Retail Industry Analysis: Changes and Future Trends in Australia

This report provides an analysis of the Australian retail industry, focusing on its evolution, key drivers of change, and future trends. The report highlights the significant role of the retail sector in Australia's GDP and employment, while also discussing major players like Aldi, Woolworths, and Amazon. It delves into the impact of technological advancements, consumer behavior, and automation on the industry. The report further explores the future face of retail, including zero-party data, customer centricity, and the rise of niche brands. Recommendations are provided for retail companies, including the adoption of an omnichannel system, leveraging social media, and enhancing in-store experiences. The analysis covers the period up to 2019, with some references to more recent trends, offering a comprehensive overview of the Australian retail landscape and its future trajectory.

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RETAIL MANAGEMENT
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8/29/2019
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Executive summary
The key purpose of the report is to analyze retail industry of Australia, as the retail industry has
found to face major changes for years. The report will discuss the drivers for the changes, and
perception related to future face of retail industry in Australia. According to the records that
4.1% of GDP of Australia is because of retail business and 10.7% of employment generation is
due to retail industry. The major players in the retailing industry identified by 2017 were Aldi
group, will words, big W, best farmers Ltd, Kmart Australia Limited. A small range of
Merchandise products is available at one stop shop that is the Big W Chain.
One of the biggest market leaders in retailing e-commerce business is Amazon, which has taken
over major business from Australian brands like big W. The online business has provided a large
opportunity for various retailing companies but has also increased competition among tea
retailing leaders in Australia. Another driver is the consumer behavior and preference of the
consumers regarding the retailing system.
Automation is another subcategory in technology advancement in Australia that has been
integrated into day to day operations of retail companies that has also transform the employee
efficiency and employment generation. Some of the recommendations for the retailing
companies in Australia after analyzing the current and future trends of a retailing system in the
nation include Omni channel system, Role of social media, and In store experience.

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Contents
Executive summary.........................................................................................................................1
Introduction to Australia’s retailing system....................................................................................3
Major changes and development in the retailing system in Australia.............................................3
Key drivers of a retail format change in Australia..........................................................................5
Technological factor....................................................................................................................5
Consumer behavior......................................................................................................................6
Increasing automation..................................................................................................................6
The future face of retail stores in Australia.....................................................................................7
Zero party data and retailers have been getting personal............................................................7
Customer centricity......................................................................................................................7
Small is a new big........................................................................................................................8
Recommendations............................................................................................................................8
Omni channel system...................................................................................................................8
Role of social media....................................................................................................................9
In store experience.......................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

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Introduction to Australia’s retailing system
The retailing industry in Australia has been established and exhibits great diversity for centuries.
According to the records that 4.1% of GDP of Australia is because of retail business and 10.7%
of employment generation is due to retail industry. By 2014, there almost 140000 retail
companies in Australia. There have been various competitive challenges in the retail industry for
years in Australia. For instance, online retail and entry of new global retailers in the nation have
changed the scenario and industry competition, which is beneficial for the consumers due to
diversification of goods availability. Other than this, the trend also includes the discount stores,
which include various retailing products under one store (Ayers, 2017). The major players in the
retailing industry identified by 2017 were Aldi group, Woolworths, big W, Wesfarmers Ltd, and
Kmart Australia Limited. Among these major retailing companies in Australia Big W is one of
the discounting department until store, which was founded in 1964, and it is one of the divisions
of Woolworths Ltd. A small range of Merchandise products is available at one stop shop that is
the Big W Chain. The popular and big W was separated by 1989. A major change in retail
industry was identified in 19 century in Australia with the development of department to store,
which would innovative retail establishment that was able to offer large number of consumer
goods within one place and was able to reshape the shopping habits (pc.gov, 2019).
Major changes and development in the retailing system in Australia
Major changes and development of retailing system in Australia reflects through the relationship
of technology, and retail that is the evolution of retail’s system adoption of technology. It
considered the evolution; in 1990s, the technological data was introduced in the logistics ERP

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and supply chain management. In 2000 the data technology for the digital matrix advertisement
were introduced, in 2010 the data technology considering the machine learning, social learning
and demand data was introduced. The evidence suggests that the major change in the retail
industry is due to changing consumer behavior towards the retailing market and technology as
the major source for development (Chou & Shao, 2016).
Retail industry includes large number of products for the example Grocery market, fashion
related products, consumer goods products, electronic products, footwear, active wear.
Introduction of the digitalization has changed the whole scenario of the retailing system; the
reason being online shopping is the current emerging change that has identified in the retailing
system in Australia. One of the biggest market leaders in retailing e-commerce business is
Amazon, which has taken over major business from Australian brands like big W
(humancapitalreview, 2017). In August 2016, the report on news provided regarding the
downsizing of Big W. The loss of the company was around one $50 million in 2017 and in 2019
the announcement by the company was made regarding another 110 million financial loss.
Moreover, some closure of a distribution center in South Australia is also identified to be
conducted in 2021. Moreover, there is large number of stores that are expected to be close in
Queen's land, NSW, south Australia, based in Australia and in Victoria (Chung & Fiore, 2017).

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Figure 1: (Source: (businessinsider, 2019)
Key drivers of a retail format change in Australia
The key drivers of a retail format change in Australia include
Technological factor
The online business has provided a large opportunity for various retailing companies but has also
increased competition among tea retailing leaders in Australia. For instance, Amazon has
changed the complete scenario of the retaining system and format and increase the consumer
preference towards the online shopping. It reflects opportunity for the companies to invest in
technology and decrease in traditional way of retailing industry that is departmental and
discounts physical stores (Gencer, 2017). Before it can be said that the Internet of things has
completely changed the scenario and it is one of the biggest drivers in transforming the retail
industry trends in Australia. Technology has not only affected distribution system of the

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company but has also provided opportunity to change or integrate technology through the
payment system, production process, product development and technology use in supply chain
management. Through increase in online business, companies like big W or Woolworths have
also invested in online shopping and have found it beneficial for the company and consumer as
well due to decrease in cost of physical stores and maintenance of physical stores. Moreover , it
has been identified that the advantage of targeting large number of customers across the globe
through online business (deloitte, 2019).
Consumer behavior
Another driver is the consumer behavior and preference of the consumers regarding the retailing
system. For instance, after evolution of department and discount stores, consumers are looking
for discounting prices for each product. This has reflected the price war at times because of
increasing competition in departmental stores for example Woolworths, Wesfarmers, Wal-Mart
and various other global chains have taken over the market by offering low prices for each good
and have considered cost leadership strategy as the major strategy to offer to customers
(businessinsider, 2019).
Increasing automation
Automation is another subcategory in technology advancement in Australia that has been
integrated into day to day operations of retail companies that has also transform the employee
efficiency and employment generation. For example automation to cash your book, stocking
shelves. The large companies like Woolworths and Wesfarmers have become fully incorporated
automation, by considering the business activities that are not providing any value to the
consumer experience, for example, checking out on stocking shelves (powerretail, 2019).

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The future face of retail stores in Australia
Forbes has provided future trends of the retail industry in Australia with the prediction through
research and investigation. It has been identified the 2018 that are reflecting a growing trend for
various brands and retailers moreover integrated with low unemployment and tax cuts. Some of
the trends that have been predicted for 2019 and afterword includes
Zero party data and retailers have been getting personal
Due to technological advancement and use of social media platforms consumers are becoming
more of their which has introduced with a new age of personalization and privacy. This has
introduced to shift the retailing trend to zero party data. This includes being information sharing
intended by the consumer, which are helpful for the marketers to build consumer relationship
and in return of personalizing customize marketing efforts, and product recommendation for the
consumers (Oh, 2015). The survey conducted has been reported that 64% of the customers are
comfortable sharing their personal information on purchase history with retailers you too taking
advantage or comfort bye getting personal preferences and personalization offers. Therefore, it
can be said that by third-party data the trend has been or will be shifted to the zero party data
(Mitchell, 2018).
Customer centricity
Due to increase in competition, personalization and attempt to satisfy customers the centricity of
the organizations in the retail industry have focused on words the customer reference, customer
needs, and customer satisfaction. It has been identified that the competition increase could lead
to price war or loss of customers due to lower switching cost; this has increased the value for
customer retention and customer loyalty. The companies or retailers are attempting to monitor

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social media platform of the potential customers which has offered robust solution customer
centric model (Pappas, 2016).
Small is a new big
Niche brands and digitally native brands have identified to be seen over the last couple of years
and are expected to grow in 2019 and beyond. The retail drive has provided a study, which
includes that the digitally native brands are planning to open large number of stores in preceding
five years. On the contrary, traditional retailers that that is brick and mortar business has found to
be closed to around 7000 stores and in 2018 the opening of the stores are 3000 in numbers.
These niche brands are identified to be the future of the retailing companies in Australia and
various traditional retailers are finding growth participation ways in retailing industry. One of the
ways companies is finding a way to grow its acquisition for example Wal-Mart that required
bonobos, which provide an innovative consolidation and partnership in the space (forbes, 2019).
Recommendations
Some of the recommendations for the retailing companies in Australia after analyzing the current
and future trends of a retailing system in the nation include
Omni channel system
It has been identified that the trend has been converting or shifting to words the Omni channel
system from the multichannel system that includes the integration of online and offline stores
along with the premium customer experience. This includes offering reach shopping journey to
the customers, which is integrated with off-line and online services. They are providing the
consumers an opportunity to shop both in store and online and off-line using the pick-up option

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as the store. This include distribution system that in walls online ordering and off-line picking up
the products in order to save time and in order to avail online offers (Zielke, 2014).
Role of social media
It is important to retain the customers due to the increase in competition, for this, the retailing
companies may consider the social media platform as the major role. This includes keeping their
of the consumer preferences and offering them the personalized shopping experience and
recommending the products that they must be looking for or would prefer to purchase (Mohd &
Sasmita, 2015).
In store experience
Other than the online experience or increase in technological advancement in, the companies
may use extraordinary in store experience to attract customers which is one of the threats for e-
commerce business. This could be suitable for the shopping retailer is considering the fashion
goods that are apparel and footwear which may have value of touch and feel aspect (Evans,
2011).

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Conclusion
From the retailing industry report, it can be concluded that by 2014, there almost 140000 retail
companies in Australia. The major players in the retailing industry identified by 2017 were Aldi
group, will words, big W, best farmers Ltd, Kmart Australia Limited. . A major change in retail
industry was identified in 19th century in Australia with the development of department to store.
The key drivers of a retail format change in Australia include technological factor, consumer
behavior, and increasing automation.
Forbes has provided future trends of the retail industry in Australia with the prediction through
research and investigation. Some of the trends that have been predicted for 2019 and afterward
include zero party data and retailers have been getting personal, customer centricity, and small is
a new big. Introduction of the digitalization has changed the whole scenario of the retailing
system; the reason being online shopping is the current emerging change that has identified in
the retailing system in Australia. Automation is a subcategory in technology advancement in
Australia that has been integrated into day to day operations of retail companies that has also
transform the employee efficiency and employment generation.

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References
Ayers, J.B., 2017. Retail supply chain management. Florida: CRC Press.
businessinsider, 2019. report-guide-change-retail-industry-2018-9. [Online] Available at:
https://www.businessinsider.com.au/report-guide-change-retail-industry-2018-9.
Chou, Y.C. & Shao, B., 2016. The impact of e-retail characteristics on initiating mobile retail
services: A modular innovation perspective. Information & Management, 53(4), pp.481-92.
Chung, J.E. & Fiore, A.M., 2017. The Effects of Shopping Motivation and an Experiential
Marketing Approach on Consumer Responses toward Small Apparel Retailers. Fashion, Industry
and Education, 15(2), p.11.
deloitte, 2019. consumer-industrial-products. [Online] Available at:
https://www2.deloitte.com/content/dam/Deloitte/au/Documents/consumer-industrial-products/
deloitte-au-cip-retail-trends-technology-in-retail-240816.pdf.
Evans, J., 2011. Retailing in perspective: the past is a prologue to the future. The International
Review of Retail, Distribution and Consumer Research, 21(1), pp.1-31.
forbes, 2019. 10-predictions-for-retail-in-2019. [Online] Available at:
https://www.forbes.com/sites/gregpetro/2019/01/04/10-predictions-for-retail-in-2019/
#60450f475f13.
Gencer, Y.G., 2017. Supply chain management in retailing business. In Ethics and sustainability
in global supply chain management, pp.197-210.
humancapitalreview, 2017. Woolworths Growth Academy: Developing Local Retail Skills.
[Online] Available at: http://www.humancapitalreview.org/content/default.asp?Article_ID=976.
Mitchell, S., 2018. Coles needs to do more to regain price leadership from Woolworths. [Online]
Available at: https://www.afr.com/business/retail/coles-needs-to-do-regain-price-leadership-
from-woolworths-20170712-gxa74d [Accessed july 2017].
Mohd, N. & Sasmita, J., 2015. Young consumers’ insights on brand equity: Effects of brand
association, brand loyalty, brand awareness, and brand image. International Journal of Retail &
Distribution Management, 43(3), pp.276-92.
Oh, C.H., 2015. Regional and product diversification and the performance of retail
multinationals. Journal of International Management, 21(3), pp.220-34.
Pappas, N., 2016. Marketing strategies, perceived risks, and consumer trust in online buying
behaviour. Journal of Retailing and Consumer Services, 29, p.92.