Consumer retail has been on a bit of a rollercoaster over the past few years. There have been the highs of lower interest rates, low unemployment and high disposable income; and the lows of the global financial crisis, credit crunch, and reluctance of consumers to spend in uncertain economic conditions. On average, the sector grew about half of one percent year on year since 2005. However industry analysts expect growth to increase four-fold to around the 2%, year on year.
Underpinning this is the resiliency of the Australian economy and strong trade forecasts for the foreseeable future. However there is still risk – primarily in the form of inflationary pressures and the inevitable interest rate rises that follow. A resurgent Australian dollar also threatens local consumer retail businesses as price competition from the international market increases.
To remain competitive in this industry and successful over the long term, businesses in this industry should:
- Re-assess their product range and determine if they are carrying the most profitable mix. A product matrix that identifies ‘cash cows’ ‘growth items’ and ‘dogs’ will assist this process.
- Review stock control processes and ensure that back-end stock management processes are kept to a minimum in order to increase margins.
- Analyse competitors – both direct and indirect. The competitive landscape in consumer retail goods is changing dramatically. More and more share of wallet is being spent overseas. Be sure you understand clearly what consumers are being offered and effectively position the benefits of buying locally.
- Evaluate your staff. One of the most effective ways to differentiate yourself is through high-level customer service strategies. Undertake cost/benefit analysis and training to ensure you have a unique offering to bring to market for consumer goods that can be purchased through a wide variety of channels.
* If you need a business plan for a consumer retail business, and would like in depth market research, find out more about our market research service.