Reaping the Rewards of Post-COVID Retail
A year-and-a-half of COVID certainly has changed the shopping behaviours of the Australian people.
In May 2020, the first bit of retail data referring to the pandemic was published by the Australian Bureau of Statistics. I was very excited to see how a month of COVID restrictions had impacted our collective retail preferences.
At first glance, we appeared to be dealing with the pandemic in the most Australian way imaginable. Retail sales for liquor went up by31 per cent from February 2020(last pre-COVID data point) to March 2020
SHORT-TERM SHIFTS
Usually retail figures change by zero-point-something per cent each month. After a closer look at the data, it became apparent that we were just purchasing our drinks through different channels. We couldn’t buy our beers at the pub and simply went to the bottle shop instead.
Enough of those short-term shifts that we saw at the start of the pandemic. The latest data we have access to refers to May 2021 when Australia was relatively unimpacted by lockdowns. How have our retail preferences shifted since the start of the pandemic?
To put it simply, we spent our money right where we were. At home, on the home. Looking at the same old sofa all day long, it was time for a change. As soon as local lockdowns eased, people spent big on furniture. The logic was simple. If you spend more time on your couch, you might as well upgrade to a flashier model.
Working from home? New desk please. And there was more.
SKYROCKETING FURNITURE SALES
If you don’t commute you probably sleep longer, and those online mattress shops just kept advertising until you finally gave in. While furniture sales declined between February and March last year, they skyrocketed to record heights afterwards.
Our spending spree went further – always in the name of lifestyle and improving the family home. We spent much more on electronics. The family TV got an upgrade, new tablets and laptops were essential for the next stint of home schooling.
While we are at it, throw in a PlayStation to keep the kids quiet after school. Today, there isn’t a single retail sector that is doing worse now than before the pandemic. We aren’t drinking our problems away; we are using retail therapy instead.
We could afford it, too. Thanks to JobKeeper, and the lack of overseas trips, most Aussies had plenty of spare cash.
THANK THE MILLENNIALS
Another driver for the retail boom has nothing to do with the pandemic. Our demographic profile simply dictated an increase in retail spending. Our largest generation, the Millennials (born 1982 to 1999), are the biggest procrastinators to have ever walked the Australian continent.
They delayed everything. They popularized the gap year, stayed at Uni longer to get just one more degree, started their careers later, partnered up later, had kids later, and purchased their first home later in life. Just as the pandemic hit, the Millennials finally started their own families at scale.
That’s why house prices went up despite negative migration figures. Millennials left their small inner city homes to hunt for family sized homes in suburbia and the regions. Their nesting behaviour not only saved the property sector but also turbo-charged the retail industry.
At the start of the family stage of the lifecycle, all you do is spend money. Buy a house, feed the kids, clothe the kids, buy washing machines, vacuum cleaners, BBQs – the list goes on. In your late 30s and early 40s, you spend more money than at any other stage of your life. A perfect retail bonfire.