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Retail Holiday Report 2024

Charting a course for growth

How well are retailers attuned to the minds of their customers? Deloitte commissioned side-by-side surveys of 1,000 Australian consumers and a cross-section of Australia’s leading retailers on their expectations for the all-important holiday trading period. Taken together, the results of these surveys paint a holistic picture of the retail landscape these holidays. In our report you’ll find detailed analysis of these results, along with deep dives from our leading experts into the key trends and expectations for 2024 and beyond.

 

For Australian retailers, there’s been no avoiding the stormy weather in the last 12 months. But while they batten down the hatches for the challenging economic conditions of today, retailers are preparing for clearer skies tomorrow and we’re seeing opportunities for growth and innovation to chart a course for a more prosperous 2025.

Retailers are adapting to market conditions by lowering prices, focusing on affordable and value-driven products, creating better in-store experiences, and embracing innovation to attract new customers.

As for consumers, they are worried about the state of their finances as cost of living pressures impact when, where and how much they spend. The higher cost of living is even having an impact on major life decisions, with half of consumers putting off these milestones due to their financial uncertainty.

Still, there are opportunities for retailers to succeed in this market. Consumers will spend with brands they trust and are less likely to take a chance on poor-quality imitations or where they feel like they are being exploited. It’s a tightrope, but one the best retailers will walk confidently.

With that in mind, what can retailers do to win this holiday season? For the first time, we have separately surveyed Australian consumers – and they offer some compelling clues.

A whopping 95% of consumers are actively seeking the best deals, and 87% are staying at home more often. Retailers should meet the customer where they are, aiming to surprise and delight with those little luxuries that put a smile on one’s face. Indeed, 67% of consumers are still looking to splurge a little on themselves despite the headwinds. By getting the offer right and providing value, your customers will reward you.

While consumers may at first be sceptical about new technologies like artificial intelligence (AI) chatbots and augmented and virtual reality (AR/VR), retailers that deploy and integrate them seamlessly will drive better customer experiences, conversions and satisfaction. The Australian consumer is savvy, genuine and sophisticated, and they expect the same of their retailers. When consumers interact with AI, they expect truly generative interactions that blend smoothly with human connection. Similarly, as more retailers build marketplaces to expand their product range and target new markets, consumers are intrigued; but differentiating the marketplace without compromising its identity, values and customer expectations is a challenge in itself.

Over the last 12 months, data security breaches, allegations of price gouging, unethical behaviour and poor treatment of employees have significantly impacted consumer sentiment. The best retailers are the most trusted, and consumers will absolutely reward them. 69% of retailers and 52% of consumers say product quality is the most important driver of trust. Fair pricing comes out on top for 19% of consumers, though just 8% of retailers are on the same page. Businesses must have a strong grasp of what builds trust with their customers: it’s easily shattered, and consumers will punish any breach of confidence. 

Consumers are looking for sustainability in their purchasing decisions and care about the reputation of the organisations they interact with – particularly in younger age groups. But while climate change is the top concern for 24% of millennials and 25% of Generation Zs, the cost of living is considered more pressing (40% and 43% respectively). Retailers need to put sustainability at the core of their business practices and value chains and find innovative ways to combat climate change, but without increasing the production cost and subsequent retail price   of their offer. 

2024 has been a tough year for both retailers and consumers, and it may be some time before relief from high interest rates and cost of living pressures.  
Even so, retailers can still make a meaningful impact on consumers.

Australians want to create special moments at home and spend quality time with loved ones these holidays. The scene is set for retailers to play a pivotal role and make it a magical time for consumers.

This holiday season the seas may be rough, but now’s the time to trim the sails and chart a course to a brighter 2025.  

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