In 2020, the coronavirus pandemic dramatically upended the retail landscape in Australia and around the world.

Retail experts IRI’s FMCG Outlook Report , released this week, looks back on the major consumer trends of the past year and those that are set to stay in 2021.

They include the online shopping boom, the rise of ‘own-brand’ products and shoppers’ desire for sustainability as the threat of climate change grows.

“Never before have we witnessed so much change in the FMCG [fast moving consumer goods] sector within such a short period of time,” said Alistair Leathwood, IRI’s chief commercial officer for Asia Pacific with IRI.

“Not only were Australians hit with destructive bushfires, we also experienced floods and then a life-changing pandemic. Within a matter of months, COVID had permeated the planet and affected every aspect of society.”

The pandemic forced a “rethink” of “how we socialised, shopped, lived and worked”, Mr Leathwood said.

“For some the reset was an opportunity and for others, a challenge – but all in all, 2020 has proven to be a great leveller as well as a major disruptor”.

Three themes that will continue in 2021

The report highlighted major themes that emerged during the pandemic and will continue in 2021.

Chief among them is the acceleration of eCommerce.

Online sales have surged due to COVID-19, with Australians spending a total of $27.9 billion online from September 2019 to August 2020.

This represents $8.1 billion in online sales growth, surpassing the prior two years combined.

Many also started doing their grocery shopping online, with a 9.4 percent increase of Australian households purchasing groceries online from the nation’s two supermarket giants Coles and Woolworths between August 2019 and July 2020.

The next major theme was the push for more sustainability as the spectre of catastrophic climate change looms larger.

Australians are hugely concerned about climate change – and those that weren’t could not help but be swayed by the bushfire impact,” the report said.

Over the last four years, almost six in 10 of us continually expressed intent to purchase environmentally friendly products, research showed.

The pandemic further highlighted “the link between FMCG and the communities it serves, as well as the fragility of personal and environmental health,” the report said.

Increased at-home consumption “means household waste footprints are even more confronting as we wade through over-packaged online orders and single-use products such as coffee cups and cutlery”, it said.

The legacy of 2020 is that doing the right thing has never been more important, and sustainable innovation will be at the forefront of FMCG in 2021,” Mr Leathwood said.

The third major trend highlighted by the report was the “pull power” of private-label products, sometimes referred to as ‘own-brand’ or ‘home brand’ products.

Once the poor cousin of name brands, Supermarket private label products have become popular choices among shoppers, offering good quality at prices that undercut the competition.

Popular own-brand offerings are now critical to success for supermarkets, accounting for a large portion of shelve space and profits.

In 2019, Coles added 1200 private label products to its range, with private label items comprising around 30 per cent-and-growing of of the chain’s’ sales.

Related: Aldi, Coles or Woolworths? How the supermarkets’ own-label staples rate

Woolworths also boasts shelves lined with their own label products, positioning its Macro Organic range to promote itself as Australia’s healthiest supermarket own brand, the report found.

German discount chain Aldi has also been embraced by Australian shoppers for its budget-priced private label products.

it’s a trend that shoppers can expect to see much more of.

Australia’s first recession in three decades is “likely to encourage greater consumption of private label offerings by value-conscious Australians”, Mr Leathwood said.

“Sixty-one percent of Australians say private label products are a good alternative to branded products.”

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Savers are losing more of their spending muscle after two major banks dropped the weight on their savings rates.

Both Commonwealth Bank and ANZ on Friday reduced their conditional savings rates to 0.40 per cent (matching the other big four banks), while ANZ also reduced its Online Saver introductory rate by 10 basis points.

It continues the banking sector’s savings grind in 2021 with 42 providers slashing at least one rate on their books, according to RateCity.

RateCity research director Sally Tindall told The New Daily depositors with a savings rate below 0.9 per cent need to recognise they are effectively losing money.

That’s because those rates are sub-inflationary, which means their cash won’t keep up with economic growth unless they switch.

They’re on a treadmill going the wrong way,” Ms Tindall said.

But the diminishing returns will likely get worse as banks drag savings rates down further to claw back profits from a raging home loan war.

“There are only 18 accounts still offering a rate above inflation, which is a good benchmark in this environment, but we’ll probably be able to count these rates on two hands in six months’ time,” Ms Tindall said.

However, there are alternatives to squeeze more out of your money – and finding one can be less exhausting than an afternoon workout.

Step 1: Address your weaknesses

Like many who hit the gym after setting a New Year’s resolution, many savers fall into a laziness trap because they don’t have the time or energy to find a better rate, Ms Tindall said.

RateCity’s Ms Tindall said those who crave the security of a guaranteed banking deposit (up to $250,000) but have rock-bottom returns need to switch to a better performing account, which is generally cost-free.

“The lowest savings rates are as low as 0 per cent and in some cases as high as 1.35 per cent, so it’s still worth shopping around if you still want to put your hard-earned cash into the bank,” she said.

For savers under 30, they can net rates as high as 3 per cent as the banks lure younger customers with premium returns.

But they need to be wary. Some providers have account fees that can cancel out the benefits of high-interest accounts.

Fitzpatricks adviser Randall Stout told The New Daily savers may need to dabble in more risk if they want to act on their savings weakness.

If you look to America where they have incredibly low savings rates, you see it’s translated into more people investing because, otherwise, it’s just lazy muscles doing nothing,” Mr Stout said.

Step 2: Goal setting

Beyond Today Financial Planning director Antoinette Mullins said households can get a better idea of how they want to maximise their returns by pulling together the financial equivalent of a workout plan.

Families should dedicate an hour to talk about their values and when they require access to their cash to see how passive income plays a role, she said.

“I’d recommend sitting down with your partner over a glass of red wine, have some easy-listening music in the background and just talk about what’s important to you,” Ms Mullins told The New Daily .

“And often it comes back to what childhood you had – do you want to go on family holidays like you did as a kid – do you want more family time so you need more passive income, or do you want to retire early?”

Once those values are known, then families can craft goals that can be aligned with their future investments.

Step 3: Exercise your money harder

Now, it’s time to figure out if a financial cardio session or some fast-paced weightlifting is best-suited to your outlook.

Ms Mullins said households working in a short timeframe can look at defensive investments, like a cash fund or an exchange traded fund (ETF), which gives them more stability over other assets including shares and property.

Many savers are effectively losing money if they don’t act on rock-bottom rates. Photo: Getty

She also said mortgagees can consider redirecting cash into an offset account, where the costs saved on interest out-flex savings returns.

“Mortgage rates are currently between 2 to 3 per cent, so if you own a home and your home loan has an offset facility, that’s an amazing place to park your rainy day funds,” Ms Mullins said.

For example, those with a home loan of $100,000 but have $10,000 parked in an offset account will effectively only need to pay interest on $90,000.

Mr Stout said fixed-interest funds, such as corporate bonds, can still pay out 3 to 4 per cent returns.

Salary sacrificing can be an option for younger workers, he said, so long as they are content with that money being locked until retirement.

But he said households need to be willing to run a marathon to bulk up their wealth, noting that many families were spooked by the Australian sharemarket’s 37 per cent fall at the height of the pandemic.

“You’ve got to be willing to invest for at least three to seven years so your money works for you,” Mr Stout said.

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Owners of Hyundai Tucsons up to six years old have been told to park the vehicles in an open space away from garages and flammable materials due to fears a manufacturing error could lead to the car’s engine catching fire, even when the vehicle is turned off.

A recall notice issued by the Australian Competition and Consumer Commission on Thursday said the electronic circuit board in the Anti-Lock Braking System module may short circuit when the components are exposed to moisture.

It warned owners of Tucson models made from 2015 to 2021 to park affected vehicles in an open space away from flammable materials and structures, such as garages, and wait to be contacted.

To prevent power surge and eliminate the risk of fire, a relay kit will be installed on the circuit board free of charge by an authorised Hyundai dealership.

The ACCC said more than 93,572 vehicles were affected by the recall.

The recall notice states the risk of engine fire remained even when the vehicle was turned off, as the circuit is constantly powered.

“This could increase the risk of an accident, serious injury or death to vehicle occupants, other road users and bystanders, and/or damage to property,” the ACCC recall notice states.

However, the short circuit does not impact the functioning of the ABS.

Hyundai says its cars are still ‘safe to drive’

A spokesman for Hyundai Australia said the vehicles were still “safe to drive”.

“We have had no incidents of fire in Australia related to this Tucson issue,” he said.

“The recall is a precautionary and voluntary measure to ensure the safety of our customers – which is of the utmost importance to Hyundai.

“As an added precaution, Hyundai recommends parking these vehicles outside and away from structures until the recall remedy is completed.”

He said if customers had any questions about this voluntary recall, they should phone Hyundai Customer Care on 1800 186 306.

In relation to other Hyundai model vehicles, he indicated there were no defects identified at this stage.

“We have recalled the Hyundai vehicles where we have identified a safety-related defect,” he said.

“We are constantly evaluating data from a variety of sources and won’t hesitate to conduct or expand a recall when we determine one is necessary to protect the safety of our customers.”

Hyundai is not the first car manufacturer to face recalls, with other manufacturers having to issue recalls related to faulty airbags and other problems.

In 2020, Toyota, Mazda and Suzuki issued voluntary recalls of more than 18,000 vehicles manufactured between 1996 and 1999 fitted with potentially deadly Takata NADI 5-AT airbags.

And in April 2020 more than than 45,000 Toyota vehicles were recalled over concerns a defective fuel pump could increase the risk of crashes.

-ABC

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Jeff Bezos has announced he will stand down as chief executive of Amazon in the third quarter of 2021. The founder of the online retail behemoth will hand the reins to Andy Jassy , who currently leads Amazon’s cloud computing wing.

The announcement comes after an enormously successful 2020 for Amazon despite (or perhaps because of) the COVID-19 pandemic, with operating cashflow up 72 per cent from the previous year to US$66.1 billion, and net sales increasing 35 per cent to US$386.1 billion.

Amazon has its share of detractors, with critics highlighting concerns around working conditions, tax minimisation, anti-competitive practices and privacy. But its enormous size and continuing phenomenal growth make it a force to be reckoned with.

• Related: What is next for Jeff Bezos, and who is Amazon’s new CEO Andy Jassy?

How did Amazon get to this position, and what does the future hold under new leadership?

How it all started

Almost 27 years ago, in 1994, Bezos left his job as a senior vice-president for a hedge fund and started an online bookstore in his garage. At the time, using the internet for retail was in its infancy.

Bezos decided that books were an ideal product to sell online. Originally the new business was named Cadabra, but Bezos soon changed it to Amazon and borrowed US$300,000 from his parents to get things off the ground.

Books proved popular with growing numbers of online buyers, and Bezos began to add other products and services to the Amazon inventory – most notably e-readers, tablets and other devices. Today Amazon predominantly makes its revenue through retail, web services and subscriptions.

The rise and rise of Amazon

Amazon is now one of the most valuable companies in the world, valued at more than US$1.7 trillion. That’s more than the GDP of all but 10 of the world’s countries. It’s also the largest employer among tech companies by a large margin.

The key to Amazon’s dominance has been constant expansion. After moving into e-readers and tablets, it extended more broadly into technology products and services.

The expansion has not yet stopped, and Amazon’s product lines now include media (books, DVDs, music), kitchen and dining wares, toys and games, fashion, beauty products, gourmet food and groceries, home improvement and gardening, sporting goods, medications and pharmaceuticals, financial services and more.

More recently Amazon has expanded into bricks-and-mortar, heralded by its purchase of the Whole Foods chain in 2017, the creation of its own high tech stores such as Amazon Go , and its sophisticated distribution and delivery services such as Amazon Prime .

Amazon has become increasingly vertically integrated , meaning it no longer simply sells others’ product but makes and sells its own. This gives the company a position of extreme market dominance.

Criticism

Amazon is hugely popular with customers, but has attracted criticism from supplier advocates, workers unions and governments.

Industrial relations matters, such as fair wages, unsafe work practices and unrealistic demands, appear the most common area of concern. A 2019 UK report found:

Amazon have no policy on living wage and make no mention of wages being enough to cover workers’ basic needs in their supplier code.

Other concerns relate to alleged unsafe working conditions and “whistleblower” policies .

In March 2020, as COVID-19 began to take hold, workers claimed they were fired for voicing concerns about safe working conditions. Amazon vice president and veteran engineer Tim Bray resigned in solidarity and nine US senators issued an open letter to Bezos, seeking clarity around the sackings.

More general criticisms of the company culture have surfaced over the years, relating to insufficient work breaks, unrealistic demands, and annual “cullings” of the staff – referred to as “purposeful Darwinism”.

Another strand of criticism relates to Amazon’s market size and antitrust laws. Antitrust laws exist to stop big companies creating monopolies. Amazon presents a challenge, as it is a manufacturer, an online retailer, and a marketplace where other retailers can sell products to consumers.

Privacy concerns have also plagued Amazon products like Echo smart speakers, Ring home cameras, and Amazon One palm-scanning ID checkers.

The Amazon Web Services privacy policy says all the right things.

Finally, the amount of company tax Amazon pays in Australia has been brought into question. The company has used a range of tactics to legally reduce the income taxes it pays around the world.

What does the future hold for Amazon post-COVID?

What will change at Amazon when Bezos steps down? We’re unlikely to see a dramatic shift in the short term. For one thing, Bezos is not departing entirely – he will stay involved as “executive chairman”. For another, his successor, Andy Jassy, has been with Amazon since 1997.

Jassy is the head of Amazon Web Services (AWS) and already one of the most important people in the tech industry. AWS has been at the forefront of simplifying computing services, driving the cloud computing revolution and influencing how organisations purchase technology.

Jassy’s long history, intimate knowledge of the organisation, and technological expertise will no doubt stand Amazon in good stead.

However, he faces a monumental undertaking. Jassy will inherit responsibility for more than a million employees, selling millions of different products and services.

His expertise in AI and machine learning at AWS will be increasingly important as these play a greater role in Amazon’s operations – for everything from optimising warehouses and giving better search results to business forecasting and monitoring warehouse staff and delivery drivers .

The physical lockdowns and online acceleration driven by the COVID-19 pandemic provided the ideal conditions for a company that has been called “ the everything store ”. Supporters and critics will watch with interest to see if this is still true in a post-COVID environment.

Louise Grimmer , Senior Lecturer in Retail Marketing, University of Tasmania ; Gary Mortimer , Professor of Marketing and Consumer Behaviour, Queensland University of Technology , and Martin Grimmer , Professor of Marketing, University of Tasmania

This article is republished from The Conversation under a Creative Commons licence. Read the original article .

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Australia’s buy now, pay later giants are in the crosshairs after the British government announced new regulation to protect shoppers from falling into substantial debt.

And analysts say it could lead to more checks and balances in Australia – despite the local industry, corporate regulator, and federal government all opposing formal regulation.

The UK Treasury’s Woolard Review , launched after the use of buy now, pay later rose fourfold during the pandemic, found the payment platforms helped consumers manage their spending.

But with one in 10 users falling into arrears, the review said there was an urgent need for new protections.

In response, the UK Treasury recommended new laws that put the firms under the watch of Britain’s financial regulator and require detailed affordability checks similar to those carried out when banks hand out credit cards.

Afterpay’s British subsidiary, Openpay, as well as Zip and Klarna – which is 5 per cent owned by Commonwealth Bank – all backed the regulatory change, saying it was a “positive step” for responsibility and financial wellbeing.

Tweet from @hmtreasury

The move follows calls from consumer advocates in Australia to classify the short-term, interest-free products as a form of credit, after ASIC found one in five BNPL users cut down on essentials in order to afford their repayments.

But so far those calls have fallen on deaf ears.

Instead, the Australian BNPL industry proposed a voluntary code of practice to be introduced in March.

The industry says this will offer greater assistance to struggling customers, in the form of mandatory assessments and a proper complaints process.

But Financial Counselling Australia CEO Fiona Guthrie is unconvinced.

Ms Guthrie told The New Daily that although BNPL players say self-regulation goes far enough to protect users, there is “no substitute for proper regulation”.

But she believes policymakers in Australia will only take independent regulation seriously if more consumers suffer financial harm.

“We’re already seeing the impacts of this on the frontline. We’re seeing it in our casework. We’re seeing people who have got BNPL debts they’re struggling to pay and it’s causing harm,” Ms Guthrie said.

“We’re not arguing it shouldn’t be there; we’re just saying it needs some guardrails around it.”

A Senate inquiry into Fintech last year argued that a light-touch approach was more appropriate, as it believed strict external regulation would impede the sector’s growth.

“Because innovation like ‘buy now, pay later’ often occurs on the fringes of regulation, it is inappropriate to force each innovation into a one-size-fits-all approach,” the inquiry’s interim report found.

Tweet from @ajamesbragg

In the eyes of Morningstar equity analyst Shaun Ler, the British and Australian models are of a similar “magnitude and severity”, and differ only in who is responsible for enforcement.

As it stands, the industry will self-regulate in Australia and come under an independent regulator’s watch in Britain.

Investors may start asking more questions

With Australian regulators unlikely to follow Britain’s lead, some analysts believe that investors – who are aware that stricter regulation in the future is highly likely – may force the agenda.

IBISWorld senior industry analyst Yin Yeoh said it’s “certainly possible” that shareholders will pressure companies to go further in regulating the industry, particularly in light of recent inquiries in the EU and Canada.

But that will happen only if further evidence reveals the financial harm inflicted on users has increased substantially, he said.

Meanwhile, Australian Shareholders Association policy and advocacy manager Fiona Balzer told The New Daily shareholders would be more likely to lobby companies to improve their self-regulatory code – rather than push for external regulation – as “that’s in the company’s control”.

Curtin University associate professor of finance Shams Pathan, who specialises in shareholder advocacy, said in an ideal world shareholders would scrutinise the ethics behind their investments.

And if they believe a firm’s business model is causing harm, they should step in to protect their investments, he told The New Daily .

“If they foresee a crackdown on them to protect vulnerable consumers, rather than being reactive, they should be proactive and urge the executives to do business more responsibly,” Dr Pathan said.

Afterpay shares became hot property during the pandemic. Photo: Getty

Morningstar’s Mr Ler outlined two scenarios that would make regulation in Australia more likely.

“It could be a collective spike in late payments, something similar to what would happen during a financial crisis without any intervention, but it’s hard to envisage that happening for the next few years,” he said.

“The other is if these operators are caught doing something illegal, such as a money laundering scandal, which we saw Afterpay investigated for a few years ago.”

The Australian Banking Association earlier this week urged Treasury to regulate the sector over fears BNPL platforms could increase the risk of money laundering.

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