Omicron is driving consumer confidence to levels unseen since 1992
Written by Stephen Scammell on Jan. 4th 2022
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As Omicron fears bite, Consumer confidence levels for January are at their lowest since 1992.
The index fell 7.6% last week, as the Omicron virus continues to shut businesses around the country and force workers off the job.
According to ANZ, the sentiment is reflected in January spending data, too, which has so far fallen 27% through January.
Shoppers have tightened their purse strings and locked themselves down through January, as consumer confidence tallies its worst post-Christmas performance in 30 years.
At the Commonwealth Bank of Australia, debit and credit card spending also took a tumble during the first two weeks of January. According to the bank, spending took a 3% fall, compared to last year.
“With a large number of people in isolation we have seen spending on services slow sharply. Services spending had been recovering strongly since restrictions were eased from October.”
“However, spending on goods has held up well. Online spending growth remains firm, while in‑store spending is a little lower.” The Bank said.
When you're presented with the option of going to a busy shopping centre, with the risks that involves, or staying at home, and shopping, that is where consumers have headed. The Omicron risk plays a part in the feelings you have that keep you at home.
However, it is not all bad news for the Australian retail sector with more and more opportunities presented every day.
The following extract is from the Australia Post 2021 E Commerce Industry Report
Spending more time at home than ever before, people pulled out phones and laptops to do their shopping. In Australia, online shopping growth for the 12 months to 31 December topped 57% YOY. In fact, it took just over eight months of online shopping in 2020 to eclipse 12 months’ worth in 2019.
More Australians shopped online than ever before in 2020. Around four in five households – that’s almost nine million – purchased online at some point during the year. Every month during 2020, an average of around 1 million additional households shopped online compared to 2019.
With all this online activity, purchase volumes soared. Australians spent an incredible $50.46 billion online over the year, up from $32.1 billion in 2019 and accounting for 16.3% of retail spend (excluding cafés, restaurants and takeaway food).
So what does that mean for you?
If your retail business is not online and setup correctly to have the reduced number of shoppers coming to you, then now is the time to act. More and more people are going online every day to find goods and services from businesses like yours and now provides a great opportunity to find, connect, reward and retain these new and existing customers.
In the November 2020 ABS Household Impacts of COVID-19 Survey, a third of respondents indicated they prefer to shop online now more than they did before the pandemic. These figures are even higher in states that have experienced greater case numbers and tougher restrictions – 43% in Victoria and 35% in New South Wales.
More and more year on year trends show the Australian population becoming more prepared to shop online for the goods and services they previously found out and about in shops and shopping centers. Throw in the Covid virus and the trends are clear the online shopping service is here to stay.
But don’t just build your online shop and expect customers to be placing lots of orders right off the bat. There is a system involved with finding, connecting, rewarding, and retaining these new and existing customers. Set up the system correctly then stand back and watch as the orders come in.