The future of physical retail is downsizing, ARA
Rumours of the death of bricks and mortar have been greatly exaggerated, according to Russell Zimmerman, Executive Director at the Australian Retailers’ Association (ARA).
The High Street remains an important part of the omnichannel puzzle, just on a smaller scale, he believes. Speaking to A’n’Z of Economics on podcast, Zimmerman said the trend would not just be seen in large department stores but across the board. “We're seeing retailers look at the size of their footprint and bring the size of their shop down,” he commented.
Zimmerman featured on the podcast alongside Richard Li, the Chief Operation Manager for Miniso, a Tokyo-based retailer which has recently opened stores in Australia. Zimmerman said on-the-shelf products at these smaller stores would also serve as samples to entice buyers to shop online. “Why do you need 120 or 130 square metre stores?” he asked.” I think we're going to see some really big structural changes and I don't think that the landlords have really come to grips with it”
“I think the big issue for retail facing Australia at the moment is the cost of the landlord," Miniso added. He said rent was a key consideration for offshore groups when considering entering the Australian market. “We've been doing a 2018 budget review,” he commented. “On one side, we have our ambitions expansion plan, but on the other side it's like, what's the cost?”