Consumer confidence in Australia reached its highest reading since late 2013, after rising (about 1.8%) to 105.1 in January, according to the Westpac-Melbourne Institute Index of Consumer Sentiment.
This bodes well for retail businesses in the country, as more people think they have a higher spending power. However, retailers need to be aware of certain threats to their continued survival this year.
The higher consumer confidence may be a manifestation of rebounding retail sales in recent months. A strong start to the calendar year indicates a steady momentum for purchases, at least in the near future. This will occur despite lingering questions whether the rebound in sales may be sustainable, especially in the context of heavily discounted items and new iPhone sales.
For retailers, there’s a need step up your advertising strategy amid the entry more competitors. If your business covers capital cities such as Perth, SEOServices.com.au says that search engine optimisation (SEO) services or social media campaigns are an option.
Threats to Retailers
As online retail becomes more common, local enterprises need to be more familiar with their competitors’ business strategies. Based on the Deloitte Global Powers of Retailing report, there are 38 companies from the top 250 global retailers that already operate in Australia.
Amazon serves as one of the biggest threats to any local retailer. The U.S.-based company continues to expand its infrastructure and services, which will then lead it to have a broader presence in Australia by the second half of 2018. Discount supermarket Lidl will be a key disruptor for business this year, although it may not have an immediate impact. Likewise, Chinese online retailers have also found their way to do business in the country.
The increasing consumer confidence may be good news for retailers, but this will not be beneficial if companies fail to keep up with increasing competition.