Australia’s fashion retail industry is experiencing a significant shift, with several online-first clothing and beauty businesses expanding into physical shops while established retail brands face financial difficulties and store closures.

The changing trend is drawing attention to how Australian consumers want to shop. Although online shopping remains important, some customers are increasingly interested in visiting stores, seeing products in person, trying on clothing and experiencing a brand before making a purchase.

One example is Australian fashion retailer Princess Polly, which has been expanding its physical retail presence. The company has opened stores on the Gold Coast and in Brisbane, following its earlier expansion into Sydney. Its Gold Coast opening at Pacific Fair attracted hundreds of customers, with shoppers arriving early to attend the launch.

Company executives say customers have shown enthusiasm for being able to visit stores and experience products directly. The business sees physical shops as an additional way to connect with shoppers rather than a replacement for its online operations.

The expansion comes at a difficult time for several traditional Australian fashion retailers. Mosaic Brands, which owned labels including Katies, Millers and Noni B, collapsed. Other established businesses, including Cue Clothing Co, Veronika Maine, Betts and Jeanswest, have also entered administration. Country Road Group has reduced its physical retail presence.

The pressure on traditional retailers reflects wider challenges in the industry. Retail businesses are dealing with changing customer preferences, competition, operating costs and uncertainty around discretionary spending. Industry data cited in the report shows that retail insolvency rates have been rising since June 2022.

Other online businesses are also exploring physical locations. Beauty retailers Oz Hair and Beauty and Adore Beauty, activewear brand Kikiva and furniture company Mocka are among businesses that have opened stores in recent years.

Retail experts say the most effective approach may be to combine online and in-store shopping. Physical locations can help customers understand products, interact with staff and develop a stronger connection with a brand. Stores can also create interest that encourages customers to continue shopping online.

However, opening shops brings additional responsibilities, including rent, staffing, stock management and maintaining consistent customer service. Experts caution that online businesses need to expand carefully rather than opening too many locations too quickly.

The trend suggests that physical retail is not disappearing. Instead, the relationship between online shopping and traditional stores is changing. Businesses that understand customer expectations and manage both channels effectively may find new opportunities in Australia's competitive fashion market.