Latest Colliers International report shows Bricks and Mortar is here to stay
The report, which looks at retail trends in Australia and globally for the first half of 2019, has found that Australian consumers spent nearly $305 billion at physical stores in the 12 months to March 2019, which is 20 times more than the amount spent on online shopping. Nine out of ten of the most visited Australian shopping websites in 2018 belong to traditional brick-and-mortar retailers.
“Retail spending online has slowed, and the fear of a brick and mortar retail apocalypse has been largely over-exaggerated; retail sales through physical shopping channels still account for over 94% of the total commerce activity in Australia,” said Michael Bate, Head of Retail at Colliers International.
“Over the past 12 months to March 2019, retail sales in Australia have jumped by 3.1% which is the fastest pace of growth we have seen since August 2017.”
Colliers report found that while online retailing continues to grow, its momentum has moderated over the past 12 months, to 5.0 per cent YoY in March 2019, which is remarkably slower than the corresponding figure of 15.2 per cent a year ago (NAB).
Alex Pham, Director, Research at Colliers International said “Numerous case studies have indicated that online and offline retailing in Australia are complementary, with an overwhelming number of 78% of Australian consumers continuing to shop both online and offline simultaneously according to Rakuten Marketing.”
“Major e-commerce retailers have also realised the tremendous benefit of having a physical presence and are making the leap from clicks to bricks, with Amazon being one example of this.”
“The global online retail giant has been rolling out a chain of convenience stores called Amazon Go across the United States, featuring the latest retail technologies, including; biometric recognition, sensors and deep learning algorithms to assist and automate much of the purchasing process. We believe these trends will soon catch up with the rest of the world and particularly Australia over the coming years.”
The ongoing tourism boom in Australia’s capital city continues to drive the growth of luxury retailers, with harbourside city Sydney holding the title as Australia’s most popular destination for cashed-up tourists. Over the 2018 calendar, Sydney has received nearly 4.1 million international visitors, who spent a total of $9.7 billion last year, up 4.9 per cent YoY.
“The rise of affluent travellers, particularly from the Asia Pacific region, has provided significant support for the luxury retailing industry in Australia,” Michael Bate said.
“Luxury retail sales nationally have been rising by 9.1 per cent each year over the last 5 years (2014-19) with this growth forecast to exceed 7.0 per cent over the next five years.”