Armchair buyers vs Social Shoppers – Amazon’s impact on retail
With the pending arrival of Amazon to Australia’s shores, there have been questions about how it will impact shopping centre traffic.
oOh!'s Commericial Director of Retail Sales, Blair Hamilford, explores the implications for the Retail centre.
While acknowledging the Amazon behemoth will change the face of retail as we know it, the extent of that change needs to be put into context of shopping trends unique to Australia.
The doomsayers have painted the arrival of the global retail giant as a major game changer. Sure it may introduce a new level of speed, supply chain accuracy and an enhanced online shopping experience. But there are a number of factors that will mitigate against Amazon’s performance here reaching the levels it has in the USA.
These include Australia’s conservatism to online shopping, the massive investment made into improving the look and feel of Australian shopping centres to create a destination for leisure where shoppers can dine, socialise, access services, be entertained and of course, shop. Then there is also the fact that shopping centres are viewed as the “pantry” for most Australian households.
The threat of online shopping rocking the foundations of bricks-and-mortar stores has been a topic of conversation for many years, with the rationale being that people needn’t leave their home when you could do it from the comfort of your armchair. But the one thing against that proposition, is that most Australians like to leave their home, be out and about and have social interactions.
Despite online shopping being present since 1995 (through sites including EBay and, you guessed it, Amazon.com), the rate of adoption of it in Australia has not reached the levels of other markets.
Australians are conservative online shoppers compared to the rest of the world. KPMG's 2017 Global Online Consumer Report found only 35 per cent of Australians made their last online purchase from an online-only retailer compared to 50 per cent globally. And while online sales in the US as a percentage of all retail sales inching towards 10% in the USA - according to Y Charts it was at 8.3% in December 2016 - estimates from the Australian Bureau of Statistics suggest that as of February this year it accounts for just 3.6 per cent of Australia’s total retail turnover. What’s more, the online share of total retail sales has softened from the recorded peak of 4.1 per cent in November 2016.
When it comes to grocery sales, the penetration of online transactions is similar. According to ICG’s 2015 RetailAnalysis report, online sales accounted for 2.3% and was forecast to just hit the 4 per cent mark in 2020.
Australians are not only conservative online shoppers, but are social creatures that do like to be out and about in their community and the trip to the shopping centre is more than just shopping. For some it is entertainment and for others a destination to catch up with friends.
Research that oOh!media undertook with The Seed identified seven types of shoppers - each motivated by different drivers. It found even those described as “chore-haters” who just want to get shopping done, indicated a level of enjoyment from going to the shopping centre.
Bricks-and-mortar stands firm
"Australians... are social creatures that do like to be out and about in their community and the trip to the shopping centre is more than just shopping."
The power of Retail will continue – as will retail media
The future of retail remains strong – despite the arrival of an exciting new market entrant that adds a new dimension to online retailing.
Shopping centres will continue to play a significant role in the life of Australians well into the future, for shopping, entertainment and social connection. Australians will continue to enjoy the tactile experience of shopping – picking out their own fresh fruit and vegetables, feeling the material and trying on their purchases and having staff to help inform them with purchases.
Even the online retailer that has been identified as the biggest threat to the shopping centre has physical stores as part of their global roll out plans.
From my point of view here at oOh!, we believe this all bodes well for Out of Home retail advertising well into the future.
That is why we invested more than $20 million in expanding our inventory of classic and digital signs, and introduced a range of new, high-engagement digital screens that enhance the retail centre experience.
That is why we are committed to continuing to lead the market with our network of more than 540 centres (the largest retail network in the country), that reaches more than 11 million Australians every fortnight.
And it is also why marketers from a range of categories are increasingly using the retail channel to not only influence the path to purchase, but reach target audiences while they are in the right frame-of-mind including new categories such as the automotive industry.
The power of Retail will continue – as will retail media
About Blair Hamilford
Commercial Director of Retail Sales
Blair has over 15 years’ media sales experience in Australia, the last four leading and growing oOh!’s Retail Media channel.
He was in sales at APNO and is familiar with the transit portfolio, including buses and trams. After six years of developing the Westfield Brand Space offering, he joined oOh! in 2012 as the Commercial Director Sales, oOh! Retail.
Since then oOh! has expanded its unparalleled portfolio of assets in leading retail centres and introduced a diverse range of digital screens to complement its classic offering and increase the connection between brands and people.
He played a crucial role in the development and rollout of oOh!’s Excite screens, Australia’s most interactive digital network, and its Evoke network of large format retail billboards.
As the media landscape is becoming increasingly ‘missable’, our goal is to help advertisers find better ways to engage their growing audiences whilst they are away from home. With the largest audience reaching portfolio of digital and classic outdoor opportunities, we deliver innovative Unmissable media solutions in environments proven to drive results. Embracing technology drives our success as we progress beyond the screen and lead the industry into richer and engaging online content.
Determined to push the boundaries of Out Of Home, technology and content globally, we are committed to working closer with advertisers to help deliver greater ROI.
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To learn more about oOh!’s insights on the retail environment and how to reach target audiences while they’re in the right frame of mind, contact us today.