Looking at specific brands, businesses with strong online sales before the pandemic were able to grow online sales more than others. Fast movers that took the risk years ago were rewarded.
Given in-store sales accounted for more than 90 per cent of all clothing sales before the pandemic, the growth in online wasn’t enough to offset an overall decline.
It has undoubtedly been tough, with wafer-thin margins for some, but being digitally enabled has softened the blow.
The change won’t stop when the pandemic does. McKinsey & Company says 40 per cent to 60 per cent of consumers who said they had turned to digital products and services through the crisis were now converts.
How they pay for those products and services will also change, offering another opportunity for adaptable businesses to get ahead.
A decrease in physical transactions and concerns of contaminated money will likely accelerate the long-running decline in cash and other physical payment methods. Physical payment is a method which has already declined from 62 per cent of Australia’s total payments to just 27 per cent in the last 10 years, according to data from the Reserve Bank of Australia.
Australia’s high adoption of contactless payments has been a real boon in this regard. For years Australia has been among the world leaders in this space, with as high as 92 per cent of face-to-face VISA transactions in Australia done through contactless means in some months.
During the crisis, the Australian Payments Industry temporarily increased the PIN limit from $A100 to $A200 to further reduce the number of people who had to touch pin pads, likely accelerating the decline of cash. The businesses which had embraced this technology benefitted. The rest were left behind.
The domino effects of embracing digital are many. While the businesses that moved before the crisis benefitted, for those still waiting, the best time to do so is now.
Leigh Mahoney is Head of Wholesale Digital at ANZ Institutional
This article was originally published on ANZ’s Institutional website