It’s fair to say that Bricks and Mortar retailing has been experiencing a significant transformation here in Australia over the past 5 years. The combination of a changing shopper demographic and behaviour, cost of living challenges and the onslaught of online platforms such as Temu and Shein have significantly impacted the fashion space and consumer products in general. It is reported that some 70% of the population have purchased from these retailers in the past 12 months.
Bugg studies retail on a weekly basis, both from a Shopping Centre perspective and free-standing retailers. It’s clear that a growing number of retailers have not moved with the times. A good example of this was Jeans West which was around in the 80’s offering fashion relevant for the time. As time has moved on the consumer who shopped in these outlets is in their 60’s and the younger demographic has moved on to fast fashion.
Additionally, Ally Fashion was also liquidated recently and was victim to changed shopping patterns, increased operational costs and increased international competition. Brands such as Millers and Noni B have also disappeared as they became irrelevant in a changing market. Interestingly we have seen KMart, who operate in the mass market segment, take significant steps forward as they develop their own ANKO brand. It is reported that 85% of their current SKU count is ANKO based. It’s also reported that they are approaching 10 billion dollars of turnover from their 300 stores. Clearly, they have found a formula which is being embraced by Australian consumers.
Interestingly the LEGO brand has 22 AG LEGO Certified Stores in Australia and New Zealand. These stores are part of a larger network of official LEGO stores worldwide, but only a select few are in Australia and New Zealand. AG LEGO Certified Stores operates these stores in partnership with the LEGO Group, Alquemie Group. These stores provide a high level of experiential activities and attract significant foot traffic.

In terms of retailers who have failed to keep up with the times, there is a long list over the past 10 years including: Ed Harry, Dimmey’s, Roger David, Oroton, Dick Smith, Masters, Homart, Retail Adventures, Colorado. The large shopping centre outlets such as Chadstone in Victoria continues to grow and is home to hundreds of global brands. It also offers a destination where shoppers can experience world class presentation including food, entertainment, fashion and there is now a hotel located in the precinct to attract consumers who plan a trip to experience the centre.
Clever operators such as Peter Alexander, Cotton On, Apple, Mecca and Sephora (Beauty/Cosmetics space) all offer a shopping experience which complements their products. Cotton On also provides the consumer with good ambience a trend forward product offer. Gentle Monster is a South Korean luxury eyewear brand known for its avant-garde designs and unique retail experiences. They are also known for their limited-run collections and experimental approach to fashion. They have just entered the Australian market and have aggressive plans for expansion.
DJI who are a Shenzhen based drone and technology organisation have also just entered Australia with grand plans to expand. This is another example of an international brand who offers the wow factor at retail. Creativity is at the heart of everything they do. Their flying and camera stabilization systems redefine camera placement and motion. Amazing photos and video, treasured personal memories, and high-end professional imagery are captured every day, in every corner of the world using DJI products.
POPMART is another interesting arrival into the Australian retail scene. Configured around the collectable/blind box segment they already have 30 stores around Australia and growing. POP MART has built, by far, the competitive edge with its designers, retail channels and industrial chain. The company has recruited famous designers like Kenny, Pucky and Kasing Lung, and launched many fan favourites to secure many loyal customers. Meanwhile, POP MART works with renowned global brands to create pop culture products based on classic characters that appeal to the young.

From more recent observations and after speaking to several retailers, perhaps Bricks & Mortar retailing is poised for a dramatic revolution based on the learnings of failed ventures of recent years. It is reported that 70% of Australian shoppers still see in store shopping as a priority. Omnichannel activities are also providing greater penetration for Bricks & Mortar retailers. The emergence of experiential hubs which involves workshop (i.e. Bunnings) product demonstrations and community events go a long way to foster deeper customer engagement and brand loyalty. Economic indicators suggest a positive outlook for retail and the anticipated interest rate cuts announced today will help to ease cost of living imposts and free up disposable income.
It is reported that inflation has eased and without any increase in unemployment. The news reported today that the RBA will meet this week and cut interest rates. They will meet again in subsequent months and potentially cut rates further to bring the cash rate back 3.3% compared to the current rate of 4.10%. This will unlock disposable income and further invigorate the Bricks & Mortar segment.
You can see as new retail precincts are evolving that there is a premium placed on offering a great experience for the consumer, where they can immerse themselves in what’s on offer and potentially spend many hours exploring retail centres.
This article originally appeared in Edition 50 of The Bugg Report Magazine