The transformation of the South Australian retail sector is set to accelerate next year, driven by digital disruption and changing consumer shopping behaviours, according to the findings of the inaugural retail industry research published by Bentleys SA and Business SA.

The survey polled shoppers and retailers over 2016 to establish views of the local sector and to gauge their opinions in regards to technology-driven changes.

According to the survey, traditional bricks and mortar retailers shouldn’t view the change negatively and revealed there is still a strong preference for instore purchases.

Michael Ruggiero, managing partner at Bentleys SA, commented on the survey findings and said that with over half (52 per cent) of shoppers saying their habits are changing, businesses need to plan for future changes to stay relevant.

“As more and more shoppers adapt their habits to suit their preference in terms of online versus in person shopping, retailers will need to respond,” Ruggiero said.

“With the rise of international online retailers as an aggressive competitor in the market, local retailers are anticipating a greater shift to mobile devices over the next 12 months and beyond. Consumers are clearly comfortable with this shift to digital also with 75 per cent of respondents indicating they were turning to digital channels to either research or purchase products,” he added.

When asked about the future of their businesses, the overwhelming majority of retailers (93 per cent) expect their retail business to grow either ‘moderately’ or ‘significantly’ over the next two years. However, at the same time, close to half (40 per cent) of businesses do not have a clear vision in place for their business in 2018, with 27 per cent reporting that their business is unlikely to be sustainable in its current form.

“While change can often be difficult, we would advise local businesses to get on the front foot and to consider how they can adapt and innovate to remain viable in the future,” Ruggiero said. “Having a robust business plan will help retailers respond to external changes and to do so in a way that makes sense in terms of consumer behaviours, which will encourage repeat visits.”

While noting a change in consumer behaviour, Ruggiero said the importance of the instore experience should not be discredited. He said about 69 per cent of shoppers still prefer to buy products instore, placing greater value in the bricks and mortar experience where they can ‘see, feel and try’ the product before purchasing.

“South Australian shoppers feel more confident about their purchases when they physically buy the product. In this instance, it seems that factors that are unique to in-store shopping – such as in-person customer service and the physical act of visiting a store – add to the overall experience,” he said.

As a further positive for local store owners, supporting local businesses and manufacturers is high on the priority list for South Australian shoppers, with 66 per cent of shoppers stating that it is ‘very important’ to support local retailers, and 62 per cent indicating that it is ‘very’ or ‘extremely’ important to support local manufacturers. This provides the opportunity for retailers to make the most of this loyalty by adjusting their business plans to keep up with anticipated growth.

Anthony Penney, Business SA executive director, Industry and Government Engagement, said there is no doubt that technology is disrupting entire industries and the retail sector is no exception.

“We expect next year to be a landmark year in terms of change for the local retail market and while change can often be seen as a negative, our survey aims to point out the opportunities that retail entrepreneurs can seize in this context,” Penney said.

Ruggiero said a business’s growth is ultimately dependent on its ability to engage and satisfy its customer base.

“This can be achieved by the implementation of business strategies but the effectiveness of these need to be measured to ensure they are working. Seeking professional and independent advice around the best strategy for your business is often a good place to start,” he said.

Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.