Why Australian Retail Sales is in the doldrums


The rise of the Micro-Niche Retailer

In today’s current climate talk about Australian retail suffering has been written about ad-nauseum. The reasons are varied, from the Australia population currently saving 12% of their wage as opposed to negative 2% back in 2006, through to online shopping and the appearance of some exceptionally good operators from overseas (think Zara).

What hasn’t been touched upon by the media that will affect retailers far more in the long-term than the issues above is the divergence of tastes.

Back in the 1960s things were more straightforward – you were either a Beatles fan or a Stones Fan.  While these days more and more people are refining their preferences.. you’re no longer just into ‘Hard Rock’, you’re into ‘Norwegian Heavy Metal’ and refuse to listen to other forms of Rock. You’re not just into electronic music but more specifically ‘Post-Minimal German Tech Dub-Step’.

Apply this rule to retailers and you can see one of the reasons Australian retail is lackluster at best.

Three of the bigger niche retailers; Kathmandu, Super Cheap Auto and Ray’s Outdoors have been defying the retail gloom and doing well considering the circumstances of others in the industry.

However there is a whole industry of micro-niche stores that are popping up, both in traditional bricks and mortar and online, that are slowly eroding other retailer’s markets.

Take for example these micro-niche retailers that cater to a very specific market.

Kite Board Australia Kitepower.com.au  – 10 years ago this would have been within a Surf Dive n Ski.

Train World – Model train shop Trainworld.com.au  This would have been incorporated within a hobby shop.

Totally Reptiles- This shop only sells reptiles and amphibians, not a cute kitten in sight! Check their Facebook page out...

Heidelberg Lawn Bowls Shop Melbourne Bowls  Nothing but items specifically for Lawn Bowls- not ten pin bowling, not cricket (unless you’re an umpire) just lawn bowls.

Minotaur is the grand daddy of the micro-niche store, the original super-store catering to a previously forgotten about niche; Star Trek, Comic Books, Graphic Novels and hard to find DVDs have been a feature of this store for at least 15 years. Minotaur.com.au I queued last Christmas for 20 minutes to buy some comic books for my neighbours kids- I haven’t queued in a shop forever (I’m not an Apple fan).

This is just a very small selection of some of the thriving niche shops that are catering to their crowd of devotees. They are typically run as a small business, know their products inside out and know their customers by name.

It’s kind of like shopping in the 1960s corner store except it isn’t a milk bar, it’s a shop selling Bearded Dragons, or Manga, or even a shop selling Henselite Speckles (a type of bowling ball).

This new style of retail outlet isn’t trying to cater to the masses- in fact I doubt most people even know they exist. But for the people passionate about their hobby it is the centre of their retail experience. Word spreads amongst their select community and if the retailer can provide good old fashioned service with great products and knowledge, they won’t even need to resort to the usual sales tactics and discounted sales.

What, retail with NO SALES?!?

Not only are the niche retailers not as price sensitive, but due to their desirability amongst fans they don’t even need an amazing High St. location. Some of the stores I’ve been to have been in old milk bars, down side-streets and in basements and warehouses.

As these micro-niche retailers are small businesses it is impossible to know their percentage of the retail spend but I do know one thing – people’s tastes and interests are becoming more niche oriented and more sophisticated.

This is one of the multitude of reasons why big box retailers will be doing it tough in the long-term.

Small Business Ideas - 19 Aug 2011 - by Rob Jennings

About Rob Jennings

When he found himself embroiled in a conversation with someone talking about their ‘customer-centric core competencies’ he realised it was time to create a Web Design Agency that was less about self promoting buzz-words and more about people and giving them the tools to understand the web.

The idea behind We Push Buttons was to create an environment where business owners can learn about building their organisation, whether it be with an outstanding website, SEO or any other marketing ideas. Coming from the art industry and online retail background he knows first hand the needs of growing a business in a tough environment.