Consumer behaviour and the retail landscape have significantly changed as a result of Covid-19. Australians have spent more time at or near home than ever before, with government restrictions and work from home recommendations.
This has meant that there has been a shift in the types of precincts that Australian consumers are frequenting over time.
During the height of the first wave of the pandemic, it was found that the larger centres experienced the greatest drop in pedestrian traffic, which was related to the level of restrictions and store closures. As an example, Chadstone Shopping Centre experienced a massive reduction in centre activity at the time. It was also found that the main pedestrian traffic in Chadstone was around the essential store offerings able to be accessed externally to the centre, reducing touchpoints for consumers.
However, as the largest of centres provide a retail and entertainment destination for consumers, they were also the precincts that bounced back the fastest once restrictions were eased.
During Covid-19, the types of environments which fared better were more strip based and neighbourhood centres. Consumers transitioned to local precincts as a result of working from home or being at home more often, and to support local and small businesses. In addition, these types of precincts offered convenient and external access for consumers looking to minimise their touchpoints and movements.
The uncertainty created as a result of Covid-19 meant that consumers were more selective with their spend, and what brands they were frequenting – turning to those local brands and businesses that they know and trust.
These trends are expected to continue, as a degree of working from home, or hybrid models of being in the office vs working from home, are anticipated to remain at least in the short to medium term.
These shifts have also meant that precincts reliant predominantly on more white-collar, commercial populations (such as CBD environments) have been more negatively impacted due to the pandemic, and have a way to go for their recovery.
At Geotech, we have been working with our clients to assist them with their network planning strategies, taking into account changing consumer and purchasing behaviours (of not only their customers but also within the mass market), and what this might mean for their brand moving forward.
Part of this includes utilising Mastercard Transaction and Sales Activity data as well as Mobile Device Mobility data, to track both retail precinct performance and consumer travel patterns. In summary, some of the main trends that we are seeing at Geotech as a result of Covid-19, using a combination of this data and other data sources, are:
- Local: there has been a shift of consumers frequenting more local strip based stores and neighbourhood centres. This is anticipated to stay for at least the short to medium term with a degree of working from home or hybrid models of working expected to stay;
- Loyalty: many consumers have become more brand loyal, to brands they know and trust, and in support of local business. Consumers have become more local and loyalty focused;
- Caution: there are proportion of consumers that have become more cautious in their behaviours, purposely limiting their touchpoints. These consumers have either turned more towards online and delivery channels, or have favoured bricks and mortar sites that are easy to access and have less touch points then others;
- Convenience: consumers are now demanding convenience with their transactions. With trends towards online and delivery here to stay, any bricks and mortar business will need to ensure they offer convenience and customer experience (over and above that of other channels).
While no-one has the answers for what the future might hold, at Geotech we have been working with our clients on key trends that we have been seeing, to assist our clients understand more about the changing retail landscape and consumer behaviour and what it might mean for their business moving forward.
If you would like to find out more, please contact Jeff Vassel at [email protected].