On the same day there are media messages of doom and gloom, there are reports that this Christmas will be a strong one for retailers. So who are you to believe?
Retail, overall, has performed reasonably over 2016, and some retailers remain confident going into Christmas and rightly so, for those with a compelling customer proposition. Online spending this Christmas will again increase.
However a couple of recent large retail administrations have exposed some of the losers in the industry, and these wont be the last. Post-Christmas the squeeze on working capital usually sees a few more fall over. In a recent large retail apparel insolvency I was appointed to, the business had ultimately been impacted by the greater intensification in retail competition from foreign entrants. Other factors, in its control, were that it was slow to adopt to an omni-channel approach, failed to understand its cutomer or change.
Recent analysis supports the Reserve Bank's claim that competitive pressures in retailing are keeping inflation down and also show retailers are feeling the pinch of keeping prices low. Australian Bureau of Statistics show the price index, i.e the margin between the purchase and sales prices of retail goods, for the output of the retail industry has flattened out in recent years.
To succeed, focus on great customer products and service - these will always put you ahead of the game. But also, more than ever, get your digital strategy right and data to be adaptive to customer demands.
Consumers are likely to set a spending record in 2016, with a four percent increase on last year’s figures despite the slow year retail has experienced.