Prior to COVID-19, many people were already utilising digital payments and online shopping. Then it became essential to keeping people safe, and now is a regularly adopted part of people’s lives.
So, where does that leave the future of the shopping centre? In this podcast episode and blog, we explore all of this and more, as well as provide insight into people’s finances during the pandemic.
A snapshot of Australia’s financial health
While not talked about a lot, the topic of financial health is an important one. Our research has found that the number one financial regret of Australians is not prioritising their financial health earlier. More than half of Australians (53 per cent) only have $5,000 or less in their savings account right now. And shockingly, a fifth (22 per cent) have less than a hundred dollars.
Positively, we are starting to see a shift with younger generations prioritising their financial health. Younger generations of Australians are highly engaged with their superannuation. More than half of Generation Z (54 per cent) and two in five Gen Y (42 per cent) check the balance of their superannuation fund at least monthly. Younger generations are becoming more financially savvy and are placing a greater priority on that because they’ve learned from the generations that have gone before.
What people plan on doing with their savings
While the last couple of years has been tough for many financially, for others it has provided a time for them to save more than they normally would. For those that have been able to save money, the number one thing they want to spend their COVID-19 savings on is travel. Closed borders have not curbed the desire to travel, but rather enhanced it. Particularly among generations whose gap years have been stalled. Aussies are looking to travel, whether that be to regional, interstate or international destinations. However, others are taking a slightly more practical approach with their savings and paying down debt, growing their retirement fund, as well as buying property.
A cashless society and online shopping
Digital payments have been on the rise, with card payments today being 2.4 times what they were a decade ago. In 2007 – the same year Steve Jobs announced the iPhone – almost 70 per cent of payments were cash. Today that has flipped with almost two in three payments being card payments. It is not surprising, therefore, that seven in 10 people agree that Australia will be a cashless society by 2031. This will open up a number of opportunities for consumers and organisations as the frictionless experience that comes with the integration of digital intelligence becomes mainstream.
The last decade has seen significant shifts in consumer behaviour, and one of the most significant has been the rise of online shopping with the ease and convenience it offers. Two-thirds of Australians (66 per cent) expect to purchase more online than in store into the future. This indicates that online purchases will likely become default or first preference over going to the bricks and mortar.
The future of shopping centres
In an era of increasing online shopping, it can be cheaper for retailers to simply have an e-commerce store. It therefore begs the question, why do we need a bricks-and-mortar store? Interestingly, our research shows that 72 per cent of Australians still enjoy shopping in-store. This means there is still a place for the tangible experience. For many, the shopping centre is an important part of their community, showing that it still plays an important role as one of the gathering points that draws people together. However, it is a time of re-invention for the traditional shopping centre. To remain relevant, it requires retailers to ask, “What is it about the experience of going into a store that is unique, and which people can’t get by shopping online?” The question that needs to be asked is, “How can the act of shopping in a store be more of an experience than just a transaction?”
Additionally, we are also seeing a return to local. This is where people are increasingly wanting to know their local producers, and to enhance their sense of community that comes with shopping locally. People are increasingly wanting to understand the supply chains of their products and where they’ve come from. While online shopping will certainly continue to rise, the shopping centre can still have a place if it can become the hub of a community and help facilitate a focus on local.
How retailers can respond to consumers becoming more digital
As consumers become increasingly tech-savvy, retailers and organisations need to not only create great products, but think about how they market them in a more digitally integrated world. Consumers today, whether they are purchasing from a bank or from a grocery provider, have greater expectations of the shopping experience because of the day-to-day technologies that they use. These platforms are seamlessly integrated, and it has increased the expectation for other experiences to be just as frictionless and personalised.
Article supplied with thanks to McCrindle.
About the author: McCrindle are a team of researchers and communications specialists who discover insights, and tell the story of Australians – what we do, and who we are.