What’s New September-October 2011

Google, Spreets and Blogs-Retail word of mouth

Women Shopping Online

Everyone knows that Australians are more connected to the internet now than ever before, with Smartphones, Wi-Fi, and the oncoming National Broadband Network poised to only increase this trend. It is not a trend that has gone unnoticed, with businesses, advertisers and retailers all jumping onboard.

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But how does the average Australian actually use the internet to deal with their shopping and retail desires? There is more to the matter than a shopping trolley icon on a website, which dominates discussion of the impact of the internet upon retail. There is a whole other world out there where customers can find out about the products they are keen to buy, or maybe just considering for future purpose. The internet can turn word of mouth (WOM) marketing into a global phenomenon through Social media like Facebook and Twitter, as well as the upcoming Google +.

Product review websites and blogs offer an insightful view of a possible purchase and can sway the uncertain buyer better than any advertisement could. Then the mobile power of the Smartphone gives the customer a chance to learn about bargains they may be interested in, having the information delivered right to their pocket or handbag.
So, what forms of digital media do Australians use to find out about, or talk about shopping?

Digital Media graph
Source: AMP Capital Shopping Centre – Shopping Intent Report July 2011 (Click for larger image)

The highest result was for search engines, with 61% of Australians using this form of digital media to find out about shopping. This is no great surprise, as the humble Search Engine is the cornerstone of the internet, acting as a point of reference to find different forms of digital media that can tell you about the product.

Retailer Websites are the second most popular form of digital media to find out about or learn about shopping. Even if the retailer does not have an online store, this suggests that providing at least some form of online brochure for customers to use to find out about the product, is essential in Australian retailing.

Only 15% of Australians who have access to the internet do not use some kind of digital media to find out about or talk about shopping, obviously with older Australians more likely to fit in this category while younger Australians are more likely to make use of this resource. While there is no singular form of digital media Australians rely upon for shopping news, reviews and discussion, the vast majority of us invite digital media into our retail-experience, either using it to inform ourselves, or inform others.

Of interest is the showing for Smartphone apps of the three key retail-varieties. Only 6% of online shoppers used apps that compare prices, a further 6% use apps that provide coupons, and 5% use apps that alert shoppers to bargains. While this seems small, the Smartphone penetration into the market is still kicking off, as is the use of Smartphones for online purposes, as talked about here. But as the use of Smartphones grows with these early adopters, so will everyone else pick up on this technology and the opportunities it affords.

The other point of interest is how many forms of digital media the average online Australian actually uses. The average Australian uses 3.64 different forms of digital media when talking about or finding out about shopping. This increases with youth and decreases with age, with Australians 18-24 years of age using an average of 3.75 different forms of digital media, decreasing steadily down to a still surprisingly high 3.11 different forms of digital media for Australians 65 years and over.

In all, the result to take away from this is that the Australian shopper is growing more and more connected, and that fact is not going to go away. Older Australians are slower to take up this new technology, but the up and coming generations – the big spenders of tomorrow – are already using the possibilities of this technology. Can you afford to not being on board?
For more results, have a read of the AMP Capital Shopping Centres Shopping Intent Report.

Contact Us to ask for a copy today!

By Stephen Richard

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How can we sell more chocolate?

Bars of ChocolateLast week I presented at the AMSRS Conference (Australian Market and Social Research Society) on shopping trends in Australia today. I had interesting bedfellows as I was placed in the FMCG stream (fast moving consumer goods).

While I was talking about Australian’s frugal fever and the problems with fashion, my learned colleagues spoke about how they invent new breakfast cereals and the different emotional attachments consumers have to wholemeal crackers versus plain crackers.

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It may surprise some to know, that while what I talk about in the retailing and property arena is considered to us – mainstream, when you move to the research stream (dominated by FMCG research) our conversations and findings are very niche.

After my presentation, I was flooded with questions about the Australian shopping experience; online, use of supermarkets, time in centre. Surprisingly, so much of what I had to say was new to the FMCG market. A market that spends a significant amount of time and money, getting the balance of taste right in the product, and packaging correct in delivering the product, and all this got me thinking……

FMCGs are categories mainly sold by supermarkets and pharmacies etc. and the shopping centre industry works a lot with these retailers. But during my discussions it became very apparent that these product sellers want to get closer to the consumer; and I think shopping centre owners can help, and by doing so we just may be able to breathe some retail theatre back into shopping centres. This is not intended to take away from retailer sales but create more occasions for the consumer to buy and interact with the product.

Take chocolate as an example. Where do we buy chocolate in a shopping centre? Mainly the supermarket, a vending machine in the car park, the newsagency or maybe another specialty chain like Darrel Lea or through the pharmacy.

But when do we want to eat chocolate? Usually in the afternoon or just after a meal, particularly for women.

Where do we mainly eat in shopping centres – in a food court. Can you buy chocolate in a food court? NO – is there a gap YES.

Solution: What if we did a roaming casual mall lease with a major brand that travels the shopping centre selling chocolate from 12:00 midday to 4:00pm through the food court – like the cart you see at the movies or in Charlie and the Chocolate Factory. The design of the trolley cart could provide a sense of theatre and fun and bring the brand partner closer to the consumer.

This is a small idea (and may not be a great idea as 8 out of 10 new ideas typically fail) but it illustrates as an industry we need to think differently about how we facilitate the selling of goods and services in our centres. We need to find avenues to bring major brand sellers closer to the consumer in new and interesting ways because that’s what consumers are telling us they want!

They are generally bored with the in-store experience, so we need to work harder to make the centre experience more compelling. The industry is full of innovative and clever people we just need to change it up and try a few new ideas in our retail spaces.

By Helen Bakewell

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How a perfume patch could reinvent retail

Shopping mall
One of the big issues facing Retailers and Shopping Centre Owners at the moment is the pressing concern of online retailing, signalling changes in the way we shop that is not on the horizon, but is actually here. While this is heralding changes in retail, it is far from the foretold disaster that it is being made out to be.
In store retailing still accounts for over 95% of retail sales in Australia – so it is still the main game. The steps required to bring physical retailing back to the forefront of every Australian’s mind and ensure that online shopping is thought of as simply ‘AN’ option instead of ‘THE’ option, retailers and shopping centre owners just need to work out what it is that shoppers want from their centres and stores. SIMPLE!

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In planning out a way to improve the performance of physical Retail, we need to keep in mind the two sides of the coin.

  • Where does physical retailing lag behind online retailing? How can this be improved so that physical retailing is viably competing?
  • Where does online retailing lag behind physical retailing? What can be done to capitalise on these strengths?

In looking at the Australia-wide Directional Insights Benchmark results for 2011 (available for free here), the possible solution can be found on page 27, the Gap Chart. The Gap Chart works by measuring two variables and comparing where they land. In this case the two variables are importance of an attribute in an average Australian shopping centre, and performance of an attribute in an average Australian shopping centre. If an attribute lands within the blue zone then it meets shopper needs, if it falls outside this region and turns red, then it does not meet shopper needs.

Gap Chart

Source: Australia-wide Directional Insights Benchmark results 2011, The Gap Chart

Of the attributes measured, four attributes underperformed on average in all Australian Shopping Centres compared to their importance. These attributes were:

  • Has stores that offer good value for money,
  • Ease of parking the car,
  • Good range of services and
  • A wide variety of different stores.

In a nutshell, this means variety of products, convenience of use and easy access to both services and stores, all areas that online shopping excels at in comparison to physical shopping. This tells us where bricks and mortar shopping centres are weak compared to online stores.

Currently online retailing’s strengths come from the solid combination of price and convenience, giving people easy access to what they are after, for a low price. To compete in this area, physical retailing needs to be made as convenient as possible for the shopper. Easy to park their car at the beginning of the trip, easy to find the stores they want and the products within those stores, easy to know what else is around that they might be interested in, and easy to find their car and get home at the end of the day. Increasingly we are seeing shopping centre owners address this through the use of increased technology for example, in the physical car spaces with Park Assist, and via apps for smartphones for “Find My Car”.

Physical stores cannot easily match some aspects of the convenience of purchasing online, the simplicity of pointing, clicking and receiving in the post. While it may not be possible to completely match the ease of ‘click-and-buy from your own living room’ , by maximising the convenience available to the shopper, shoppers are more likely to consider physical stores a viable alternative in the future, especially if physical stores can also offer what online stores cannot.

So what can physical shopping centres offer the customer that online stores just cannot compete with? Many things…

Shopping centres can offer an experience or a day out with friends. Talking to someone on Facebook is just not the same as having a coffee and a catch up in a local cafe, not to mention shopping with a friend and comparing purchases. Shopping centres and retailers need to consider what it is that makes them such a great place for an outing and capitalise. A convenient place to eat something a little different – you go in, sit down, order and eat – as well as a great central location to meet people. The shopping centre and the stores within it are a convenient landmark for people to meet at, and if they provide activities to keep people in centre, they are a great place to spend the day.

In addition there are also the tactile benefits of ‘Skin-time’ as opposed to ‘Screen-time’. A common theme when asking shoppers what they prefer about physical shopping to online shopping is the ability to physically interact with the object before purchasing it. Being told a TV is HDMI and 36 inches by 24 inches in size is one thing, actually seeing the crispness of the image and the genuine scale of the screen is something else entirely. That is what skin-time is for; it is a chance to see, feel and hear the product in all its glory rather than a shrunken image on a screen flanked by the promise of its capabilities and quality.

However innovation is probably the biggest opportunity for physical retailing. In the 1850s when Bon Marche (the first department store in France) introduced escalators – people arriving at the top after their exhilarating ride were offered smelling salts to revive them…. what can we provide today in a shopping centre experience that has that effect? The wow factor of physical retailing needs to be rethought as a further way to attract and retain retail customers…For further ideas watch the recent SBS series “Seduction of the City – the birth of shopping” dedicated to the rise of department stores over the last 150 years.

Product exclusivity is also the retailers’ friend. Before online retailing many products were found “exclusively at…..”. Retailers need to increasingly manage their supply chain and take charge of their merchandise to make their store the one stop shop for their products. Not convinced, then have a look at the current ABC series “The Next Big Thing” which addresses this issue directly with great retailers like Boots Pharmacy sourcing their own innovative products and providing them exclusively to their shoppers through their stores.

Where is the product innovation? Yes we have seen it in the Apple stores; they effectively reinvented the mobile phone, but what about other products? Why isn’t someone reinventing perfume for the female traveller? As you are no longer allowed to travel on planes with perfume bottles in your carry-on luggage why can’t you wear a patch that makes you smell good all day, or what about disposable perfume wipes in your favourite scent that you can carry in your handbag so you can freshen up before attending a meeting?

It is too easy to think innovation is only available in technology products, or that there are no more thrills to be had in-store, or that everything is available online. As retailers and shopping centre owners we need to take charge of the 95% percent and grow that along with our 5% online into 120% total through product innovation, supply chain control and in-store experiences….

Remember that in 1899 the Commissioner of the US patent office said “Everything that can be invented has been invented. “ Oh how wrong he was…

By Helen Bakewell

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It’s not just new brands that excite…there are some old favourites that remain strong in the hearts of consumers..

There has been lots of attention directed at brands making their debut into Australia, of which Zara is consistently hailed as the hero of this new wave. Furthermore, the excitement generated by such brands is seen to be another reminder of a flat and uninspiring local retail offer. But there are some existing and established brands in Australia that still create excitement at the thought of them. This list includes Sizzler, Hogs Breath, IKEA, Aldi, Sumo Salads, Boost Juice and The Body Shop. I can hear you thinking, ‘what is so special about them?’. After all, they are seemingly ordinary brands, aren’t they? To the urban sophisticated residents of Melbourne or Sydney, I can appreciate they don’t stir the excitement that a Zara or Uniglo does.

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If you go out into the regions though, these brands hold a different value. The mere mention of Sizzler outside of urban centres instantly has people shifting forward on their seat, sitting upright followed up with a very passionate “oh yeh!”. Sizzler is an ‘oldie’ but for some the shine lingers. Part of that shine is in the nostalgia it stirs as customers recall positive associations with their childhood. Hogs Breath provokes similar excitement, though more a favourite of the Males, and Sizzler with its unlimited salad bar trips appeals to Females. Hogs Breath is an example of an Australian grown brand with a clear proposition. You know what you are in for when you go to a Hogs Breath! If they were to have a brand ambassador it could easily be Bob Katter.

Another is Aldi, and despite grocery retailing being such a low involvement category, Aldi can appear more emotive than Coles or Woolworths. There is no mystery around the appeal of Aldi, though some of you are thinking as you read this “I would never…”. Today, everyone knows someone, or at least knows of someone, who lines up for Aldi’s doors to open on a Thursday morning after diligently studying the catalogue. Typically, this is a parent or grandparent with an unexplainable need for various gadgets confusing this ‘need’ with the promise of an unbelievable bargain. Aldi’s appeal probably also lies in the power it gives customers to protest against the lack of choice in the grocery category. Customers who don’t live near Aldi are eagerly waiting to hear if their town or city will be the next target of Aldi’s expansion.

The Body Shop is another example of a brand still evoking interest, and it is so established that many of us have probably outgrown it. In the regions it still suggests something a bit special. However Anita Roddick’s ethics seem to count for little today, but it is more a case of it simply represents an affordable gift and pampering option.

Home grown brands such as Sumo Salads and Boost Juice cater to our ‘health guilt’. Both these brands are well established in our metropolitan shopping centres particularly the latter, so the fact they are still seen as so desirable may come as a surprise. In the case of Sumo Salads, it is not just any ordinary salad. The bowl and the personalised mixing creates a unique experience for customers, the salad is made with love and care.

Max Brenner is another that excites and there is certainly no mystery about why this brand is so emotive and inspiring. It’s a great story, appeals to young and old and transcends multiple occasions across the day. This experience really is highly sensorial, and no doubt accounts for much of its appeal.

When reflecting on what makes these brands so special for some, it comes down to that each one is unique and hasn’t really been replicated, well not with any great success. Sizzler owns the salad bar, Hogs Breath owns steaks, Sumo Salads owns salads and so on. The other common factor is that these all offer a sensory experience, partly because they are food and therefore laden with taste attributes, though it is something deeper. Max Brenner is chocolate and so are Lindt and Cadbury, though Max Brenner can claim the full chocolate experience. After all, you can’t smell the Cadbury bar as soon as you hit the store. This list of familiar, and somewhat ordinary brands, demonstrates retail brands that create unique experiences will have longevity. Their longevity amongst the more aspirational customer, who crave the latest and best experiences, is less guaranteed. For many customers who don’t live the sophisticated urban life, and let’s be realistic that is a significant part of the country, these brands are absolute gems!

By Kylie Newcombe
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Consumers: Cautious, but not paranoid.

Wallet with Padlock

For the current Australian shopper caution is the name of the game. They shop around for bargains, they are open to the idea of haggling, and if they do not need to buy something then they are likely to wait and consider.

However while they are cautious, it is important to remember they are not paranoid. Australians still want to spend money, but they want to be careful when spending it. The Global Financial Crisis has rattled them, but they are not running for the hills yet.

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In the latest AMP Capital Shopping Centres – July 2011 Shopping Intent Report, we continued the long running question – asking people if they expected to spend less, the same, or more than usual in different retail areas of spend. At first these results can look alarming, with large numbers of Australians stating they expect to spend less on plenty of areas of spend, but looking at it this way is not the whole story. This question measures intention, not actual spend.

Consumer Caution Table

People expect to be more cautious shoppers, but by comparing these results to the results of past ASI reports, we find that the intentions of Australians remains stable in nearly all areas. In fact, the two areas that have not remained stable are:

  • Take home food and groceries and
  • Big Ticket Items

Take home food and groceries has improved in the shopping intent of Australians, with more Australians expecting to be spending more on this category, than there are who expect to be spending less. This could be due to a combination of an increased number of us enjoying good old fashioned home cooked meals, as well as an increase in prices for some staples due to events like the Queensland Floods.

The only area of spend to show a genuine reduction in expectation of spend is Big Ticket Items, like Furniture and Large Electricals. However, like Take home food and groceries this may not be reflective of an expectation in purchasing from this category less, but instead of spending less. With shopping caution learned from the period after the Global Financial Crisis and the strength of the Australian dollar, Australians are now growing more and more comfortable with haggling, bargaining, and generally scrimping and scraping prices down. This behaviour is picked up upon by Retailers, who place those large red or yellow signs screaming ‘Bargain’ or ‘Discount’. The intention of Australians may not to be purchasing less from this category; it may be purchasing the same as normal, but merely spending less on it.

On a whole, the Australian consumer is still as nervous as they have been in recent times, but they are not getting any jumpier. That nervousness has not developed into paranoia. While they are not spending with the abandon they once were, they do spend and they do want to spend, they just want to be more cautious with their money. The Australian shopper is not locking all their money away in a sealed underground safe, they just want to put a padlock on their wallet but have their key at the ready.

For more results, have a read of the AMP Capital Shopping Centres – Shopping Intent Report July 2011. Download a copy here today.

By Stephen Richard

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The Buzz

Retail Apps

The Buzz Retail Apps

In previous eDirections we have talked about the use of shopping apps for customers. Continuing on from that, here are a few select Apps related to retail we thought we would highlight along with how they work.

Woolworths

The strength of Smartphone Apps for both the shopper and the store is convenience. By making things as convenient as possible for the shopper, it is easier for them to get what they want, and so they are more likely to return to your store time after time. The Woolworths App understands this completely. It has eight different functions, all of which make things more and more convenient for the consumer. Really like a particular product you have just run out of? Scan the barcode and it will be added directly to your saved shopping list, or use the Product finder to type in its name or category, if you want to try something different. This shopping list is then ordered by Aisle, making it easier than ever to find exactly what you want.

Then the App even goes as far as giving you offers and specials designed around the items you buy regularly, and giving you access to the weekly catalogue of specials so you know exactly when, what you want to buy is on sale. In addition, if you want to try a particular meal, there are 800 different recipes you can add directly to your shopping list, providing you with all the ingredients you need. Finally, you can keep track of your fuel saving vouchers earned and used.

Quickerfeet

AMP Capital Shopping Centres, has partnered with the brand new app ‘Quickerfeet’. Working with the new idea of Location-based marketing, Quickerfeet is a more focused version of a coupon app. Users can set a radius between 1KM and 100KM, as well as set favourite stores within the Quickerfeet set up, and when stores within this radius or their favourite stores have a sale going or event happening, Quickerfeet alerts the user. Once in store they show the retailer their quickerfeet message and they get access to the discount.

The retailers have to work with Quickerfeet, but it is easy to see how they will benefit from giving customers an immediate incentive to visit the store when they’re already in the area. Committed brands already include General Pants Group, Billabong, Lorna Jane, Bras N Things, Event Cinemas, Thredbo, AMF Bowling and Rydges Resorts, among others as the list grows.

Westfield iPhone App

Just like the App mentioned above, this application by Westfield understands that the guiding principles of what makes an App desirable to consumers is convenience, however whereas the Woolworths App gives a great deal of information about Woolworths, this application stretches across entire Westfield Shopping Centres.

Browse through the centre directory and map, finding exactly what store or sort of stores you are after, and even if those stores have any special offers at the time! Once you have done that, you can locate precisely where those stores are on the centre map and be guided directly there, even giving you the option of avoiding escalators and stairs by only taking elevators.

But if you are not in the centre for anything specifically, just to have a browse, then the App can provide for you too. You can look through all the latest centre offers by category, delivered directly to your Smartphone. Or even receive the latest news and events from Westfield so you can work out if there is anything inspiring you to visit.

By Stephen Richard

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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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