Is Retail Really Struggling? A Personal Case Study
We hear the cry, “Retail is struggling” and we all nod wisely.
I suspect that it is more complex than the statistics that we have available. And, so, a personal example. Everyone is a collector. But no one collects like my mate. Hi Fi, antiques, models, textiles, knives. He amassed literally thousands of pieces in his fields of interest over decades. Six months ago, he was forced to downsize and so was faced with difficult decisions. Long story short, we teamed up to sell the collection on eBay. He had no tolerance for Joe public, so he provided photos, prices and descriptions and I was the “front office” and there is a book to be written on the people you encounter in the collector world. After 3 months, we had amassed gross revenue of $77,000, spent $4,000 with Australia Post and $8,000 between eBay and Paypal. We netted $65,000. After 3 months, I left my mate to it to complete the project (more models and antique clothing) and he has added to the total.
So, why is this story important?
Because it demonstrates that we have no idea of the real size of the digital economy. Further, we know even less about the C2C (consumer to consumer) market. And it is sucking big bucks away from traditional markets. Two relative amateurs have dragged approx. $100,000 of discretionary income out of the “retail” economy. Maybe, retail is not struggling as much as we think. Perhaps, it is simply taking a different form and remains hidden from the statisticians.
Ecommerce is booming worldwide and, in Australia, there’s no exception. Last year, we as Australians spent a total of A$28.6 billion on online shopping. As of January 2019, online shopping is responsible for 9% of Australia’s total retail sales.
Statista predicts that by the end of this year Australian online businesses will see a 15.1% growth in revenue. Also, the number of online shoppers will reach 20.3 million in 2019, which is 5% more than last year.
These growth figures, when overlaid over relatively flat total retail numbers, demonstrate the clear and continuing trend away from pure bricks and mortar retailing.
Every retailer is engaged in a chase for consumer discretionary spend. Consumers have a choice on how and where they spend their pay packets and they have choices across all areas of retail. Sometimes your competitors aren’t all that obvious. They may be operating out of their garage next door.
Author: Bernie Bicknell, Partner nem Australasia
This article is based on research and opinion available in the public domain.