Australia’s retail sector is helping lead the country out of the economic impacts of the pandemic.
We saw how resilient we are when it comes to consumer spending and adopting new technologies. We also saw a paradigm shift in how Australians engage with the retail sector, and how retail is adapting to this change to engage with consumers.
However, some challenges retailers are still facing, and have blown out of our control. With the election now behind us, it is time for the government to focus on the lingering issues that continue to affect businesses, employers, workers and consumers.
A two-year hiatus of Australia’s migration scheme left significant gaps in the nation’s skills pool. Large companies to small businesses have struggled to find staff without the ability to source overseas talent or working-holiday and student visa holders. This shortage has constrained several business’s ability to operate at full capacity.
The competition for workers is adding upward pressure to the cost of living and for the Fair Work Commission to increase the minimum wage to match. The cost-of-living crisis we find ourselves in has been driven by a decade of slow wage growth. A wage increase will provide financial relief for some workers, but in many cases the cost burden rests on employers. Some businesses are simply unable to pass wage hikes to their employees. Others are concerned by the repercussion of jacking up already inflated consumer prices to cover the cost.
Inflation has highlighted the failures of the global supply chain, revealing persistent issues with the manufacture and movement of goods. The bottleneck has affected every single part of our economy and will take years to sort out.
But, out of crisis comes opportunity. The essentials of retail remain strong, but there are elements of making our future secure, a new way of seeing and doing things, that need to be explored.
The key takeaway we have learned from the past two years is that consumers are increasingly more reliant on technology and digital platforms, having tried and adopted new ways to shop. We are already using digital tools for tax, compliance, cash flow, invoicing and online payments and project and inventory management. Yet to compete on the global scale, Australia must innovate its digital capacities and train a tech-focused workforce to capitalise on new opportunities in emerging consumer and technology trends.
Tech innovation is also our answer to the drop in productivity. Lifting wages without increasing productivity, for example, will only stroke inflation. At the moment, not much is clear on what is happening in terms of productivity. Measures that boost productivity, such as childcare and vocational training, should be a high priority for the government. This is why we’re assembling an industry roundtable in Melbourne later this month to discuss industry requirements in digital innovation and infrastructure. Learn more here.
The government also needs to expand existing programs that provide access to vocational training and career pathways to people outside of the typical retail-worker demographic of 18 to 25 year olds. Retail can be a purposeful career, and we should look to invest in the right people with a focus on technology and automation.
To get inflation back to a level that is sustainable, an increase in digital capabilities is the way forward with a unified response that captures intelligence, flexibility and insights. This will require significant investment, but once digital adoption gathers speed, the impacts will be immediate and meaningful.
The National Retail Association looks forward to continued collaboration between the sector and government to iron out these inefficiencies and provide continual improvement across the sector, helping secure Australia’s economic recovery and better prepare us for the future.