While overall retail spending posted a growth of five per cent over the last 12 months, most of that can be attributed to food sales. According to the Australian Bureau of Statistics (ABS) report, clothing and accessory (including jewellery) retailing has experienced a prolonged period of stagnation, lasting five years.
Obvious causes of the tough period include tighter consumer spending amidst a global financial crisis and the surging popularity of online shopping. The lower spending trend and its origins has been obvious to many jewellery retailers for a long time now.
Australian Retailers Association executive director Russell Zimmerman said there are many reasons for the decline and he believes the popularity of overseas travel in particular has affected consumer retail spending behaviours.
“Consumers are struggling with the incredible cost of utilities and that’s taking money out of their pocket. And they are saving a lot more and traveling overseas more than ever thanks to a strong Australian dollar,” Zimmerman said
Another ABS study, the Household User of Information Technology report, showed more than 50 per cent of 18-45 year old Australians made online purchases last year, with a majority of those buyers seeking cosmetics, clothes or jewellery.
“The Internet is at play here too," Zimmerman says. "That makes it difficult for retailers who aren’t in the online space. So there are a lot of things pulling at the Australian consumer’s dollar that would normally have been spent at retailers throughout the country.”
These figures can be a scary thought for jewellery retailers, but it also presents a great opportunity.
Support for local online businesses
A recent report by Paypal showed that 70 per cent of Australians’ online spending went through Australian online retailers. This could possibly be a sign that brand trust and the convenience of buying from a domestic outlet are influencing factors on where consumers spend their money.
However, with global shipping prices coming down and a strong Australian dollar, there are a lot of challenges for domestic retailers who want to make an impact online.
Zimmerman believed the ease of use and on-demand nature of online shopping makes it an essential selling platform for retailers.
“It’s vitally important that retailers of all kinds have an online outlet,” he said. “I’m not saying diamond rings should be sold online, but there are a lot of types of jewellery that would be appropriate. Watches do great business online, Pandora have been doing very well with their online shop as well. People are looking for convenience in this day and age, they want to buy when they think of it."
More Reading: 1 million in stock for new jewellery clearance website