2019, retail and dealing with the challenges - A marketer's view

Certain times of year come with regular annual challenges. Sticking to a new year’s resolution, waiting for the footy season to start and surviving the take-no-prisoners Sydney weather are my own particular burdens as Autumn sets in.

In the world of Twentieth Letter, March is normally the time to consolidate after the Summer season and push to find new efficiencies for our clients.

This year, March has brought a unique challenge for Twentieth Letter: how the dour-looking national economic outlook will affect our retail-based clients.

Finding solutions to this dilemma is currently taking up a lot of brain-power at Twentieth Letter HQ, so let’s dive a little deeper.

It’s no secret that housing prices are looking shaky. Tighter lending restrictions telegraphed way back in 2014 have been removing investment demand from the residential market for years and the bubble is finally ready to go. Whether it turns out to be a pop or a re-adjustment remains to be seen; although a slow deflation seems more and more likely.

What we know for certain is that home owners are spending their cash with far less abandon and consumer confidence recently took its biggest monthly fall in more than three years. Meanwhile, December’s retail foot traffic numbers were the worst on record and fell a further 4% in January.

This isn’t necessarily bad news for a marketing company, especially when we think our work stacks up dollar-for-dollar better than any of our competitors.

 It is however, confronting news for our retail and precinct-space clients. Centre owners have a few response options available to them depending on whether they see the problems as cyclical or structural.


If centre owners think the downturn is cyclical, then poor results can be blamed on macro-economic events. Housing price uncertainty, US political ambiguity, Chinese trade uncertainty, an uneasy national political environment, an ongoing costly drought and the poor results of the Aussie men’s cricket team are all playing their part. And while the amazing Australia’s women’s cricket team easily make up for their male counterparts’ Summer failures, the rest of the issues – and their dramatised reporting – seem to have produced a level of apprehension in consumers not seen for some time.

The good thing about apprehension is that it will eventually pass; but the bad thing is that people feeling apprehensive tend to keep their money in their pockets.

In this scenario, landlords have a decision to make if they don’t want to face the prospect of some empty shops before Easter. Either help out struggling tenants with rent-assistance, or pump large amounts into promotional activity. Neither is ideal, which is why secret answer C is more appealing.

Secret answer C involves a single holistic marketing strategy and roll-out marrying digital with community engagement alongside a wider and deeper demographic understanding of the community. Bringing together these often-siloed marketing elements delivers a lot of low-or-no cost wins for retailers and landlords looking to bump foot traffic.

Every month, we bring in new retail clients surrounded by low-hanging marketing fruit. Compared to the cost of rent abatements, massive advertising budgets or empty shops, it’s a relatively small investment that can make a massive difference to struggling retailers. 


If the issues are structural, they’re more social than economic and the blame can be cast towards online retail. Online shopping continues to grow at a rapid rate and while Amazon’s Australian entry hasn’t yet been as disruptive as first thought, wider efforts to personalise the digital retail experience are working.

Meanwhile, efforts by online retails to spread the overall Christmas spend away from December has seen huge November and January sales re-training consumers to discard their bulk-buying habits in the lead up to the Summer holidays.

For example, fashion and footwear – goods that really struggled in bricks-and-mortar during December – have seen significant online growth spread across the year.

So how do retailers win back the attention of consumers used to fifteen-step personalised digital and event-based brand-loyalty journeys?

In 2019, sales-driven marketing isn’t the easy answer it used to be. Community focused activations supported by targeted digital engagement give lost consumers a reason to get down to their local centre and look up from their phones for a while.

Another answer might be a move away from traditional holiday-focused seasonal shopping.

The importation of US Black Friday sales into the Australian retail calendar at the end of November can be seen as a direct play by online retailers to steal traditional Christmas spending before December.

Finding a way to bring consumers to bricks-and-mortar in the months before and after December is a whole new battleground. Which is why holiday curmudgeons (like me) who don’t like Halloween might need to leave behind their older Australian biases in 2018.

Food delivery services are also booming. And while restaurants still get the sale, margins are eaten away by platforms that also abuse their industry responsibilities. The mix and quality of food offerings in retail spaces must improve; consumers need to see utility value in leaving the comfort of their own homes to eat out. This means better fit-outs, Instagramable experiences and a cool factor many longer-term tenancies will need help to achieve.

 Either way

One simple and effective way to adapt to the change, whatever its cause, is community-based and demographically-relevant centre activations. Events like the Glenrose Village Cuppa, which partner a centre with its local community groups can deliver multiple benefits to the wider-community, a centre’s foot traffic numbers and – most importantly – retailers’ bottom lines. Whether it’s cyclical or structural, the much talked about revolution in Australian bricks-and-mortal retail is finally here and is a matter of survival for many.

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One simple and effective way to adapt to the change, whatever its cause, is community-based and demographically-relevant centre activations
— Bob Tronson