Customer behaviour in the age of COVID
Last year Sydney started out with the worst bushfire season ever recorded and ended with the Christmas plans of millions being ruined after an international arrival created a COVID-19 scare on the Northern Beaches. In between every State went through a rollercoaster of lockdowns, social distancing restrictions, and $130bn in stimulus that left the memories of 2020 indelibly marked in our psyche.
It is said though that it is an ill wind that blows no one no good, so by that measure COVID-19 was far from an ill wind. Online sales rose rapidly with a shift to online purchasing that may yet prove structural, supermarkets had a year to remember, and Large Format Retail benefited as people readied their homes for a long stint inside.
So how did this play out across the retail landscape and what are we expecting to see in the near future?
CBRE is in the unique position of being able to observe customer interactions, trends and customer profiles for any location in Australia. This provides us with a clear view of emerging trends and structural changes in customer behaviour.
We do this using Pathzz, a revolutionary customer analytics platform that uses a live sample of tens of millions mobile devices processed by artificial intelligence algorithms to build a constantly updating view of how people are interacting with every location across Australia.
And we mean every location. From an individual building to every Large Format Retail centre, shopping centre, city precinct and beyond.
For this article we took a basket of eight Large Format Retail centres situated across West Sydney and compared their performance to the dominant regional shopping centres, department stores and discount department stores within the same area.
The analysis revealed incredible growth in visits to the Large Format Retail centres that far outstripped that seen at the regional shopping centres, department stores and discount department stores.
As soon as restrictions were lifted people flocked to Large Format Centres.
Visits peaked during the 2020 Christmas holidays when they were 55% higher than the prior year.
Compare this to our basket of Discount Department Stores that were 13% up or the regional shopping centres who were shouting about their strong Christmas with a 2% increase.
Department Stores by comparison were down by 21% and Pitt Street Mall saw a 56% decline in visits over the same period.
Even as we can start to see the end of Jobkeeper beginning to have an impact, Large Format Retail centres remain buoyant with visit levels still over 40% higher than they were in a comparable period prior to COVID. With the booming property market led by owner occupiers and signs of a strong recovery we expect to see high visitation sustained through 2021.
One of the emerging patterns that Pathzz has revealed is the ageing customer profile across many retail destinations, with increasing numbers of people aged under 30 visiting shopping centres less often and instead choosing to purchase online or save their money instead.
Large Format Retail Centres appear to be bucking this trend as well.
A mix of big ticket items, instant gratification and the surge of first home buyers entering the market in the first part of 2021 has seen a continual influx of younger customers into Large Format Retail centres.
Another one of Pathzz features is that it tracks over 500 brand locations across Australia and measure visitation to each of them. This feature reveals that a number of leading furniture retailers have seen some of the highest growth in visitation post COVID.
A number of sporting goods retailers often found in Large Format Retail centres also feature prominently as we once again embrace outdoor activities and look to shed the COVID weight gain.
Perhaps though, it is more likely to be embracing sweatpants over work clothes, because at the bottom of this list sits a number of well know clothing retailers.
