Customer knowledge to help offset online retail competition.
Traditional food retailers will have to step up their customer knowledge and destination focus to compete against the speed and choice being offered to consumers by online retailers and home delivered meals.
That was the message to Perth retailers and landlords at a Colliers International retail food presentation who were also told to pay special attention to the market-shaping influence of millennials.
“Millennials now make up a quarter of WA’s population and 37 per cent of workers so they are a big market with a special interest in food and eating out that you need to pay attention to,” said Colliers International Research Manager Misha White.
“They’re technologically savvy, interested in fitness and healthy food but they’re also a diverse group and although 80 per cent were born in Australia, one in five speaks another language.
“They also have money, with an average income of $71,000 and household income of $94,000 and in the next five years they will account for growth of $6.1 billion in the retail sector.
While the retail sector was still weathering a downturn, Ms White said there had been a small but encouraging bounce in consumer spending in cafes, restaurants and food and, compared with other states, spending per capita and weekly full-time earnings were still highest in WA.
“WA’s unemployment is now at 5.5 per cent which is equal to the national unemployment level so that’s also a small green shoot,” she said.
Despite Amazon’s expansion into the US grocery market and its plan to open a retail distribution centre in Australia, restaurants and cafes are hoping their social and entertainment role will help them weather technology-led disruption.
“Amazon already has a strong presence in Australia and knows its customers really well so retailers are wanting to know how they can Amazon-proof themselves,” Ms White said.
“More than ever, retailers need to know who their consumers are and what they want because that will make a difference in what you’re doing. In terms of shopping centres and individual retailers, there needs to be a focus on achieving a whole experience.”
Dome Café Group chief executive Nigel Oakey told the gathering that a better understanding of customers was guiding store sizes and locations with the café chain now leasing much larger spaces than the traditional 75sqm-150sqm sites.
“We are a business that understands that people use us for 16 things, only one of which is eating and drinking and the things that we are valued for are quite different from the things that we sell,” Mr Oakey said.
“We are looking for locations that create sense of community, a place of welcome and comfort and a sense of equality.
“We now see ourselves as being in the community hall business—hence the larger spaces. In sites in neighbourhood centres, like Bassendean, we are on the outside of the centre and can create all day activation.”
NOOD Group founder Nicki Heyder said demand was increasing for healthy, nutritionally balanced food but clear divisions were emerging in the way different age groups want to eat.
“A lot of millennials are visiting Nood Café in Leederville but the recently launched home delivery program is more for the 40 to 60 age bracket who are working long hours and going to the gym but have made their health a priority so they want to eat well and are opting for the home delivery service,” Ms Heyder said.