Bricks-and-mortar retail has been on a bit of a rollercoaster over the last few years. In the years leading up to the Covid-19 pandemic, questions were being asked about its viability amid the rise of online shopping. But following a period of global lockdown and forced isolation, the allure of going to the nearby store has been rekindled for many. And retailers are taking notice, with many having announced a bigger focus on improving the in-store experience for customers, and growin
growing its overall store count.
Mosaic Brands, for example, announced last week that it would be bumping its store count by 130 stores by the end of the year – taking its total to over 1000. The group’s brands include Katies, Millers, Noni B, Rivers, Rockmans, Crossroads, Autograph, W.Lane, EziBuy and Beme.
“From Mosaic’s perspective, we never, ever thought bricks-and-mortar was dead,” Mosaic Group chief executive and managing director Scott Evans told Inside Retail.
“We know there are a vast amount of customers that shop online with us who haven’t walked into a store, and many who shop in-store but not online, [and] in between, there’s a far greater number of customers who move seamlessly between the two.”
Data from McKinsey showed that omnichannel customers tend to shop almost twice as much as single-channel customers, and spend more while they’re at it.
According to unaudited accounts for the half year to January 1, sales at Mosaic Brands grew 23 per cent driven by strong trading momentum and a higher average transaction value, with comparable store sales up 12 per cent, and online sales up 0.3 per cent.
“We’re becoming a true omnichannel retailer in that our online and physical stores are fully integrated and operate seamlessly,” Evans said.
“In line with that approach, around a third of our revenue as a group is now online, and we’re opening a number of larger format stores, especially under our Rivers brand.”
Waking from hibernation
Much of Mosaic’s recent success has come from its focus on older customers.
During the pandemic, Evans explained, Mosaic’s target customers were being told they were at the highest risk of infection, and subsequently went into retail hibernation – whereas younger Australians, boosted by JobKeeper payments, flocked online.
“What you are seeing now in the economy is the reverse,” Evans said.
“Older Australians are less impacted by inflation and interest rates rises – in fact, it benefits their savings. Younger Australians are once again asking their parents for petrol money [and] those in their thirties and forties with mortgages are having to cut back spending.
“Focusing in on [older Australians], we’re confident that as an omni-channel retailer, we’ll be more resilient”
A whole new world
A focus on larger format stores, as well as a general focus on delivering more experiential retail in person, is driving customers’ in-store shopping behaviour.
Following the pandemic, many customers understand that if you want convenience, online is generally where to shop. However, shopping isn’t just about convenience. Many people missed, and have now rediscovered, the joy of browsing stores.
Making those stores memorable and engaging is key: a survey by shopping centre operator Westfield found that by 2025, nearly 60 per cent of customers expect that retail spaces will emphasise experience over products.
Experience architect Teleport CEO Edward Eremyan told Inside Retail that delivering a strong in-store experience goes a long way in helping customers to connect with a brand.
“When it comes to retail, there are so many different ways to shop, and when it comes to physical space, [retailers] have realised that it’s a real luxury to have a person in your space, [who] wants to spend their time with you,” Eremyan said.
“So, you might want to do your best to give them the best experience you can.”