Australian Online Retailers are Flying Blind

Australian retailers are inexperienced, under-resourced and under pressure to compete with global online businesses, according to the findings of the AIMIA Online Retailing Insights Research study.

A report released by the Australian Interactive Media Industry Association (AIMIA) suggests that Australian retailers want to invest in their digital and online strategies, but are trying to do so with bricks-and-mortar style systems, supply chains and people.

Rob Wong, chair of the AIMIA Retail Industry Group and Managing Director of CC Media iNC Network said, “Our research looks at tracking what Australian retailers themselves are doing about adopting and evolving their ‘omnichannel’ offering.”

“This year’s research shows, as expected, growing adoption rates across the board for interactive, digital and e-tail services as retailers reorganise resources to focus more attention on the digital consumer, but also highlights the internal resourcing and culture barriers that are hampering more rapid successful implementation.”

In other words, Australian online retailers aren’t lacking for enthusiasm and engagement with their online businesses, they are simply not experienced enough to implement their higher-order, online-specific business strategies at a pace fast enough to compete on a global level.

“The stark reality for the industry is there is precious few senior experienced ‘client side’ personnel in Australia – meaning most retail organisations are learning as they go,” Wong said. “This places Australian retailers at a disadvantage, when e-tail experienced international retailers enter Australia – either directly through stores or simply through online marketing to Australian audiences.”

In this case, the study highlights just how much the Internet is changing the way that retail is ‘done’. No longer does a brand need to have a physical outlet in our country in order to be able to sell to Australians. There is less incentive for business professionals to be recruited into local companies as well, meaning that the flow of practically knowledge and expertise isn’t as easy to glean as it once was.

“While several retailers are moving towards dedicated internal resources, there is still a lack of sufficient expertise,” said Wong.

Other key findings from the research include: 

  • Mobile technology is being used to make customer interactions easier. Retailers believe the link between mobile and social media is important, as consumers also access social media from their smart phone, but do not have highly developed strategies yet
  • Online stores are fast becoming top-performing stores, with leading multichannel retailers measuring the success of their retail stores relative to their online store
  • Online sales in the majority of cases confirm that online retail’s share is less than 5%, however smaller retailers are recording a much higher sales share. 33% of retailers with 100+ stores do not know how much online sales contribute to their total sales revenue, which suggests it is not significant
  • Savvy retailers are looking to recruit multichannel directors/managers, and are also attempting to create cross-functional teams. Sometimes, a stand-alone unit had been created within the organization, but often the structure remained within the marketing team. However, this is shifting, as more retailers manage their online strategy across multiple departments
  • Online strategy is driven primarily by senior management, with an abundance of external resources being used – 26% of retailers rely on agencies, and 31% use external technical support
  • 83% of retailers will spend more in online in the next three years – there is clear evidence from this study that retailers will be spending more on capital development as well as marketing. Email marketing, SEO and online catalogues are considered to be the most important tools for advertising and promotion in 2012/13

These annual research findings were facilitated by AIMIA in conjunction with the Australian Centre for Retail Studies. For those online retailers seeking the right business partners to aid with online expansion strategies, look no further than Power Retail’s Solution Providers directory.

How do you feel about your business’s online strategy? Are you confident, with a clear path to success, or are you flying blind?

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