Black Friday and Cyber Monday sales may spark a revival for bricks and mortar retailers
Could the high street shop be set for a long-awaited revival?
After 18 months of COVID-19 lockdowns which hit bricks and mortar stores hard, retailers are feeling confident again.
The Black Friday and Cyber Monday sales this weekend signal the beginning of the busiest time of year for retailers with finder.com.au estimating Aussies will spend anywhere from $3.8 billion upward over the four-day splurge and that will translate into spending that will surge past pre-pandemic levels leading into Christmas.
The upbeat mood is reflected in CBRE’s latest retail flash survey which showed more than a third (37%) of retailers reckon it will take up to six months for business to return to pre-pandemic levels, with a further 43% anticipating it will take 6-12 months.
That overwhelming optimism could lead to a surge in demand for prime high street frontages with 76% of retailers identifying prime high streets as their next target. That’s more than double the number of respondents listing alternative locations for new stores, such as CBD malls (33%).
CBRE’s director of retail leasing, Leif Olson, said demand had steadily increased since the Sydney and Melbourne lockdowns had lifted.
“We’ve noticed that retailers with pending lease expires are looking to secure more high-profile locations,” he said.
“The sentiment is positive towards physical retail space still playing a key and valuable role, with a primary focus on customer experience.”
Australian Retailers Association CEO Paul Zahra agreed.
The Association is predicting Australians will spend $5.4 billion this weekend and $59 billion in the pre-Christmas sales period, which is in line with last year’s result and up more than 11% on pre-pandemic conditions.
Mr Zahra said a lot of that will be spent in actual shops.
“We’re seeing a lot of pent-up demand with people returning to the shops in droves and supporting their local businesses,” he said.
“It’s great to see. Retailers are feeling upbeat and optimistic after a dire few months during the lockdowns.”
But Mr Zahra did sound a note of caution for CBD retailers.
“Customers are still shopping locally, and we believe this trend will remain for some time,” he said.
“We remain concerned about CBD retailers with the absence of international visitors and students as well as workers continuing to prefer to work from home.”
More Aussies shopping locally
Still, those retailers with a bricks and mortar presence are the most likely to capitalise on any reluctance by stay-at-home consumers to head into the shops in person.
Data released by Monash Business School’s Australian Consumer and Retail Studies shows 64% of Australians who shopped online over the past three months did so on the websites of retailers with actual shops as opposed to online-only businesses.
It was part of a trend that saw e-commerce hit record levels in September. While overall retail volumes fell a record 4.4%, reflecting the prolonged lockdowns in Sydney and Melbourne, shoppers went online instead, spending a record $4.3 billion online in September, according to the Australian Bureau of Statistics.
The pendulum is set to swing back, however.
As the double-dose vaccination rate across the country reaches 86%, with some states reaching over 90% and restrictions ease further in time for Christmas, the Monash Business School research shows 50% of shoppers expect to use physical stores as their main go-to for retail purchases in the future, although this is down from pre-COVID levels (68%).
Importantly, the research found having a physical store and the ability to see, touch and test goods was ranked the most influential source on purchase decisions.