Shoppers under lockdown conditions in Australia’s two largest cities developed some serious pent up purchasing intent, with research from creative agency Spinach finding people chomping at the bit to spend on clothing, health & wellbeing as well as skincare, furnishing and appliances.
Many, including Kathmandu chief exec Michael Daly, are predicting a wave of “revenge spending” in the sense that consumers are poised to get ‘revenge’ for being cooped up indoors by spend, spend, spending. And early signs in NSW such as people queuing to get into their local Kmart suggest retailers need to get their shelves stocked, stat.
For the past couple of months, shipping issues and lockdowns have had a negative impact on sales in some categories while others such as grocery and liquor continue to rake in the big bucks. But a survey by out-of-home media company Shopper found 47 per cent of Aussies are planning significant purchases once restrictions ease with 59 per cent preferring to buy big-ticket items in-store. Of those, nearly a third are planning to spend up big and fork out up to $2,000.
How can retailers prepare for the onslaught?
For starters, the trend of shopping local isn’t about to go away anytime soon and indeed our research has found increased interest in buying Australian made products and shopping with retail businesses in local communities.
Similarly, Shopper found 36 per cent of Australians are now spending 80 per cent or more of their discretionary income within 5km of their home which, after doing so for many months, is likely to have become something of an ingrained habit.
To capitalise on this opportunity, brands should focus on their PMA (Principle Marketing Area) and play up their homegrown creds pointing out items made locally and marketing to consumers close by.
They might be cashed up but that doesn’t mean Aussie consumers are going to forgo value in their post-pandemic purchasing. A proportion of consumers will continue to look for bargains and smart retailers can make the most of this by focusing on value for money in their communications. We’re also seeing other elements contribute to the judgement of value for money including the sustainability ‘chops’ of the product or service. So, if you have a story to tell in this space, you will be rewarded by a growing number of cashed up customers.
Of course, at the heart of revenge spending is the return to doing things people have been unable to during lockdowns. From dressing up to travel and eating out, consumers are set to make a beeline for brands that lean in responding with offers that meet these intentions.
And the novelty of going shopping, for those that enjoy that sort of thing, will be high. So there’s an opportunity to cater to this with in-store promotions and unique experiences that money can’t buy.
Also getting in on the act are ‘buy now, pay later’ and other finance brands that service the retail space. Latitude Finance CEO Ahmed Fahour points to the company’s rebound from last year’s Victorian lockdown when pent-up demand led to a 43 per cent surge post-restrictions. If your retail brand is yet to delve into the world of ‘buy now, pay later’, this could be the perfect time to explore your options and there are plenty of them. Commonwealth Bank, Paypal and others have all entered the space in recent months.
Down here in Melbourne, the most locked-down city in the world, the urge for revenge is strong. And if those eager Kmart shoppers up north are anything to go by, when retailers are actually allowed to welcome in customers, they will get slammed. Given the disappointment online shopping has become, it’s worth getting prepared now to manage consumer demand and expectations.
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Note: Original article appears in the Professional section behind the paywall at insideretail.com.au.