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Introduction and background information of retailing system in Australia
Section 1: Overview of the major changes and developments in Australia's retailing system
Section 2: Key drivers of the retail format change in Australia
Section 3: Future face of retailing in Australia and alternative retail store options
Conclusion and Recommendations
The concerned study herein concentrated on the diverse tendencies and trends that are involved with the retail industry and the specific actors that are considered valuable for quenching the expectations and demands of the fellow consumers. Furthermore, the concerned study includes various discussions of the different aspects addressing the major changes and drivers that depict a holistic view of the various factors, which influenced the retail industry in Australia.
The industry of retail is characterized by the method of conveying the consumable goods, products and services to the consumer end by sale of the same. The said industry aims to earn revenue through selling intangible goods with the help of stores, groceries, kiosks, department stores, Internet and similar others. The channel of distribution within the retail industry is held highly responsible as delivery of goods with the help of the identification of the demand through a supply chain ensures the degree of profit in the given industry (Wei et al., 2018). The retail industry of Australia involves as much as 1.2 million individuals and about 1,40,000 retail businesses. In the present, among the total employed population of Australia, 10.7% is involved in the retail sector and is regarded as the largest employer industry. This huge involvement of the said industry enable to generate 53 billion dollar revenue that amounts to 4.1% of the total generated GDP of Australia as per evaluation of the last few years. However, the said industry in the recent times has been hindered by some uncertainties and is thereby the growth is said to be slowed down.
The concept of Retail Management is regarded as the particular method that assists consumers to acquire the product that is desired by the concerned form the retail stores. It is the specific concept that plays an important role by evaluating the various aspects of the retail industry and procures sales through positive enhancement of the same (Bailey, 2019). Therefore, the retail management is thus comprised of a cluster of variable techniques and processes included to widen the scope of retail industry and gain a higher rate of customer satisfaction.
As opined by McArthur et al., (2016), the retail industry has been subjected to several dynamic changes in lieu of several posed hindrances, to incorporate several adaptations, which aided in the development and growth of staff deployment and their respective training. The biggest competitor for the retail industry has been the introduction of e-commerce, which compelled the retailing industry to opt for several convenient means to maintain its dominance and persistence in the markets of Australia. The introduction of digital medium in retailing has been one of the most prominent changes that have been incorporated in the respective industry. The effectiveness of the managerial capability for mitigating the posed hindrances of the industry has been the quintessential element for strengthening the brand image in accordance with the customer perspective, the market in which its is established as well as with the point of view of the employees, thus maintaining the retail life cycle (Sutton-Brady et al., 2015). The retail sector has been one of the most effective drivers of employment in Australia. Thereby, the estimation can be made that any distinctive change incorporated in the retail sector of Australia, poses a detailed impact on the quantity of workers associated with the industry over the natural course of time.
Figure 1: Input of retail industry in Australian economy
(Source: Sutton-Brady et al., 2015)
Wheel of retail concept also acknowledges that the growing demand of e-commerce subjected the retail industry to imminent peer pressure thereby compelling the industry to incorporate several significant changes in accordance with the extreme pressure of the market and the changed pattern of demands prevailing in the surrounding environment. The Australian malls and other shopping centres has been subjected to intensified pressure which has duly affected the flow of progress and profitability of the retail industry (You & Barry, 2016). The local communities in Australia are also affected due to the closure of several stores in lieu of the flow of differences prevailing concerning the difference in rendering convenience. It has been identified by Co Australia and McKinsey, the active managing partner of John Lydon, that the generation of effective and adequate returns to the shareholders has been the sole purpose of any concerned business established in Australia. They also added on by saying that it has been the sole concept of business since 30 years. However, in accordance with the demands of the employees, the purpose of any concerned businesses should not only focus on the shareholders but also should bear posed responsibility towards every respective stakeholders. The employee perspective also defines the imminent requirement of contributions, which are mandatory for the effective collateral development of the society.
The rapid transformation of the demands caters its shift to e-commerce, which collateral changes the landscape of growth for the retail industry of Australia. The posed negative impact of e-commerce directly affects the productivity of retail stores (Scollo et al., 2015). This prevailing negativity directs the raft of store closures, thereby imperatively compelling the retail stores to adapt flexible formats and adapt new activities for bricks-and-mortar, which in simple words refers to the businesses having physical presence. In the case of Target, they announce that the company would implement a posed reduction on the floors and laid down certain associated commitments of lease by approximately 20 percent, and promulgating its growth online. The closure of several retail stores and its associated changes witnessed by Australia, categorically followed by the posed weaknesses in sales, reflects the adversity in accordance with its impacts on the associated global and online chains of supply wherein, Payless Shoes and Pumpkin Patch are considered as one of the prime casualties.
The ongoing turbulences in Australia relating to the retailing sector, forced the associated changes required for maintaining a pace in this competitive-edged market thereby being directly influenced by the consumer culture as well as the adversities of digitization. The revolution of several plans of expansion has been evident in the big-box retailers of the imminent suburban areas. Thus, the development of departmental and discount stores accounted as an aftermath of the posed compliance of the industry with digitization. The evolution of the departmental stores has thus, been tactically planned as a defensive measure for the fall of the retail industry (Mena et al., 2016). The introduction of several innovative stores also accounted for bridging the lead, which the digitized market made through the introduction of e-commerce, or online shopping. Thus, for maintaining the pace in the competitive-edged market, the physical retailing stores of the modern world will tend to offer greater virtual experiences as compared to the traditionalism, thereby dynamically changing the sphere of physical retail stores in Australia.
Figure 2: GDP of Australia
(Source: Mena et al., 2016)
The nation experienced several posed deliberations in accordance with the physical retail stores, which further accounted for the impact on its profitability of the concerned company. Thus, it has been evident that, in lieu of the active globalization of the world, concerning the concept of enhanced digitization, the use of e-commerce spread like a wildfire thus, setting ablaze the performances of the retail sector of Australia (Romaniuk et al., 2018). The sole driver for the drastic change faced by the retail industry was the active development of the online shopping industry. The severe impact posed on the retail sector by e-commerce, due to its nature of competitive nature and convenience, directed the shift of the consumers globally. This approximates the change of preferences of the consumers thereby directly affecting the apprehended profitability of the retail sector in Australia. The drastic change in demand also catered for the incorporation of several adjustments in the sphere of retail industry in lieu of the diversified nature of e-commerce. The consumers pose an imminent role in determining the profitability of any concerned business (Marques, 2019). Thus, the drastic change in their respective demands, compelled the retailing sector to mitigate them accordingly for maintaining the optimum pace of the competition.
Thus, the introduction of e-commerce and its underlying adversities, in lieu of competitiveness in the market, forces turbulence in the particular sector of Australia. Imperatively, the changing trends in the market segment posed due to the introduction of e-commerce duly affected the profitability of the retail sector. The dire changes in the market segment catered to the declination of the retail sectors in Australia. The rendered convenience by e-commerce, allowed its enhanced preference in the market thereby captivating the minds of the customers. It directed the customers to opt for online shopping as their primary preference, thus reduced the account of profitability. The defensive measures severely adapted by the retail sector for curbing the disadvantages in comparison with the e-commerce in the markets of Australia, actively fuelled their resurrection.
The future of the retail industry with respect to Australia categorically shaped it in accordance with various disruptive forces, which mainly includes the varying patterns of expenditure in the markets of Austria concerning the dedicated customers. The introduction of several foreign companies incorporated a new dimension in the retail sector of Australia. The retail industry has also faced certain changes in the consumer behaviours, which enumerates the alleviating expectations in lieu of the posed technological factors, which has been one of the prime reasons for the changed behaviour of the consumers in Australia (Geyskens, 2018). Consumers become more Tech Savvy and busier with their work, which compels the retail industry to incorporate agility, mobility and several platforms of delivery which leaves behind the non-responsive retailers in the industry behind. Two alternatives for shaping the future face of the retail industry are as follows:
Kiosks and Departmental Stores
It is the alleviating opportunity that can be taken into account by the retailers in Australia encompassing a small amount of warehouse or inventory (Akter et al., 2019). This can be directly helpful for the small-scale retailers to develop their businesses encircling a small budget thereby further creating an efficient chain of retail in Australia, thereby being categorically recognized as departmental stores providing convenience to the mass. These types of stores enhance profitability with low investments, thereby emphasizing the clause of the lease. Thus, departmental stores and the Kiosks allow greater zone of expansion for the retailers as well as renders greater convenience to the customers, thus, satisfying the requisite needs of the market.
Discount stores are regarded as the particular stores that offers products at a lesser rate than the normal price of the retail goods (Grimmer et al., 2018). The said stores can drop the price of the retail goods owing to the efficient distribution chain. This drop in price would enable them to attract a higher rate of customers and thereby maximizes the profit. The few examples of the same are Target Australia and other departmental stores, can be considered as one of the most significant discount stores in the country.
In the light of the above discussion, this may be said that the retail industry depicts the holistic characteristics to bloom appropriately and be the leading sector in the country of Australia, both in terms of revenue and employment. The popularity of the said industry may be acknowledged due to the degree of convenient product range that no other industry may produce and thus attracting the reliability of the same.
The retail industry of Australia as per discussion can be regarded as all-encompassing sector but with the introduction of e-commerce with the concerned sector slowed down the progress. The future of the Australian retail sector may depict a bright picture with the development of the requisite technologies.
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