A recent survey from the Australian Centre for Retail Studies at Monash University revealed the improving perceptions retailers have of shopping centre operators. We all know that for bricks and mortar to survive, retailers and shopping centres need to work together to increase foot traffic by creating the "buzz". And strip shopping locations can also do this. Shopping can still be a social and relaxing activity, it should be so much more fun than pressing the screen of your iPad.... Yes, Amazon like all online channels is a threat, but many retailers with physical stores are achieving higher than average margins when they really connect to their customers and make it an enjoyable experience.
Even before the arrival of Amazon, online shopping is devastating Australian retail. In the past year, sales in physical stores grew only 3% while online shopping grew almost 10%. Foot traffic in physical stores has fallen by almost 5% this year alone. Both retailers and shopping centre operators have to work together to create compelling reasons for customers to leave their homes and go shopping in physical stores. This has already resulted in a lot of experimentation, from VIP shopping nights to pop-up stores and events. The decline in foot traffic is reflected in the retail industry’s profit margins, which have consistently declined since 2008-09. Physical stores have seen their profit margins hover around 5% since 2008-09, while online retailers’ have grown. Profit margins for online retailers are now on average roughly double that of bricks-and-mortar stores.