page no.

2. Keep an Eye on International Trends

1. Getting Bigger and Going Global Globalisation and consolidation will need to be considered by every local retailer if they want to remain competitive.

2. Building Great Products A significant shift to becoming the ‘development’ of great brands. E.g. Tesco in the UK, and Woolworths in Australia producing private label products.

3. Understanding the individual consumer Ramping up customer relationship management in a push to understand shopper behaviour; multidimensional segmentation and target product selection and range. Developing loyalty programs

– Page no.

3. Apply a Product Management Approach

Find new business models to generate revenue. Look to other industries for ideas.

Understand your customers intimately and what retail needs they may have which are not currently being satisfied by other retailers.

Ensure that your business articulates its value proposition clearly and to the right target market.

Always prepare well for the launch of new products. Ensure staff are trained so that they can answer questions.

Monitor your business and your results religiously.

– Page no.

About Us

brainmatesProduct Management People

Leads companies to strategise, design and deploy customer-centric products and services.

Offers professional consulting and training. Clients include industry leaders in media, communications, government, financial services, medical and software.

Brianna RagelAuthor and Product Marketer, brainmates8 years of experience crafting and executing strategic branding and marketing initiatives in Australia and London.

13

www.brainmates.com.au Suite 906, Level 9

84 Pitt StreetSydney NSW 2000 Australia

Tel: +61 (2) 9232-8147Fax: +61 (2) 9232-1694

Email: info@brainmates.com.au

For a full copy of the retail results, please visit http://www.brainmates.com.au/brainrants/retail-revival-a-fresh-perspective