Retailers are feeling upbeat, with more than 90% expecting to see positive sales growth in 2019.
Australian retailers are approaching the Christmas trading period with a strong sense of optimism, according to Deloitte’s 2018 Retailers’ Christmas Survey.
The seventh year of the survey found 80% of retailers expect to see higher sales this Christmas compared to last year and more than 90% expect to see positive sales growth in calendar year 2019.
David White, National leader of Deloitte’s Retail, Wholesale & Distribution Group, said: “Broadly speaking, our retailers are optimistic. The overall market has performed relatively well in 2018 and, in spite of competitive and economic challenges, they appear to be carrying this optimism forward into the Christmas trading period.
“They expect to increase both their sales and profit margins compared to last year, pinning their hopes on two key areas in particular – a strong product mix, and an uptick in online sales on the back of investments they’ve made in omni-channel business models.
Discounting will remain part of the retail strategy, with 62% of responders expecting discounting to help drive sales, but most said they would begin discounting only after 25 December.
“Importantly, they are looking to hold strong on pricing this side of Christmas, with lower pricing only on the agenda as part of Boxing Day sale strategies,” said White.
Growth in online will be key
Nearly 80% of survey respondents are expecting growth of 10% or more in online Christmas sales, yet White says physical retailers can still connect with customers via more innovative store designs and concepts.
“Australia might finally be seeing the true acceleration of online retail that other developed markets have already experienced,” White said. “Of course, that doesn’t mean the physical store is in need of life support. The role of the store is changing away from just being a transactional space to an opportunity to build brand through an experience and service that can often only be achieved face-to-face with the customer.”
“Amazon has set the cat amongst the pigeons, bringing scale and capabilities that have the potential to strike in those areas in which Australian retailers are most vulnerable. Opinions remain divided on the size and timing of Amazon’s impact, but this Christmas will give us a better idea of just how much progress they’ve made.”
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