For Australian retailers, it’s not just Santa Claus coming to town this year
Founder and managing director of Edible Blooms Kelly Jamieson. Picture: Supplied.
Local retailers are busy preparing for Amazon's arrival as well as Christmas.
Consumers may have only just started noticing Christmas decorations in department stores and carols playing as they do their grocery shopping. But for Australian retailers, the Christmas preparations started many months ago.
It looks like all their hard work will pay off, with Xero's Small Business Insights report released today revealing both online and physical retailers are in good shape for Christmas this year. For Christmas 2016, a total of 61.1% of retailers were in the black, meaning they had positive cash flow and were bringing in more than they were spending. Forecasts from KPMG suggest this will rise to 62% this year as the health of the sector continues to improve. This is in comparison to 54.6% of all Australian small businesses being in the black for Christmas 2016, signalling local retailers are ahead of the pack.
The Xero Small Business Insights report revealed that hiring of casual employees among Australian retailers eased in December 2016, growing 2.27 percent between November and December. This is a much smaller rate than previous years. However, KPMG forecasts this will rise in 2017, as retailers recover from the impact of the end of the mining boom.
Founder and managing director of Edible Blooms Kelly Jamieson said they started preparing for Christmas in the middle of the year, to ensure there's enough stock available for the Christmas rush and enough casual staff to help facilitate the orders. Jamieson said staff numbers usually increase from around 50 employees across seven locations, to over 80 to keep up with the demand. "Normally, across Australia and New Zealand, we deliver an edible bloom every two minutes. At Christmas, it's every twenty seconds."
“Every Christmas, we debrief with all of our store managers, make a list of what worked and what didn’t, and figure out how we can improve for next year. We’ve done that for 12 consecutive years. I can confidently say that every year we get a little bit better – I don’t think you ever get it perfect, but with the busy periods it gets a little easier," said Jamieson.
However, it's not just Christmas that local retailers are preparing for this year, with global retail giant Amazon set to launch in Australia any day now. Jamieson sees Amazon's impending arrival as an opportunity for Edible Blooms and says she’ll look to Amazon as a new distribution channel to reach consumers faster than before.
This attitude is in line with around half of all other local businesses. According to a report by InsideRetail released earlier this month, 62% of micro businesses, 56% of small businesses and 53% of medium-sized businesses said they saw Amazon's arrival as an opportunity to grow. However, an MYOB report released in October revealed 43% of Australian retailers are expecting a drop in revenue following Amazon's launch here.
To prepare for Amazon's arrival Xero suggests local retailers work to improve their customer service, make sure their service is highly personal and also speed up product delivery times as much as possible, and to get started right now. "Waiting until Amazon launches means you’ll be playing a dangerous game of catch-up," Xero's report read.