New data from Shopify has revealed that Australian retail entrepreneurs are increasingly leveraging social media-related strategies to attract and retain customers amid declining consumer spend. The data, collected from over 13,000 retail business owners, including over 800 from Australia, explored their priorities, challenges, and opportunities ahead of the peak holiday sales season.

Australian retail business owners were the second most concerned globally about consumer spending levels, with 77% expressing worry, trailing only Spain at 83%. They also expressed the highest level of concern about interest rates, at 66%. However, a significant 33% of Australian retail entrepreneurs remain optimistic about the upcoming peak sales season, compared to 35% who are less optimistic.

Merchants in the Toys & Games sector have the most positive holiday outlook, with 42% expressing optimism, and are equally prepared for business (20%) alongside Food and Beverage business owners. Key strategies for the peak season include expanding into new product areas (31%), improving ROI on marketing spend (30%), reducing operating cost (27%), and expanding into new sales channels (22%).

Social media-related strategies came out as the top approach to attracting and retaining customers in the volatile spending environment, with 70% of retail business owners indicating they will prioritise social media engagement for customer retention, followed by providing exclusive offers and promotions (42%) and enhancing customer service (38%).

Organic social media content (47%) and paid advertisements on social media (32%) ranked as the top two strategies for attracting new customers, with a substantial 72% of respondents citing strategies related to social media, affiliate marketing and influencer partnerships overall.

Meanwhile 63% of retail business owners said they will be leveraging social media platforms for direct sales, 37% of retail entrepreneurs are investing more in digital marketing to reach broader audiences, 28% of retail business owners are shifting focus to more cost-effective products, and 24% are redesigning their marketing messages to emphasise value and affordability.

Meanwhile, 44% of Australian retail business owners have noticed an interest in discounts, and 43% have observed an increase in price sensitivity due to rising cost of living and inflationary pressures. In response, 48% of business owners are adjusting their pricing strategies to remain competitive, while 46% are increasing promotional activities to boost sales.

The use of Artificial Intelligence (AI) is also on the rise among Australian retail entrepreneurs, with 25% using AI for data analysis and insights, and 24% employing AI to automate and streamline business processes. The top industries using Shopify's AI functionality are Toys & Games (31%), Baby & Toddler (23%), and Arts & Entertainment (21%).

Managing Director, APAC at Shopify, Shaun Broughton, said: "As Australian entrepreneurs navigate the current economic climate ahead of the holiday season, it is crucial that they not only deepen their engagement on social media - where their customers spend significant time - but also remain agile in responding to growing price sensitivities. Investing in technologies like AI that drive greater efficiencies while reducing costs, has also emerged as a valuable strategy for improving business readiness."

"Black Friday/Cyber Monday and the broader holiday season present a valuable opportunity for businesses to explore new initiatives and strategies that can maximise reach and help them stand out. Although venturing into new markets or adopting new technologies can be daunting, it is important to think creatively and stay forward-focused."