After an extraordinary Black Friday sale providing a much-needed lift to retailers across both sides of the ditch, how did the festive season shape up? Bringing a close to a turbulent and often unpredictable 2024.
The retail sector in Australia and New Zealand experienced significant growth during November and December 2024, driven by strong holiday demand, bumper sale periods, and increased consumer confidence.
According to the Australian Retail Association (ARA), total retail turnover across November and December reached $85 billion, reflecting a 6% increase compared to the same period in 2023.
This growth was particularly pronounced in categories such as:
Electronics and Appliances: Up by 8%, fuelled by early Black Friday promotions and continued demand for smart home devices.
Fashion and Apparel: Increased by 7.5%, with robust sales during pre-Christmas shopping and Boxing Day.
Food and Beverage: Grew by 5.2%, supported by holiday gatherings and increased spending on premium items.
In New Zealand, November retail sales saw a year-on-year rise of 5.3%, while December sales grew by 4.8%. Online channels accounted for a record 20% of total retail sales, reflecting the ongoing shift in consumer behaviour toward e-commerce.
December 2024 was a record-breaking month, with Boxing Day alone generating $1.3 billion in revenue in Australia, an increase of 5% compared to 2023. Consumer confidence fuelled much of the growth in a year that had frequently witnessed the contrary, in addition to changes in spending habits and timeframe to secure key purchases.
While December’s performance was a bright spot, underlying pressures like supply chain disruptions and steep operational costs remained at the forefront for many retailers, who needed to steady themselves following a series of retail lows throughout the year. For consumers, stock availability and fast delivery expectations remain at an all-time high.
As we saw in the previous quarterly report, many consumers bought into the Christmas season early, regulating spending across payment providers such as AfterPay and PayPal. The balance of consumers leveraging the sales to indulge in luxury items, apparel, and lifestyle products.
Retail and Logistics Trends for 2025
The outlook for retail and logistics in 2025 highlights the importance of operational efficiency, robust supply chains, and technological innovation.
The new year will require a strategic focus on warehouse automation, intralogistics, and customer-centric innovations.
Here are the key trends and strategies shaping the landscape:
Warehouse Automation and Intralogistics Warehouse automation and intralogistics systems such as Automated Storage and Retrieval Systems (AS/RS) and Sorting Transfer Vehicles (STVs) are becoming critical for retailers looking to optimise their operations. These technologies improve inventory accuracy, streamline product tracking, and enhance the speed of delivery.
Benefits of AS/RS and STVs:
Increased warehouse density and faster retrieval times.
Improved scalability for seasonal peaks.
Reduced reliance on manual labour, mitigating workforce shortages.
Deloitte’s retail forecast highlights that businesses investing in these systems can achieve up to a 20% reduction in operational costs, enabling them to allocate resources to other growth areas.
E-commerce Growth and Omnichannel Strategies Online shopping continues to dominate consumer behaviour, with the Power Retail report noting a 15% increase in e-commerce sales during the 2024 holiday season. Retailers are increasingly adopting omnichannel strategies, integrating online and offline experiences to meet customer expectations.
Key considerations for 2025 include:
Enhancing last-mile delivery capabilities.
Implementing real-time inventory tracking to ensure product availability.
Leveraging data analytics to personalise customer experiences.
Sustainability in Logistics Sustainability remains a top priority as consumers and regulators push for greener practices. Retailers are exploring eco-friendly packaging, carbon-neutral shipping options, and energy-efficient warehouse operations. Automation technologies like AS/RS and STVs contribute by reducing energy consumption and minimising waste in logistics processes.
Economic Uncertainty and Consumer Behaviour
The economic outlook for 2025 is mixed, with steady GDP growth expected but tempered by inflationary pressures and cautious consumer spending.
Retailers will need to:
Offer value-driven pricing and promotions throughout key periods of the year.
Focus on essential goods and resilient product categories.
Invest in technologies that enhance supply chain agility and reduce costs.
Reflecting on 2024: Lessons for 2025
As retailers evaluate their 2024 performance, several key lessons emerge:
Adaptability: Retailers that successfully navigated supply chain disruptions did so by embracing flexible logistics solutions, including automated systems and diversified supplier networks.
Customer Experience: ARA’s report on Boxing Day shopping indicates that consumers gravitated toward retailers offering seamless, tech-enabled experiences. Ensuring robust digital and in-store integration will be vital in 2025.
Data-Driven Decisions: The rise in data analytics adoption enabled retailers to forecast demand more accurately and tailor offerings to consumer preferences.
Planning for the Year Ahead
Invest in Warehouse Optimisation
Implementing warehouse automation systems like AS/RS and STVs can significantly enhance efficiency and scalability.
Focus on real-time product tracking to boost visibility and reduce errors.
Enhance Delivery Speed and Accuracy
Partner with logistics providers, like Daifuku that offer advanced tracking and fast delivery options.
Optimise last-mile delivery through route planning and micro-fulfillment centres.
Monitor Economic Indicators
Stay agile in response to inflationary pressures by adjusting pricing strategies and managing costs effectively.
The retail and logistics sectors in Australia and New Zealand are poised for transformation. By leveraging warehouse automation, embracing sustainability, and adopting data-driven strategies, retailers can navigate economic uncertainties and meet evolving consumer demands.
The key to success will be the integration of advanced intralogistics systems like AS/RS and STVs, which will ensure robust product tracking, faster delivery times, and optimised warehouse operations. As November-December 2024’s performance demonstrated, adaptability and innovation are paramount for thriving in a competitive landscape.
Connect with Daifuku to begin your automation journey towards a more efficient, scalable future in retail and logistics.
Connect with the Daifuku Team
References
Australian Retail Association (2024)
Deloitte (2024). Retail Forecasts 2025
News.com.au (2024). Economic Outlook for 2025.
Power Retail (2024). 2025 Retail Outlook.
ABC News (2024). Boxing Day Spending and Retail Sales
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