What’s new May-June 2014

Australia’s Preferred Shopping Environments

A new report based on research conducted in Directional Insights’ Australian Consumer and Shopper Behaviour Report (ACSB), demonstrates that shopping centres retain a firm position at the top of Australia’s retail hierarchy, and that on virtually all tested attributes they outperform both high street retailing and online shopping. In the ACSB survey, respondents were asked to evaluate the importance of a range of attributes and to indicate which shopping environments performed best on each. The results were compiled to produce the Australia’s Preferred Shopping Environments Report.

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The tested attributes covered both utilitarian and experiential aspects of the shopping environment including: parking, accessibility, navigation, atmosphere, availability of product categories, retail mix, levels of service, and the quality and suitability of stores.

Shopping centres came out on top on all but one attribute – attractive coffee shops and restaurants – and even here sat only just behind high street retail precincts.

Shopping centres performed particularly well on parking and the provision of a secure shopping environment – both of which were rated as very important by shoppers.The capacity of shopping centres to incorporate a quality supermarket and fresh food offer was also highly regarded by consumers, as was the ease with which centres could be navigated.

High street retail struggled to compete on many of these attributes indicating the challenges faced by retail precincts receiving limited investment and lacking cohesive management. They did, though, perform well on the provision of appealing cafes and restaurants. This suggests that shopping centres still have a way to go in producing bespoke, ambient eateries that convey a sense of authenticity. This may in part be attributable to the prevalence of chain and franchise operations holding centre tenancies.

The report suggests that online retail will continue to take market share and performs comparatively well on a range of attributes, particularly ease of access and breadth of offer. Online potentially offers more diversity than any physical retail precinct can possible accommodate. The difficulty remains in the accessibility and visual presence of such a vast offer, as well as the willingness of consumers to explore it.

This, though, is clearly growing. The ability of bricks and mortar retailers to incorporate the strengths of online innovation into their multi-channel operations will thus play a role in determining consumers’ ongoing perceptions, not only of their own brands, but of the shopping centres within which they hold tenancies.  At the centre level, consciously combating the strengths of online through leasing strategies, technological innovation, marketing, promotional activity, and investment in the centre environment will be crucial to maintaining market share.

To access a free copy of Australia’s Preferred Shopping Environments Report, click here and for more information, give us a call on 1300 138 651, or email peter@directional.com.au.


Mobilising the Consumer

Individual customer loyalty and strength of affiliation across all customers are key indicators of retail health. It is thus important to understand the factors that influence consumer mobility across competing retail environments.

This is just one aspect of consumer behaviour that we explore in our new report Australia’s Preferred Shopping Environments.

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The research for this report was based on a survey of over 1000 shoppers across Australia.

One of the things we asked respondents to do was to assign importance to particular attributes of shopping environments, and then to rate them on performance of these attributes. Shopping centres performed particularly well in relation to strip retailing and online retail.

Table 1 indicates the four top tested attributes and the percentage of consumers who rated shopping centres as performing best on them. Performing well on the most important attributes as rated by consumers is a baseline benchmark for generating customer traffic.

The healthy performance of shopping centres compared with other retail formats on these attributes reflects the strength of the Australian industry, but also indicates areas where retail provision can improve.

Supermarket anchors and fresh food precincts are a core strength of Australian shopping centres. Developers have successfully incorporated them into centres of all sizes and the better operations have quality mixed specialty fresh food offers as well. Such cohesive tenancy strategies are difficult for other retail formats to compete with, although online will draw some custom with remote ordering and delivery take up over the next 5-10 years.

The dominance of car-based grocery trips is one factor in the ongoing importance of car access and parking for all retail environments. From the first, shopping centres were designed to marry car and pedestrian traffic, and car parking remains a major advantage held by shopping centres over retail strips. It is a key measure of accessibility and facilitates consumer mobility. Where retail offer should be measured in terms of ‘pull’ factor, poor car parking acts as a barrier to visitation. Improvements in layout and quantity then act to incrementally reduce obstacles to visitation.

Following 30 years of declining standards, customer service is one of the new benchmarks for successful retail. This is in part a result of the increased scrutiny that consumers are placing on retail operations since the GFC. Overlay this with an influx of international retailers running sophisticated and robust business models, and the challenges facing Australian retailing become clear.

For consumers, service has become a lightening rod for discontent with established Australian retail – particularly in the department store sector. Shopping centres were not as dominant on this attribute as others, suggesting that the major chains have an issue with service. The high importance that consumers attach to service, however, means that it, too, can act as a ‘pull’ factor. As competition heats up in Australian retailing over the next 3 years, this will be one determining factor between success and failure.

While many of the stores in shopping centres need to improve on their delivery, shopping centres themselves remain popular with consumers. The controlled and cohesively managed environment bequeaths many advantages, including strong performance on the fourth most important attribute – safety. In-house security staff, good lighting, and large customer traffic volumes all contribute to perceptions of centres as safe, secure environments for families, women and children.

Strong performance on these and other attributes, detailed in the Australia’s Preferred Shopping Environments Report, suggest that well-managed and located shopping centres are positioned strongly to deal with the rapid changes occurring in Australian retailing, and will face less upheaval that retailers themselves. To access a free copy of Australia’s Preferred Shopping Environments Report, click here and for more information, including consumer ratings of online and strip retailing environments, give us a call on 1300 138 651.

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Shopping Centres Catering to Booming Retirees

Consumers who are retirees or superannuated make up 21% of visitors to Australian shopping centres. While they don’t spend quite as much as some other occupational groups, they make a substantial contribution to turnover and play an important role in the social milieu of the modern retail centre. Furthermore, this age group is only going to get larger as Australia’s demographic shift to an older population continues in the forthcoming years.

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For these older consumers, attractive public spaces are environments that foster convivial relationships; places where they can meet up with friends and family, find protection from the elements, feel safe and comfortable, and generally ‘hang out’ (if that’s not too youthful a phrase). For this, they need venues that are centrally located, on or near major transport routes, and that are perceived to be interesting, exciting and welcoming. Hence, the attraction of shopping centres.

According to Directional Insights 2013 Consumer Shopping Benchmarks, retirees and superannuants average $59 for every visit made to a shopping centre (compared with the average spend of $69). While they have a lower average spend across all categories, they do evince a good spread of expenditure. When making purchases, they average $51 on Food Retail, $54 on Apparel, $40 on retail services and $39 on Homewares. As with the overall averages women in this customer group spend more than men $64 compared with $48.

Spending does decline with age. Retirees and superannuants between 60 and 64 years of age average $67 per shopping trip, only just below the average of all customers. Those aged over 75, though average just $52 on each shopping trip.

A recent research project at the University of Tasmania investigated the shopping centre behaviour of older people and, based on extensive interviews, found a number of issues that compromised their experience. Many of these concerned mobility – how respondents travel to the shopping centre, and how they move about within it.

Making up more than a fifth of customers, though, these expenditure figures represent a substantial contribution to turnover. Catering to these customers, in addition to fulfilling a social role, is thus very important economically.

The researchers found that the main obstructions to older consumer’s mobility in and around shopping centres concerned car parking, floors,  seating, and escalators. Key issues for older people in shopping centres include:

Car Parking

  • More parking reserved for seniors, closer to the entrance, is required
  • Car parks located downstairs below shopping levels make access difficult
  • Trolleys left in car park impede access for older consumers
  • They would like more taxis and taxi stands


  • Slippery (dangerous)
  • Too hard (causes discomfort)
  • Uneven and cracked floor tiles (dangerous)


  • Large shopping centres need more seating
  • Arms on chairs and seating are needed to help customers get out of chairs which can  also be too low
  • More social arrangements for seating and more tables for public usage


  • ‘Travelators’ are easier to negotiate than escalators
  • Lifts are not always well located in relation to car parks
  • Alternatives to escalators are needed if they break down

Other issues included the need for larger signage, attitudes of management towards older people, long waits at supermarket checkouts, high noise or music levels and difficulties navigating maps.

Some of these issues can be solved relatively easily. Other structural factors take time and money, but new and re-developments should be sensitive to them – especially with the ageing of Australia’s population. Australia’s baby boomers, who have grown up and matured with shopping centres, still demonstrate an ongoing liking to spend. Their spending patterns will far exceed those of current retirees and superannuants cited above. Shaping retail environments to assist rather than hinder their shopping trips as they age will be a characteristic of successful shopping centres over the next 10 to 20 years.

Scholarly research cited in this article can be found at: Rob White, Julie-Anne Toohey and Nicole Asquith, ‘Seniors in shopping centres’, Journal of Sociology, 2013, pp. 1-14.


Shoppers for Home Improvements

The Australian Consumer and Shopper Behaviour (ACSB) Report provides data on a broad range of consumer shopping behaviour and purchasing patterns. In this article we examine the homemaker sector by combining the data sets of consumers who have purchased homewares and major household items in the past 6 months. For the purposes of this article, we’ll describe these shoppers as purchasers in a ‘Home Improvements’ category.

Those who make purchases in this category can be segregated into two distinct shopper profiles: Engaged and Disengaged shoppers. The former regularly purchase items in the Home Improvement category (every two months or more often); the latter only purchase in the category once every six months or less.

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Engaged and Disengaged shoppers differ not only in their shopping frequency, but in their approach to shopping.

Demographic Indicators

Income and age are two of the main drivers of Engagement for Home improvement shoppers: Engaged shoppers tend to be younger with higher average household incomes. This presents some unique challenges as younger shoppers tend to be less loyal and are more research driven in purchasing preparation.

Engaged Home Improvement shoppers are also more likely to be living in households with children (40%). It should be noted that shoppers living in this household structure are becoming increasingly engaged with online as a purchasing platform. Their influences are also more likely to be digital as they are utilising a myriad of sources such as search engines, facebook and retailer’s and manufacturer’s websites. Paradoxically, they are also increasingly attracted to shopping centres for the convenience and atmosphere.

Of those customers with children, Young Families are the powerhouse for the home improvement category and make up nearly a third of all Engaged customers. However this is a time poor category, with almost three quarters working full-time or part-time, so efficiency and convenience are very important to these shoppers.

Behavioural Patterns

The purchasing process that shoppers go through has forever changed, becoming increasingly complex and multifaceted. No longer do shoppers traverse a straight line to purchase; instead we see a highly dynamic journey, characterised by multiple considerations and influences resulting in a more informed and practical decision to buy.

Shoppers know they now have more power to choose where they shop, when they shop and how much they pay. This practical approach to shopping means they are less likely to impulse buy and more likely to be actively searching for the best value. This is particularly the case with Engaged shoppers who shop through a greater variety of retail channels.

Engaged shoppers are willing to look beyond the shopping centre when purchasing, suggesting dissatisfaction with the offer of mass merchants, and a desire for more individuality and eclectic ranges.

Table 1 demonstrates these trends, as well as a willingness by Engaged shoppers to invest both time and money in maximising purchasing value.


Homemaker and Large Format Retail centres face a number of challenges in getting their message out to customers as they tend to have smaller marketing budgets and larger, more diverse trade areas than traditional shopping centres.

On top of these obstacles, the rise of digital media has brought fragmentation, increasing the channels through which customers want to hear about specials and events – be it by social media, SMS or through contextual marketing.

At homemaker centres approximately 50% of customers are aware of promotional activity conducted by the centre. This means that the other 50% of customers are not aware of any marketing.

When looking at specific media influences for shoppers in the Home Improvement category, we see that again Engaged and Disengaged customers vary in their consumption patterns. Chart 1 demonstrates an ongoing strong appeal for traditional media across both shopper types. Chart 2 shows, however, that we find more diversity when looking at the consumption of digital media marketing.

This analysis shows that there are distinct ‘types’ of Home Improvement shoppers that evince different shopping, spending and marketing consumption patterns. Retailers and centres in this category should be aware of these differences, coaxing greater visitation from Disengaged shoppers, and ensuring satisfaction amongst regular visitors. It is worth noting the proclivity of Engaged shoppers to look elsewhere, including online. As big spenders and regular visitors these customers are important to retain. An awareness of product mix, variety, good service and online competition remain very important in doing so.


The Buzz

As retail is now well and truly into the disruptive digital age there are increasing challenges for retailers and retail property owners. However what remains at the heart of retail is the customer. Consequently, retailers and property owners cannot afford to simply carry on doing what they did yesterday as yesterday’s consumer is different to todays and will be even more different tomorrow.

What yesterday and tomorrows consumers do have in common is the need to shop.

However, with so much choice, both online and in the offline world, the question is: where will they shop and how will they shop? Consumers are savvier and more demanding than ever before, and are placing more emphasis on value, convenience and service. Retailers and retail property owners that really understand their customers and respond to these changes will be better equipped to differentiate themselves and succeed in the next phase of retail’s evolution.

Because it is more important than ever before to keep in touch with our customers, Directional Insights’ has established the Australian Consumer and Shopper Behaviour Report (ACSB). Research for the first ACSB Report was conducted in March 2014, with over 1000 Australian Shoppers surveyed online.  The research revealed important indicators of shopper behaviour, distinctive mindsets amongst different groups of consumers, preferences for particular shopping environments, and data on recent and projected product category purchasing patterns.

We explore some of these findings in this edition of eDirections. For more information on the ACSB Report, give us a call on 1300 138 651, or email peter@directional.com.au. .


NOTE: This is general information only and does not constitute advice nor take into account any individual’s or company’s specific requirements, and should not be relied upon as such. Readers are advised to seek specific advice. Directional Insights makes no  representation nor gives any warranty as to the accuracy of future forecasts. This information is not intended as investment advice or other advice and must not be relied upon as such. You should make your own inquiries and take independent advice tailored to your specific circumstances prior to making any investment or other decision. To the fullest extent permitted by law, any conditions, warranties or liabilities implied by law into these conditions are hereby excluded. All copyright resides with Directional Insights Pty Ltd.


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    To discover the current strengths and challenges across Australia’s different retail environments  click here.
    See what attributes drive customer loyalty and consumer mobility by clicking here.
    The profile of the Retired and Superannuated shopper get broken down and brought into the spotlight here in the most recent eDirections.
    Want to gain insight into the Homemaker Consumer from our new Australian Consumer Shopping Behaviour Report? Then click here to read more
    Directional Insights has a new research report! Click here to find out how you can access it.