How is the retail business shaping up in Australia? And how can we connect with the baby boomers? Top demographer Bernard Salt shares his predictions. And it’s good news…

Retail is a diverse sector offering plenty of opportunities for business development, particularly if the sub-sector is chosen carefully.

“My view is that the Australian people are connected into lifestyle. Anything associated with lifestyle so caf_, bars, restaurants,” says Bernard Salt of KPMG. He also highlights technology and anything associated with health and wellbeing. “So yoga, for example or Rhine river travel, reward travel for instance. Succession planning, financial planning would also be another business to be in. 

“There are all sorts of opportunities regardless of what the economic environment might seem to be, there are always opportunities in retail somewhere in Australia.” 

A positive future 

It’s interesting that the Franchising Australia 2014 report indicated that retail has revealed hidden strengths, with greater growth than any other sub-sector of the franchise industry. 

The latest bi-annual report from the Asia-Pacific Centre for Franchising Excellence showed retail models increased the media number of units from 45 to 49 in 2013. 

And the newest entrants into the franchising arena have in the majority emerged from the retail scene. Almost one third of franchisors are involved in the non-food retail sector, while another 18 percent are engaged in hospitality service. 

Just five percent of total sales are conducted through online channels – most of these in retail franchises.

Retail franchises reported median sales turnover of $33m in 2014, according to the Franchising Australia report. And it is not just here that we are seeing growth. In the US franchise businesses are set to grow and create more jobs at a faster pace than the rest of the economy this year, according to The Franchise Business Economic Outlook: 2015, released in January by the International Franchise Association Education Foundation and HIS Economics. 

The report indicates that quick service restaurants and retail businesses will be the top two franchise sectors in America for increased employment. 

We are seeing what Salt believes to be quite positive economic trends. “Low interest rates, record levels of population growth, it’s eight years since the GFC – it’s time to move on. The Great Depression did not last eight years,” he reminds us. Australians are ready to leave behind the austerity of the past, he suggests. 

Certainly the Westpac Melbourne Institute Index of Consumer Sentiment showed a rise of eight percent from 93.2 points in January to 100.7 points in February. Anna McPhee, CEO of the Australian National Retailers Association said in early February, “It’s clear the highest consumer confidence reading in more than 12 months has been boosted by the RBA’s decision to cut rates earlier this month, the decision by the banks to pass on, coupled with lower petrol prices and positive share-market performances.” 

Seniority rules 

But perhaps the growth in retail will come from new and emerging areas of business? We have an ageing demographic and our seniors will become a significant segment of the population, demanding goods and services that answer their needs. 

As is pointed out by the US based Early to Rise website, the baby boomer trend is a wealth opportunity. The website refers to the self-absorption of baby boomers: a view held by Cheryl Russell, the author of The Master Trend: How the Baby Boom Generation is Remaking America. Russell highlights that what is important is to understand how our senior citizens think and feel as the first stage to predicting what they will be buying. 

This is a generation that wants to feel young again, the article suggests.   

Salt’s view is that health concerns and products or services that ease ailing bodies have great potential. “The baby boomer market now moving into their 60s, and by the end of the decade into their early 70s, will create an extraordinary market for pharmacy, for health for wellness or wellbeing, for the concepts of reward travel; grey nomadism, if you like. But they will call it eco travellers or adventure travelling,” he says. 

“This concept of baby boomers moving into this fun or reward, re-partnering stage of the lifecycle; so senior fashion might be important, or senior sociability, anything to do with that I think will do well over the next decade.”  

You can view the full interview with Bernard Salt here.