Society has just begun to see the retail industry return to the closest version of normal since COVID-19 hit. However, with the global pressures of the cost-of-living crisis, the environment of the retail industry is expected to shift. Shoppers around the world are now having to ask themselves “what can I live without?”, to compensate for exorbitant basic living expenses. Retail sales have reached an all-time high with results exceeding pre-pandemic figures. Despite this, inflation challenges suggest a significant decline in customer spending.
According to Deloitte Access Economics latest Retail Forecasts report (Q2 2022) shoppers are expected to re-prioritise their spending depending on fluctuating living costs. Principal report author and Deloitte Access Economics partner, David Rumbens explained that the growth outlook is positive, however, the next couple of months will be significantly challenging for consumers, with expected impactions for the retail industry.
“Inflation is now a cold, hard reality, to the extent that the majority of turnover growth over the next few years is expected to be driven by prices rather than volume,” David Rumbens said.
The price of non-discretionary goods and services has risen by 6.6%, with food retail prices expected to rise by an additional 7.6% by December 2022. Deloitte predicts that despite the expected growth in health, food, fuel and housing prices, customers are not likely to decrease their spending in these areas. Subsequently, this will put a significant strain on the sales of discretionary goods. The retail industry can stay ahead of the unavoidable price pinch by supporting their local shoppers and in turn, increasing customer loyalty.
Fortunately, Australians are choosing to shop locally post-pandemic. New research from CommBank Rewards shows that more than eight in ten shoppers are currently, and intend to continue to shop locally to support small businesses recover from the impact of COVID-19. Using deals, prizes and discounts on your centre app, retailers can return the support to their loyal customers.
While a prize may seem like a small gesture, it is proven to improve customer experience and encourage returning customers. With Norbit, customers can earn points when shopping at their local shopping centre, further driving foot traffic and dwell time.
During a cost-of-living crisis, customers can often associate shopping with a negative connotation. Rewarding returning customers while they face pressures of increasing cost-of-living, can significantly improve a customer’s relationship with shopping. To counter the negative connotation, you can greet customer purchases with points or the chance to win a prize. Furthermore, providing customers with discounts and deals on discretionary goods and services incentivises spending in these areas.
The biggest challenge for bricks and mortar stores is remaining relevant and engaged. With Norbit software, your centre app will ensure each store has a digital presence. In advertising deals, prizes and discounts advertised on your centre app, you can ensure that your customers are being looked after during this time of economic strife, while keeping your retailers in the minds of consumers.