Blogs & Insights

Australian Retail Recovery

The effects of restrictions easing, plus the injection this month of the second round of stimulus payments and early access to superannuation, has seen Australian consumers go on a spending spree.

According to the Australian Prudential Regulatory Authority, in the week to July 12, nearly 600,000 people withdrew up to $10,000 from their super, totalling $6.2 billion. Coupled with around 5 million people receiving their $750 stimulus payments from July 13, economic advisory company AlphaBeta found that spending was up 17% compared to pre-pandemic levels.

“It’s pretty mind-blowing how quickly people were able to get the money and spend it,” said AlphaBeta director Dr Andrew Charlton. “It was nearly $3000 spent in a couple of weeks. For most people it was normal shopping but amped up… The superannuation is the real sleeper here, I don’t think anyone had any idea how significant the impact was going to be.”

The effects of lockdowns was highlighted by Victorian spending being 15% below other states, raising fears of what could happen if further restrictions are required in New South Wales or other states due to a second wave of coronavirus infections.

Dr Charlton warned that we may not have yet weathered the storm, and spending levels may fall once the super money has washed through businesses, and government programs and support is reduced. 

Fortunately for businesses, the government announced this week that support via the JobKeeper and JobSeeker programs will be extended for an additional six months until March, covering the crucial Christmas trading period, though at a reduced rate. Currently, 3.5 million workers receive the JobKeeper wage subsidy, while over 1.5 million are on JobSeeker.

The boost in retail spending continues the recovery that began in May. Data for that period, released by the Australian Bureau of Statistics this month, showed a 16.9% increase in overall retail turnover from April to May, and a year-on-year increase of 5.8%. This follows a fall of 17.7% in April and a rise of 8.5% in March.

CEO of the Australian Retailers Association, Paul Zahra, was also cautious about the extent of the recovery due to economic indicators such as the unemployment rate. “Though most shops have reopened, retailers are facing significant financial challenges due to interruptions or loss of revenue, the cost of additional hygiene protocols, and reduced foot traffic,” he said. 

“It’s pleasing to see online shopping playing a vital role during these unprecedented times as Australians embrace convenience with sales growing 13.6% year on year.”

Once famously derided by retail icon Gerry Harvey as “a complete con”, online retail now accounts for 10% of all retail spending in Australia. “What we’ve been seeing for a number of months now is an incremental step change in the way people shop,” Ruslan Kogan, founder of Kogan.com, told The Sydney Morning Herald. “And once [customers] start shopping online, I don’t think they’re ever going back to a store.”

Kogan’s business is now valued at $1.75 billion (more than Myer and David Jones combined), has seen its share price increase by over 120% in the past three months, and has doubled its sales in the last quarter. A major investor is Wilson Asset Management. Portfolio manager Tobias Yao says, “We’re strong believers that pure online retailers can continue to take market share away from traditional, bricks and mortar retailers.”

“When we first invested in the e-commerce space we recognised that Australia really lagged behind the US and UK for total online retail penetration, and we thought we would see the same seismic shift here in Australia over time.”

That shift is here, amplified by Covid-19. Increasing the opportunity for all retailers, big and small, to maximise their online eCommerce business.

Online is expected to double to 20% of retail sales over the next five to ten years, making it a $50 billion industry. “What we’ve said will happen, is starting to happen,” adds Kogan, “but Australia still has a long way to go. What we’re seeing is just the beginning.”

Whether your business is an established brick and mortar with eCommerce or your retail business is eCommerce led, now is the time to ensure you are fully putting your strategy and execution in place. In a recent talk, Playhouse’s CEO, Luke Goldsworthy, stated: “Christmas trade is fast approaching and therefore time to validate your eCommerce execution is being reduced daily.”

Now is the time to make sure you are online ready.

Get in touch with our team and we can talk to you about this or any eCommerce questions you may have.

Embracing Reviews

Online reviews are an important factor in a customer’s decision to purchase. ReviewTrackers reported last month that 92.4% of customers use them to guide the majority of their ordinary purchasing decisions, 40% of online customers use social networks to research new products and brands, and 94% of people avoided a business due to a negative review.

These statistics demonstrate how important it is to have a strategy to generate and interact with online reviews.

Reviews generally appear on your own website, usually an integrated platform, on social media or on a dedicated review platform like Google or Product Review.

There are two major reasons reviews from your customers are so crucial to the success of your business. Firstly, neutral or negative reviews give you an understanding and the possibility to develop a better understanding of your service and products. You can have that real feedback from your customers where you may be failing to meet customer needs and create a better path, with fewer roadblocks, for your customer journey like we discussed in a recent blog on common roadblocks in Checkout.

The second reason is the opportunity to reach out to potential customers, but using positive reviews and feedback as customer testimonials. It is much more likely – over 90% – that a customer will purchase after reading a positive review.

Getting Customers to Write Reviews

Retailers can be reluctant to ask their customers to take the time to write a review, knowing that asking too much of them can spoil their experience with the brand and hinder repeat business. But reviews are a special case. People love to share their opinions, and with an average length of just 200 characters, it doesn’t have to be an imposition.

If you are using a quality review platform integrated with your website (see list below), make sure it is mobile-friendly. As we have reviewed previously in the power of mobile experience, the ability for the customer to use your mobile-friendly site allows for reviews to be posted at more convenient times.

Depending on your business there are a variety of methods for gathering reviews. These range from the best-case scenario, where you receive unsolicited praise and immediately ask the customer if they would mind putting that in a review, to emails to existing customers, to requesting a review as part of the post-purchase checkout procedure. For B2B, your partners will understand the value of reviews and you can review each other. 

Make it easy for your customers by providing links to where they can write their reviews, most importantly including Google and Facebook, which now account for 76% of all online reviews. Yelp and Amazon may also be important depending on the nature of your store.

Whichever way you get your customers to provide a review, get them to focus the feedback they provide. The top three things people look for in a review are product performance, purchaser satisfaction, and product quality. It’s also worth noting that 28% of customers are likely to leave a review after a positive experience, while 34% will after a negative experience.

Once a customer has left a review, especially if it is negative, do not ignore it. Only 36.7% of consumers receive a response to their review, yet 53.3% of customers expect a response within a week. Replying to reviews can turn positives into repeat business, and negatives into positives.  

Dealing with Positive Reviews

Don’t let a positive review go to waste. Share them on your social media channels to help build positive momentum amongst your customers, and encouraging them to also contribute positive reviews. For example, this could mean posting to your Facebook page, or formatting as a quote and putting it up on Instagram.

On sites such as Google, Yelp and TripAdvisor, you can also mark positive reviews as helpful, which has the effect of moving them further up the pecking order so that they are more frequently read.

Crucially, respond to every review. Thank the customer for taking time to offer feedback, and invite them to return to your site to check out whatever is your latest marketing priority. If you’ve got a promotion happening, let them know. Not only is responding the polite thing to do, but it can also help your SEO ranking, so ensuring you use your business name and keywords in your response is a must. 

Dealing with Negative Reviews

Responding to negative reviews is more difficult than positive ones, but you must do it! If you respond to a one or two-star review within 24 hours, there’s a 33% likelihood that the reviewer will update their review and increase their rating. 

This is not an opportunity to establish that you were right and the reviewer was wrong. This is a time to check your ego, thank the reviewer for their feedback, and to provide an avenue to address their concerns.

Responding to negative reviews isn’t just about addressing the concerns of the writer, but is also your opportunity to demonstrate the character of your business to anyone reading the review. Potential customers are 44.6% more likely to visit a local business if it responds to negative reviews.

In your response acknowledge and apologise for their negative experience, tell them that you take pride in having an excellent reputation for the specific goods and services you provide, give details so that you can take the conversation offline, and keep it short and simple. It is best not to use your business name or keywords in your response to negative reviews. Remember SEO?

Here at The Playhouse Group, we are now helping retailers and businesses integrate and educate on platforms like Livechat. Part of the best practice of reviews and feedback is making it as real-time as possible. We will talk about these types of options at a later time. 

In short, all reviews are important and generating and responding to them must be part of any eCommerce strategy.   

A leading review platform, Trustpilot, states, “that behind every review is an experience that matters.”

Here are some common review sites and platforms: Bazaarvoice, Turnto, Livechat, Trustpilot, Trustspot, Amazon Customer Reviews, Choice, TripAdvisor, Yelp, Google My Business, Yahoo! Local Listings, Facebook Ratings and Reviews, Twitter…

And of course, Your Own Website.

Need help finding a Ratings and Review platform to integrate with your store? We have worked with the likes of Smile.io, BazaarVoice and TrustPilot and can help you make an informed decision in regards to your next platform purchase. Why not book a free 30min consultation with specialist Peter Krideras now. 

Get in touch with our team and we can talk to you about this or any eCommerce questions you may have.

eCommerce Metrics for Startups

During a pandemic is a difficult time to be an eCommerce startup. In normal circumstances, a new business can assess its viability by looking at the bottom line, but with the economy currently on the rocks, it is particularly important to look at broader metrics to measure a website’s performance.

Put simply, a metric is just a quantifiable and consistently defined measurement. They help businesses make decisions to ultimately maximise their profitability. They can include everything from conversion rate to the average order value to cart abandonment rate to reach.

This week we are looking at three top metrics for eCommerce startups.

Checkout Abandonment Rate

Last month we looked at What checkout practices are you using? because staggeringly 68% of people abandon their shopping cart online. This number must be reduced and converted to sales. Factors that lead to abandonment are hidden costs, such as unexpected shipping expenses, followed by unnecessarily cumbersome registration requirements, a lack of trust in the website, and insufficient payment or delivery options. 

By tracking the checkout abandonment rate you can see if this is a problem, and take action. Considerations for reducing this rate are: displaying full shipping costs as early as possible and even offering free shipping; allowing guest login purchases; displaying your site’s security credentials to build trust; making the checkout experience with a clean design and idiot proof; and including product reviews and upsell recommendations.

Conversion Rate

If we hadn’t just written a blog about checkouts, this would have been the first metric listed. This is what really matters: how many of your visitors are you able to convert into customers. This is the metric site managers and owners want to know. 

The Adobe Digital Index 2020 report gives an indication of the conversion rates that can be expected by different sectors. The overall average is 3%, while gifts (4.9%), health & pharmacy (4.6%), apparel & footwear (4.2%) lead the charge. The laggards are consumer electronics (1.4%), DIY & tools (1.7%) and automotive (2.2%).

Last November Episerver provided insight on conversion rates by traffic source. Unsurprisingly conversion rates were higher where customers had higher intent. The conversion rates it found were: paid search (2.9%), organic search (2.8%), referral (2.6%), email (2.3%), direct (2.0%), social (1.0%) and display (0.7%).

To achieve Conversion Rate Optimisation it is important to consider your sales funnel, the visitor behaviour on site, page views and exit pages. Think about the journey your customer goes on from first becoming aware of your product until reaching the checkout. Are there obstacles to remove? Could this process be made smoother? 

Cost per Acquisition

One of the key challenges facing a startup is figuring out which approach to online marketing will be most successful. As a result, most try a little bit of everything. With your resources already likely stretched thin by just getting your business running, it is crucial to quickly and efficiently access your campaigns to decide which are the best to pursue further. This is where the cost per acquisition is so valuable.

As the name suggests, this metric is simply the campaign cost divided by the number of acquisitions as a result of it. It is important to monitor your CPA data over time so that you can first separate the performing campaigns from those that are best discontinued, and then also so you can track improvements in campaigns you are continuing with.

Often small changes to an ad can have a significant impact on its success, so consider A/B testing with tweaks to the copy, imagining or the call to action, then compare the CPA to refine ongoing efforts. Additionally, the CPA can be improved by segmenting campaigns to target specific groups of potential customers rather than blanket campaigns.

Assessing CPA must also give some consideration to the average order value. A CPA of $25 is fine if your AOV is $100 – not so much if it’s $30.

There are many more metrics that you can consider, such as retention rate, reach, refund and return rate, best-performing products and categories, and average profit margin. We’ve suggested these few as key considerations for startups, but even if you’re an established eCommerce business it’s worth taking a moment to consider which metrics you should focus on to help your business develop.

Get in touch with our team and we can talk to you about this or any eCommerce questions you may have.

Highlights from FY20

Another financial year has come to a close in Australia, but this has been one like no other in living memory – providing threats and opportunities for the future.

In terms of health, even the conservative data from Johns Hopkins reveals over 10 million coronavirus infections worldwide, and 500,000 deaths – with the pandemic certain to be the worst humanitarian disaster since the Second World War. Fortunately, Australia has been spared the full effects of the virus.

In terms of the economy, the world has slumped into recession. In Australia, it contracted by 0.3% in the March quarter, with the Reserve Bank of Australia expecting GDP to fall by 8% for this financial year. This is certain to be the worst economic disaster since the Great Depression. Fortunately, the Australian economy is doing better than originally feared, though RBA deputy governor Guy Debelle warned yesterday that government and interest rate support will be needed for years to address the financial scars of Covid-19.

In these bleak times, however, changes in behaviour are providing opportunities for businesses. In short, the coronavirus has accelerated the adoption of life online and the use of digital. Here are the top trends that can put a positive spin on a negative 12 months: 

Growth in online sales

IBISWorld’s latest analysis for online shopping in Australia reported: “Revenue for the Online Shopping industry is anticipated to rise by 11.1% compared with a previous anticipated 2.4% increase in the current year due to consumers increasingly shifting shopping activity online, including for necessities such as groceries.”

The Playhouse Group’s clients are already seeing significant growth from their online presence in food/grocery, liquor, furniture, fashion, music, entertainment, pharmaceutical, rental and consumer electronics.

This trend accelerated what we had already seen over the past five years, with rapid growth in internet and broadband penetration and consumer faith in eCommerce resulting in an annualised growth of 15.4% over the five years to 2019-20. Currently, over 60,000 businesses contribute to the $29 billion markets.

Working from home

Australia entered lockdown in March, with workers forced to work from home where possible… and we’ve gotten used to it. Saving time on travel, enjoying flexible working hours, and being able to look after children and pets, are just some of the reasons why it’s been embraced and will likely stay with us at least to some extent once the crisis is averted.

Bosses have also discovered how much work can be done outside the office, and that workers can be trusted to do it. This can reduce overheads for your company, and increase the job satisfaction and productivity of the worker.

The Australia Institute estimates that three out of 10 workers in Australia can do their jobs at home. “It is likely that much of the increase in at-home work will become permanent,” said Institute director Jim Stanford, “even after the immediate health emergency passes.”

To facilitate working from home, previously little-known software such as Zoom has now become so ubiquitous grandmothers are even using it to catch up. Between December and April, Zoom’s daily meetings increased from 10 million to 300 million. Microsoft is hosting 200 million meetings a day, while Google Meet is adding over three million new users a day. Slack and Trello have also seen usage increase.

Online education

Much like working from home, education also left the classroom and exposed students at all levels to remote possibilities. As we posted at the start of the Australian lockdown, this placed a focus on Learning Management Systems as both educational institutions and businesses implemented their training online.

For The Playhouse Group’s clients, a LMS can deliver employee training, employee orientation, knowledge retention, and general education. The main advantage for business is that employees can access materials when they want, from where they want, and at the pace they want. Additionally, once courses are set up on the platform there is no marginal cost for employees taking them. These factors keep productivity up and cost down.

We have seen that LMS has been used across a lot of different sectors, GP/Health Training to Schools to retailers.  And not just for training but for ensuring the right information is accessed and as a repository of policies and procedures.


In a recent media release from Australia’s Department of Health, more than 4.3 million health and medical services have been delivered to a total of more than three million patients through the telehealth Medicare items introduced by the Australian Government for the COVID-19 pandemic.

The telehealth arrangements have been put in place as a measure to ensure safety for patients and practitioners during the COVID-19 pandemic.

Integrations and set-up of systems, like Zoom & Billing Systems, to allow our clients to have as seamless as a possible process with their patients is a necessity for telehealth.

Digital literacy

The adoption of each of these above trends have fed into and are a result of growing digital literacy. With offline alternatives removed, people have discovered that their online alternatives are often as good if not better, and are cheaper, more flexible, and more accessible. Forced to embrace the technology, for many fear of it has now disappeared.

In addition to using the internet for shopping, work, health and education, it has become central to entertainment and even socialising during the outbreak. Australia’s National Broadcast Network reported a 70-80% increase in data usage on its network from February to March. During this time Netflix doubled its expected growth, adding nearly 16 million new subscribers in the first quarter of 2020 alone. Even the number one album on the Australia Recording Industry Association charts at the moment is Music from the Home Front – a compilation of songs from a virtual concert in April.

This financial year has dealt a blow to nearly all businesses, but during it, we have also seen an acceleration of the move online. 

Now is the time to make sure that your business is ready to take advantage of new consumer behaviour to ensure this next financial year is much better than the last.

There are really exciting times ahead with the growth of online and the increasing connections with clients and customers alike.

Get in touch with our team and we can talk to you about this or any eCommerce questions you may have.

What checkout practices are you using?

For your eCommerce business to maximise its conversion of clicks into sales, it is essential to remove customer barriers to purchase. Common issues include poor site design, slow site speed, and a lack of trust in your website.

The most significant hurdles more often arise during the checkout process, wasting a golden opportunity where your potential customer has already decided what they want and that they want it now, only to not follow through due to avoidable issues. So this week, we’re examining the best eCommerce checkout practices for 2020. Here are three key areas in which you can improve the checkout experience for your customers.

Avoid Mandatory Registration

It can be tempting to want customers to register with your website, data is golden, but at the checkout is not the time to push it. Forcing customers to sign up before they can complete transactions may lose you sales. Not only are some customers reluctant to provide more details than necessary to complete the purchase, the process of registration, email confirmation, and sign-in slows and complicates the checkout experience. This frequently leads to customers giving up and not completing their purchase.

The greatest exception to this rule is provided by Amazon, who developed 1-Click ordering. The game-changing technology allowed Amazon to establish itself in the market, providing customers with a good reason to give over their data and permission to charge them. With the expiry of its patent over the technology in 2017, this could be an option for your site, though few (if any) sites carry the clout of Amazon, so for many customers on many sites, even this registration process would provide a hurdle to sales. For those interested, upon the expiry of the Amazon patent, The Playhouse Group’s partner, Magento, launched its own version called ‘Instant Purchase’.

Some of the best eCommerce sites now allow a guest checkout option. This addresses customer concerns and also helps reduce the steps to purchase to the desired maximum of five. If registration is necessary, avoid long forms and allow users to sign in via a social media account. Even offer customers to fill more ‘about me’ information at a later date.  Maybe through a follow-up email with a: “Thank you for your purchase. To celebrate your recent order, provide more information about yourself for a 10% discount on your next purchase.” Reward the loyalty of the customer.

Allow Multiple Payment Currencies and Methods

A majority of online purchases occur across international borders, and customers may not proceed with a purchase if it cannot be completed in their own currency. According to Statista last year, 13% of online shoppers abandoned a site when prices were presented in a foreign currency.

Accepting multiple currencies addresses this risk, while also eliminating potentially expensive foreign transaction fees for your customers, and providing greater transparency on how much the customer is being charged, preventing confusion and surprise.

Additionally, it is important to offer a variety of payment methods, such as PayPal, Afterpay, credit cards, debit cards, BPAY, digital wallets like Amazon, AliPay, Apple or Google Pay, or even Bitcoin. Providing multiple payment methods improves the customer experience, engages with younger generations that increasingly don’t rely on traditional payment methods, and demonstrates that your business is keeping up with innovation. Here is a list of preferred payment methods by country, for your reference.

As a side point, it’s valuable to display the logos of the methods you accept on your checkout page to increase customer trust in your store.

Provide Multiple Shipping Options

As we discussed in last week’s blog, Contactless Delivery and Covid-19, the coronavirus pandemic has accelerated the importance of multiple shipping options, particularly ones that provide for contactless delivery during the outbreak. Options include parcel collection point networks, curbside delivery, and Click & Collect.

Delivery cost is also a consideration for the majority of online shoppers, so in addition to methods of delivery, it is beneficial to have various price points, such as free or low-cost standard delivery, reasonably priced Express Post delivery, and more expensive courier options. Provide specific information on the cost and time period associated with each option.

Beyond these considerations, remember that your checkout is a crucial part of the customer’s overall shopping experience with you. If it’s smooth and clean, your customers will have more faith in you as a business. If it’s convoluted and ugly, not so much.

Get in touch with our team and we can talk to you about this or any eCommerce questions you may have.

Contactless Delivery and Covid-19

Consumer behaviour has shifted significantly during the coronavirus pandemic, as outlined in previous Playhouse Group posts. Even as lockdown restrictions ease in Australia, businesses still need to adjust to social distancing, reduced physical contact, and the new norm of the 4 square metre rule. 

Among other areas, this has impacted the delivery of online purchases, with customers choosing to stay at home, order online and have their purchases sent to them – not just to their homes but also alternative delivery addresses.

Parcel collection point networks, such as Australia Post’s 24/7 Parcel Lockers or those from Hubbed, give customers flexibility with their deliveries in addition to providing health benefits for both the customer and the delivery worker. Collection points are available in BP service stations, 7-Eleven stores, and various news agencies and pharmacies.

For Hubbed, the crisis is bringing a boost to its business. “The March 2020 spike is a result of the COVID-19 bricks to clicks phenomenon where consumers are purchasing online rather than in-store,” said founder and CEO David McLean.

“Many small businesses are working overtime to fulfil orders, so it really helps when they can organise dispatch and delivery both after hours and on weekends. Most of the locations within the Hubbed network are queue-free, which makes it a safer option.”

It’s not just parcel delivery that is moving contactless, but even food. Services like Menulog, Deliveroo and UberEats provide the option to leave your order at your door, move away, and then call you to let you know your food has arrived.  And it isn’t just the large delivery companies doing this. Scott Assender, owner of Belles Hot Chicken and Mr Burger has shown the no-contact experience of delivery can be done exceptionally well by small businesses as well.  

“We’ve had 25% of our deliveries select this option. Our customers are showing that there’s a real need and a real want for this,” said Domino’s Australia CEO Nick Knight.

This shift in consumer behaviour is a direct result of Covid-19. A report released in late-April by Accenture found that 64% of respondents feared for their own health, and 82% were fearful for the health of others. Among other findings, 64% were worried about its impact on their personal job security, while 88% were worried about its impact on the economy.

Regardless of what goods your business sells, you will need to evolve your delivery processes to keep up with customer expectations and your competitors. As part of the online shopping experience, at checkout, you should provide your customers with a variety of fulfilment options. These can include more traditional methods such as in-store pickup and standard delivery, or the increasingly popular methods of doorstop pickup or collection points.

Retailers and some clients of The Playhouse Group, such as Bunnings, Dan Murphy’s  and Woolworths, have also evolved the “Click & Collect” option to drive-in pickup. With Google’s drone-delivery business, named Wing, currently soaring during trials in Canberra and Logan, that may be another option before too long too.

Thanks to Covid-19, this Easter was the biggest online shopping weekend in Australian history, eclipsing even Black Friday and Cyber Monday sales. Australian owned, Click Frenzy, has definitely helped drive online sales. The Playhouse Group has assisted a number of retailers in Australia both with their strategy and integration of technologies to take advantage of this acceleration in online retail during the pandemic. But it can be easy in doing this to forget how crucial order fulfilment options are to the shopping experience and to overall satisfaction.

Make sure your company doesn’t make that mistake.

Get in touch with our team and we can talk to you about this or any eCommerce questions you may have.

Chinese consumers emerge from Covid-19

The Economist Intelligence Unit this week released its On the comeback trail? report into Chinese consumption recovery following the coronavirus pandemic. While that market differs from Australia’s, The Playhouse Group feel there is great interest and some overlap with our market for insights to be drawn as we also emerge from the Covid-19 crisis.

The report detailed changes in consumption trends for the first quarter of 2020, retail sales forecasts for the year, the effects of government stimuli, and the shift to online and digital.

Consumption Trends

Consumption expenditure incorporates spending on both services and goods, making it a more accurate reflection of household expenditure compared to retail sales data. Overall, urban consumption expenditure fell by 9.5% year on year for the first quarter of 2020, down from a 7.5% expansion in 2019.

Services consumption, in particular, dropped significantly, led by falls in education, culture and recreation spending (down over 35%), due to restrictions on physical attendance, coupled with movement restrictions and income loss. Clothing, transport and communication, household goods and services, and healthcare also saw 10% or greater contractions.

Two categories saw growth in the period: accommodation, and food, tobacco and alcohol – led by stockpiling early in the outbreak.

In Australia, some of these downturns have been lessened due to the JobKeeper program and boosts to JobSeeker payments. According to CEIC Data, Australia’s consumption expenditure in the first quarter of 2020 was US$181.314 billion. This is down from US$190.052 billion in the December quarter, representing a 4.6% downturn.

The latest figures released by the Australian Bureau of Statistics (ABS) showed a 17.7% plunge in retail sales in April – the steepest monthly fall on record. The following industries fell in seasonally adjusted terms in April 2020: Food retailing (-17.4%), Cafes, restaurants and takeaway food services (-35.4%), Clothing, footwear and personal accessory retailing (-53.6%), Other retailing (-14.4%), Department stores (-14.9%), and Household goods retailing (-0.1%). The May 2020 figures will be released on July 3.

Retail Sales Forecasts

Chinese consumers have a reputation for being highly risk-averse, and with the country facing its worst job market in decades, it is unlikely that consumption is going to be a driver of China’s economic recovery. 

Following a 19% contraction on retail sales in the first quarter of 2020, the EIU predicts that the second quarter will be less than 15% down year on year, with the third quarter only 2-3% down, while the fourth will deliver a 0.1% increase on 2019. Overall, this represents an 8% contraction from 2020.

The Reserve Bank of Australia, in its May Statement of Monetary Policy, stated: “The Australian economy is expected to record a contraction in GDP of around 10 per cent over the first half of 2020; total hours worked are expected to decline by around 20 per cent and the unemployment rate is forecast to rise to around 10 per cent in the June quarter. Headline inflation is expected to be negative in the June quarter largely as a result of lower fuel prices and free child care; underlying inflation is expected to decline notably.

“Beyond the first half of 2020, the outlook for the domestic economy depends on how long social distancing remains in place and its effects on economic activity. Other factors include how long uncertainty and diminished confidence weigh on households’ and businesses’ spending, hiring and investment plans. The initial phase of the recovery is likely to be primarily driven by the easing in restrictions, which will lead to an improvement in employment outcomes as businesses re-open, as well as a pick-up in household spending. In the latter part of the forecast period, business investment decisions will more strongly shape the recovery. It is difficult to be precise about the magnitude and timing of these effects, so it makes sense to think in terms of scenarios.”

Government Stimuli

The Chinese government has promoted the purchase of cars, which makes up the largest share of total retail sales. This includes subsidies for diesel truck upgrades, a reduction on their GST-equivalent for second-hand vehicles, and an extension of new-energy vehicle purchase subsidies. This is unlikely to have a significant impact due to a pre-existing slump in car purchases.

Additionally, several cities have issued digital coupons through online payment platforms, such as Alipay and WeChat Pay. The EIU report states it is difficult to know the success of this measure due to pent-up demand for purchases in the dining, tourism and recreation industries as restrictions ease.

In Australia, only one significant Commonwealth stimulus policy has been announced since the easing of lockdown restrictions, with the $25,000 HomeBuilder scheme. This is very limited but is likely just the first of many packages that seek to resuscitate the economy. 

Various states also have special grants during this time, such as the $10,000 New South Wales small business assistance scheme.

Consumption Shifts Online

The most universally agreed consequence of the coronavirus pandemic has been the acceleration of adoption of life online and the use of digital. For example, in Shanghai first-quarter purchases of fresh food online surged by 167% year on year, while active users increased by 127.5%. Retailers have also sought alternative sales channels through increasingly popular online streaming. Retail trade publication Linkshop found that a single live-stream session can bring as much exposure as six months of foot traffic. Post-pandemic many retail stores will operate primarily as a marketing tool rather than purchase point. 

Everything from grocery shopping to education to entertainment has increased online during the first quarter of 2020. The EIU report found: “For foreign retailers, online customer services need to be strengthened to compete with their Chinese counterparts, as local consumers expect prompt and tailored solutions to cater for their needs.”

IBISWorld’s analysis for Australia reported last month found: “Revenue for the Online Shopping industry is anticipated to rise by 11.1% compared with a previous anticipated 2.4% increase in the current year due to consumers increasingly shifting shopping activity online, including for necessities such as groceries.”

The Playhouse Group’s clients are already seeing significant growth from their online presence in food/grocery, liquor, furniture, fashion, music, entertainment, pharmaceutical, rental and consumer electronics. Customer interaction has also increased via social media significantly. Inquires have mainly been on any restrictions on shopping in-store, shipping times and product availability.

This combined analysis no doubt confirms your own experience during the pandemic. It is difficult to predict the rate at which consumer expenditure will return, but it is certain that it will – and as it does it will be increasingly online.

Get in touch with our team and we can talk to you about this or any eCommerce questions you may have.

The Power of Mobile Experiences During COVID

As the coronavirus pandemic kept us in various levels of isolation, we turned to our smartphones for connecting to the internet – and this despite them being mobile devices and most of us being stuck at home with desktop, laptop and tablet options. 

A study by Statista published last week surveying the first three months of 2020 in the UK, a comparable market to Australia, found that “significantly more people identified smartphones as their most important device for accessing the internet, compared with those that nominated each of the large display formats combined.” Of respondents, 60% named their smartphone, followed by laptop (16%), tablet (12%) and desktop (8%).

Apart from the improved performance of smartphones, there has also been a vast increase in available bandwidth for mobile devices – something that will further pump with the deployment of 5G networks. These factors along with the habitual changes that have occurred during the Covid-19 lockdown have cemented the smartphone as the leading portal to the internet.

These findings are likely confirmed by your own experiences, and demonstrate the acceleration of a trend towards mobile dominance that existed pre-pandemic. Recognising this, it’s increasingly essential that your business has a mobile-optimised online presence. This can be achieved through a native app, a mobile-responsive site, a dedicated mobile site or a Progressive Web Application. Each of these has pros and cons.

Native Mobile App

A mobile app or application is a piece of software downloaded onto a users phone, which performs a limited and specific task usually through a dedicated site. Examples of retail mobile apps are The Home Depot, H&M, Target, Best Buy and Lululemon. They provide a range of features including order tracking, instant checkout, product searches (both online and bricks and mortar), loyalty programs, location-based offers, and general customer information.

The advantages of a native mobile app;

  • speed when using, 
  • potential offline availability, 
  • utilising native mobile features such as its cameras and GPS location.

The downsides are;

  • the ‘app’ must first be downloaded for each device, 
  • it must be constantly maintained,
  • separate codebase
  • additional skilled resources required internally or engaging a 3rd party.
  • new features or any update, the customer must download
  • they are platform-specific therefore, limited to the specific mobile devices.

Mobile-Responsive Site

A mobile-responsive website dynamically adjusts and is optimised by the screen size, orientation and platform, and to adjust the site layout to suit. 

Examples of mobile-responsive retail websites are:

  • Kingliving.com.au (Created by Playhouse Group)
  • radio-rentals.com.au (Created by Playhouse Group)
  • hickoryfarms.com, Garmin, magazines.com, and thegrommet.com. 

These sites immediately adjust to the customer’s device, and provide fast and clean navigation, with minimal scrolling or resizing.  This demonstrates why platforms like Magento combined with great UI/UX, matter.

The advantages of mobile-responsive websites are;

  • relatively low cost, 
  • content can be used across all platforms,
  • maintain consistency across all devices and platforms,
  • have a single URL for access.
  • a single code base, product catalogue and 
  • a CMS that runs across mobile, tablet and desktop

The downsides can be;

  • is that they do not always provide a mobile-specific interface.  

However, with the powerful Magento platform, the performance can very much deal with and potentially overcome any hesitation to Mobile experience for eCommerce.

Playhouse sees this mobile experience as the ‘must-have’ for any business, big or small, eCommerce or not.  Most clients go this path first mainly because it is being built in conjunction with the client’s main web pages.  A big cost and time-saving.

Dedicated Mobile Site

A dedicated mobile website is a second, separate website, which presents content specifically for mobile devices. When a customer seeks to access a URL from a mobile device, it automatically redirects to the mobile version, usually with an m.dot prefix. 

The advantages are small compared to others. 

  • dedicated mobile websites are that content is tailored to mobile devices,
  • can be fast, and 
  • they can be quick and cheap to launch if there is already an existing primary website.

The disadvantages, however;

  • having multiple URLs can impact SEO performance, 
  • often require redirection which slows access, and 
  • they are extra work and costs because both websites need to be maintained.

Progressive Web Apps (PWA)

An emerging and real solid option is Progressive Web Apps (PWA), which draw together the advantages of a mobile and a dedicated website. 

The advantages of PWA include:

  • Fast 

By enabling background processing, which accelerates page load time tremendously, PWA’s deliver a much faster experience. On a mobile device, even a 1-second delay can increase the bounce rate by almost 50% and decrease conversion by 20%.

  • Integration

PWAs integrate more tightly with native hardware than regular web sites which makes them feel more like a native app from a user experience perspective – seamless and integrated.

  • Reliability

Caching your content means faster performance, but also making your site available online and offline when you have a limited network or wifi connectivity. 

  • Customer Engagement

A faster and more reliable experience drives user engagement.  The more engaged a user is the more likely they are to buy and be retained as a customer.  PWA’s also have the ability to send push notifications, helping to drive ongoing engagement with the experience.

Playhouse ranks for the ability of, speed to market, costs and usability, both for customers and for maintenance of the mobile experience by our clients;

  1. Mobile Responsive
  2. PWA
  3. Native App

Playhouse recommends only doing a Mobile Site as a last resort and avoid if possible mainly because of the customer experience. 

It is a very common question we are asked when doing website build and rebuilds/ re-platform projects, “do we do an App” and they’re good reasons not to over-invest in an App before understanding what is best for your business and most importantly your customers.

Mobile responsive and Progressive Web App are more times than not, the best option for any business.

We’ve dedicated a blog post to discussing PWAs, which you can read here. 

Not quite clear on which option is best for you, click the button below to set up a no-obligation appointment, or drop an email to our team.

Get in touch with our team and we can talk to you about this or any eCommerce questions you may have.

Social Distancing and Social Media

While the heaviest restrictions imposed at the height of the coronavirus pandemic are beginning to be lifted in Australia, social distancing will linger much longer. People are social creatures but the dangers of physical contact have accelerated life in the virtual world. Over the past few months, we’ve thrived on working from home, video meetings, eCommerce, home delivery, streaming entertainment… and more than ever social media.

The safety of a vaccine could be over a year away, and even then the convenience of our increasingly digitally-augmented lives is likely to stop a complete return to the pre-COVID-19 days and ways. In this new world, it is more important than ever that businesses know how to effectively utilise social media to portray their brand and stay connected with their customers. The decisions you make now will significantly impact how well your business is able to get back to speed with the re-opening.

We’ve discussed in previous posts the importance of using this downtime to be eCommerce ready for the looming economic revival, today we want to focus on your communication with your customers.

Kantar, the world’s leading data, insights and consulting company, surveyed 45,000 consumers across 30 markets in mid-March about their attitudes, media habits and expectations during the outbreak. It found that web browsing had increased by 70% and social media engagement by 63%. Social media usage has increased across every generation. The number of those logging on to a social media platform on a daily basis has grown by 27% for Gen Z, 30% for millennials, 29% for Gen X, and 15% for Baby Boomers.

Kantar estimated that brands that fail to maintain communication with their customers could see up to a 39% reduction in brand awareness, which would delay their recovery. It’s not just important to stay in contact with your customers though, but also to say the right things.

The survey provided valuable information on consumer expectations of brands. They want them to take care of their employees’ health (78%) and implement flexible working conditions (62%). Their advertising should “talk about how the brand is helpful in the new everyday life” (77%), “inform about their efforts to face the situation” (75%), and “offer a reassuring tone’” (70%). Also to be avoided, advertising “should not exploit coronavirus situation to promote the brand” (75%) and “should avoid humorous tones” (40%).

When communicating, keep the following in mind:

Meet your customers where they are

Social media engagement has skyrocketed, and your customers aren’t just on Facebook anymore. It must be complemented by Instagram as a core part of your customer engagement and sales strategy. This is even more so as of last week, now that they are able to buy products directly from a business’ Facebook page or Instagram profile. But social media is not just about sales. Platforms such as YouTube provide an excellent avenue for businesses to demonstrate their expertise with informative videos for potential customers. 

Be compassionate

Australia’s response to the crisis is a global success story, though as much a result of our isolation as our good management. Despite this, many have lost jobs or seen their income reduced. Additionally, we’ve all been subjected to isolation and the stresses of an uncertain future. On the upside, it is no longer insincere to ask someone if they are ok. Don’t forget to keep your customers’ welfare in front of mind. Keep communications positive and reassuring. We will get through this, and the better shape we are all in, the faster the economy can recover, and the happier life will be for both you and your customers.

We are here to help you help them.

Get in touch with our team and we can talk to you about this or any eCommerce questions you may have.

Comparing online selling platforms

If you ever had any doubts, the effects of the coronavirus outbreak will have convinced you of the need to make your products available online. Now that you’ve made that decision, you need to consider which eCommerce platform is right for your business. There are several options, but the three major contenders are Shopify, BigCommerce and Magento.

Shopify is a simple and cheap way to give you the basic features you need to take your retail business online. You can integrate your in-person Point-of-Sale business with sales through your website, social media channels, and on online marketplaces. It comes with built-in marketing and product management tools to meet the needs of a new small business. Built on a Software as a Service (SaaS) platform, it is cloud-based and centrally hosted, and carries the key advantages of accessibility, compatibility and operational management. It is fast, and its subscription model is affordable and reduces upfront costs.

BigCommerce aims to bring the capabilities of an enterprise solution without significant cost or complexity. Like Shopify it is also built on a SaaS platform, but has more tools to assist you to build, innovate and grow your online retail business. It has a level of flexibility and extensibility that just doesn’t occur with Shopify, though it does share its simplicity of set-up. Unlike the drag-and-drop Shopify, BigCommerce has several pre-built plug-ins to frontend CMS and DXP systems like WordPress, Bloomreach and Drupal.

Magento is the world’s leading eCommerce platform, handling over $100 billion in retail sales annually. It is the only platform that gives you the power to create unique and engaging shopping experiences. In addition to a broad array of out-of-the-box features, there is a vast marketplace of third-party extensions that are available for incorporation into your site – and all of these are customisable to an extent unrivalled on other platforms. Having started as an open source platform, it has been developed and honed over years by countless contributors, explaining its robustness and unparalleled capabilities. Magento sites can be hosted on-site, by third parties, or cloud-based – unlike its competitors. Only it can offer the highest levels of security.

Important features of Magento include:

– facilitating flawless brand interactions, giving customers a personalised experience delivering them smoothly along a path to purchase

– providing an omnichannel experience for customers that brings your goods and services to them wherever, whenever, and however that wish to shop

– allows for data driven commerce, with the efficiency, automation and access to data required to compete in the modern landscape

– being the most powerful platform, it enables businesses and their customers to engage with confidence, providing high performance, security and innovation

Put simply, these three platforms operate on a spectrum from low cost with limited functionality to high cost with unlimited functionality. 

Magento packs the heaviest punch, though it is the more expensive platform option and does represent an upfront cost to launch. At Playhouse we believe in Magento, possibly as a reflection of the calibre of clients we work with. Accordingly, we are a certified Magento Solutions Partner. 

Despite our love of Magento, we understand that the cost to launch is an important consideration for businesses, so we have developed a basic core option that can get your business online quickly and affordably, but still maintains the power of Magento and the option to upscale and take full advantage of its near-limitless scope.

With decades of experience and as a certified Magento partner, Playhouse can help your business maximise its online sales capabilities. Get in touch with our team and we can talk to you about this or any other other eCommerce questions you may have.