New Zealand’s dynamic and rapidly-changing retail environment offers challenges and opportunities for both entrepreneurs and established players in the sector, according to Massey University’s 2018 Big Issues in Retail survey.

The university’s Professor Jonathan Elms, who holds the Sir Stephen Tindall Chair in Retail Management in the Massey Business School’s Centre for Advanced Retail Studies (CARS) says a feature of this and other recent surveys is the way in which consumer behaviour is becoming increasingly complex and demanding.

“Consumers are increasingly using different channels – from stores to online to their phones – to shop and procure services,” says Elms. “The survey identifies this as both a challenge and an opportunity.”

Younger consumers in particular, Millennials and Gen X and Y are increasingly ‘channel agnostic’ when they are looking for a particular product or service.

“Retailers that can genuinely integrate technology throughout their business can bridge this digital divide and create a coherent offer that builds consumer loyalty,” says Elms. “There are some very good examples of this. The Warehouse is a classic example of taking this technology change very seriously. Another really good example is IKEA which takes a very integrated approach.”

While it was true that online retailing continued to grow exponentially, consumers continued to value an in-store experience and physical retail networks were as important as ever.

“The value seems to lie in how you put your whole offer together across all these channels,” he said. “Online channels and the use of technology isn’t anymore a stand-alone element for a retail business; it has to be completely integrated.”

Professor Elms said that New Zealand’s retail scene remained very vibrant, a feature of which in recent has been the arrival of many new international players, such as H&M and Zara in apparel. This, alongside the increase in the minimum wage and introduction of GST on internet purchases were notable features in this year’s survey that were impacting retail businesses.

“These dynamics offers both challenges and opportunities,” he said. ‘What’s clear is that wherever you are in the sector, the sector is continuing to change rapidly and no one in unaffected.”

Kiwi high streets as yet seemed less negatively impacted than those in the UK and Europe where the number of stores shutting made many high streets look ‘very uncomfortable’, said Elms.

“Kiwi retailers must be doing something right, but that’s not to say that further change isn’t coming,” he said.

An interesting feature of the New Zealand retail environment was that was still very discount driven.

“Tools like mailouts still work really well here compared to elsewhere in the world,” he said.

The biggest challenge for the industry in New Zealand continued to be attracting and retaining talent, said Elms.

While this was a challenge in all developed economies where retailing suffered from a poor image as a career, it was particularly acute in New Zealand in an economy at near full employment where there was fierce competition for jobs in service industries.

“It’s a global challenge, but more pronounced here,” he said. “I don’t know whether this is about geography or the size of the work force or a combination of factors, but there is a real war for talent.”

In countries like India and China, in contrast to the West, retailing was seen as entrepreneurial and rich in opportunity and there wasn’t the same stigma about retailing as a career as there appeared to be in Western economies.

“Retail here seems to suffer bad press,” he said, “it’s seen as a job you fall into or as temporary work when in fact there is a lot of money to be made and a great diversity of opportunity across the sector – it can very much be a proper career.”

The 2018 Big Issues in Retail Survey was conducted by the Centre for Advanced Retail Studies within Massey University’s Business School, Kaupapa Whai Pakihi. It is the third such annual survey and compared results with 2017 results. The survey examines the New Zealand retail sector covering issues such as Market Confidence, Consumer Behaviour, Marketing, Operating Environment and Human Resources.

Read the full 2018 Big Issues in Retail Survey here.

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