Rising energy costs are also expected to eat into household budgets in the following years, which may have an effect on retail spending. Offsetting those headwinds is the likelihood of a higher Australian dollar, which would prove to be a major tailwind for retailers.
Another concern – and one perhaps not acknowledged as much as the others – is the notion of ‘peak stuff’. A peculiar idea at first, the peak stuff theory is the idea consumers can – and have - reached the limit of possessions they want to own and instead will look to invest in experiences.
It’s an idea supported by data suggesting people value experiences over things, according to Forbes. It has dire implications for the retail sector.
For retailers, the situation is pretty simple. Offline is going online – except for when online goes offline, like Alibaba’s storefronts. And everyone – everyone – is going mobile.
Distribution models are changing, with manufacturers and brands now doubling as retailers. And data is changing the game for everyone.
Businesses which hope to thrive must stay on top – or ahead = of these trends.
Mark Ganz is Director Client Insights at ANZ
Phil Ruthven of Ibis World contributed data and analysis for this article