The return of the retail apocalypse

A few years ago, everyone was very concerned about a “retail apocalypse”. Shopping centres in the US were failing at an astonishing rate, and the UK high street was entering what’s become a prolonged bloodbath. Heritage retailers, well-known to consumers and with plenty of brand equity left, were going under, and even people in my personal life were asking questions like, “Is retail dying?”

In the context of the possibly-impending mallpocalypse, the answer to that question was an easy “No.” Or more accurately, “Not here.”

When I discussed the matter with Kiwi Property’s then-CEO Chris Gudgeon in 2016, he pointed out that, judging by floorspace per capita of enclosed malls, the US then had around five times more mall space than New Zealand does, and Australia has approximately double.

“So on that stat, New Zealand is not over-provided. It’s when you get oversupply that you can confront issues, and I think possibly that’s been the case in the US. They’ve been oversupplied.”

Similar explanations applied to the high street problems in the UK. While New Zealand commercial landlords have been putting the squeeze on retailers in much the same way as their UK counterparts, Brits have adopted ecommerce at a little over twice the rate of Kiwis, and their more established big-box precincts suck consumers out of CBDs more efficiently than ours.

Sure enough, New Zealand retailers have been performing okay until now. With an average margin of around 3.7 percent, it’s not gravy, but the number of struggling Kiwi retailers hasn’t been significant cause for alarm.

Thanks to the sales famine brought on by Covid-19 and lockdown, however, that retail apocalypse narrative is back with a vengeance.

This time, consumer concern is not just based in international trends - it’s obvious to all that beloved local retailers really are in trouble this time, even the big names like Smiths City.

Some retailers are fighting back by displaying some of that famous Kiwi ingenuity. Initiatives like TheMarket’s DriveThru click and collect points (so clever!) and the pivot to mask-making by local manufacturers like Hill’s Hats and Cactus Outdoor (who also launched a new website) are catching consumers’ eyes and providing retail excitement in a time when non-ominous news is thin on the ground.

It’s a stressful time for everybody, and probably the last thing retailers want to do is take the time to cook up risky and expensive schemes.

Even though most would rather hunker down and start experimenting when the Covid-19 storm is over, it’s worth keeping in mind that shoppers are really looking for a reason to celebrate New Zealand business right now. 

If your intended stunt grabs headlines for the right reasons, you’re not endangering anybody in the process, you’ve carefully budgeted for the investment and your systems have the capacity for a flood of business, I say give it a go.

There’s a line made famous by US retail consultant Steve Dennis in those retail apocalypse years, and it goes something like this: Retail isn’t dying. But boring retailers are.

If the explosively popular ‘New Zealand Made Products' Facebook page, which gained 46,000 followers in a single day, is anything to go by, Kiwi shoppers are poised and ready to support exciting local retailers in the post-Covid recovery. 

Now’s the time to reach out and show them what you’ve got.

Sarah Dunn is a B2B content marketing specialist and former award-winning magazine editor. If you’d like help telling your business’s story, you can find her at https://www.sarahdunn.co. Cite ‘Retail apocalypse’’ for 5 percent off your first project.