The New Year is the year for New Retail January 6, 2014 19:12

I was one of many in the industry who predicted a strong Christmas quarter for Australian retail and the early tallies coming back suggest this has indeed been the case.
Commonwealth Bank (CBA) analysts, Sam Teeger and Andrew McLennan dove into their huge pile of credit card data to advise this week that the discretionary spend index is up around seven percent – a solid result – and more importantly a significant jump on the comparable 2011 and 2012 sales (as an aside, I have always been a fan of the quality of the data that Sam and Andrew put out, well done and thanks guys).
I also suggested in October that this predicated uplift would have less to do with the positive cyclical trends but more to do with an increasingly cogent and comprehensive consumer-centric response from Australian retail, particularly the bigger and established end of town. I believe this to be the case.
So, could a new 2014 herald the solidification of Australian retailers stepping up to the plate as new retailers (and I am talking about the broad retail landscape, not just the younger and edgier pureplay brands we usually reference)?
I would say an unequivocal yes. It seems clear to me that Australian retail has taken an enormous stepped jump in the last twelve to eighteen months.
Walking around a Westfield, many stores now offer WiFi in store – a leap of faith, aimed at enabling the customer, not controlling them. Most shopfronts now proudly trumpet their online and mobile offer. The use of tablets in store seems more frequent, even common. Click and collect seems to be well bedded down. Visual merchandising seems snappier. Store staff seems more engaged and active. I ordered from a small Brisbane retailer and received my items overnight in Sydney. All small, general examples.
I accept that for some the experience might not be as rosy as I see it. But, consider the in store experience of two years ago, and few could argue with the notion that a newer and fresher retail renaissance is underway.
Does the industry have work to do? Most certainly. The crash of the Myer site for a week interrupted the rhythm of the new retail, for example. But fair’s fair, they are selling some decent volume and shipping respectable parcel quantities out of their own warehouse. As are David Jones – they are certainly in the game.
We might not always witness the prettiest passages of play from our traditional retailers, I agree, but they are all off the stands and on the field. The upswing in new retail is good news. It’s good news for the economy, for the retailers and their stakeholders, for their customers and for growth in employment. That isn’t just growth in employment numbers, but a focus on developing and retaining a smarter retail employee, for a smarter retail.
The key challenge for Australian domestic retailers, in all shapes and form, remains to meet, indeed exceed the offshore offer from global retailers. I am more bullish today than I was a year or two ago, that this fight back is now well underway. And this Christmas quarter, though no doubt still saw leakage to global retailers, gave a sense of what is possible when Australian retailers take the leap of faith and deliver a solid experience, a total experience, to Australian shoppers, without playing the channel anxiety card. Just as exciting is the hardy, growing band of Australian retailers selling offshore.
We will see more data over the next month or so and I am confident that all the indicators will point towards a retail renaissance underway in Australia. A letting go of the old retail, and a heralding in of the new.
2014 is the year we will need to ask ourselves if we remain an old retailer, or if we are transitioning to a new retail paradigm. There’s an enormous upside for those who do jump the fence, and significant challenges in my view to those who don’t.