The Future of Retail: R.E.T.AI.L in 2025 and Beyond, Five Imperatives to Win (Boston Consulting Group)

Summary

• In Australia, 9 in 10 households now shop on Amazon, Temu and Shein, spending $1,600 annually on average.p.5
• Amazon is a top-5 non-food player and on track to represent 20% of the Australian retail online market by 2030.p.5
• Temu, launched less than three years ago, now matches national retailers such as Mecca, Officeworks, Rebel Sport and The Iconic in customer reach.p.5
• Australian retailers face five disruptive forces: e-tailers, a more diverse shopper base, stagnating productivity, rapid AI adoption and changing employee expectations.p.4
• For the first time in history, retailers serve six active generations, from Baby Boomers to Gen Alpha.p.7
• Three in four customers expect a personalised experience across digital platforms, but 60% say they felt frustrated when they received irrelevant content or offers.p.8

Key insights

1. Shoppers engage with e-tailers up to 1-2 hours per week.p.5
2. Ultra-cheap offers resonate with cost-conscious consumers during the cost-of-living crisis, and quality concerns do not deter purchases.p.5
3. Temu and Shein's top categories are those where consumer spend is declining more broadly, suggesting shoppers are trading down.p.5
4. Retailers should either compete on price or build another differentiated customer value proposition, and invest in end-to-end supply chain.p.6
5. Gen Z's largest online category is fashion, and younger cohorts are more willing to switch brands for faster delivery.p.8
6. The report sets out five imperatives: respond to e-tailers, embrace the next-gen shopper, thrive with productivity improvements, turbo-charge retail with AI, and lead differently in the new workplace.p.4