Australia in Top Three For Digitally-Influenced Retail Sales

By Sam Gopal | 21 Jul 2015

Forty percent of retail bricks-and-mortar visits in Australia are influenced by digital engagement, behind the US at 49 percent and Canada at 41 percent.

Australia is behind only the US and Canada in terms of digitally-influenced retail sales.

Deloitte has released its latest report, Navigating the new digital divide – digital influence in Australian retail, revealing digital interactions influenced 40 percent of in-store retail visits in Australia in 2014.

The report examined the influence of digital devices on Australian consumers’ shopping journey and how the ‘digital influence factor’ is changing how they shop and make decisions in-store.

Deloitte defines ‘digital influence’ as the percentage of traditional bricks-and-mortar retail visits affected by shoppers’ use of digital devices before or during the shopping trip.

According to the report, in terms of digitally-influenced retail sales, Australia comes in third (40 percent) behind the US (49 percent) and Canada (41 percent), but ahead of Germany (30 percent), The Netherlands (30 percent) and the UK (27 percent).

Deloitte partner and retail industry leader, David White, said Australia should follow the same trend as the US where such behaviour has multiplied four times over the last three years, expecting digital to influence the majority of retail in-store visits in Australia within the next few years.

The Deloitte report also identified a growing digital divide where consumers’ digital behaviours and retailers’ ability to deliver on those consumer expectations continue to diverge.

“The findings should be a wake-up call for the retail sector which is at risk of underestimating local consumer appetite for digital engagement,” White said, believing retailers should prioritise evolving their business strategies.

“Global brands have educated Australian consumers to expect internationally competitive pricing, an endless aisle and greater shopping convenience. Digital will soon be the deciding success factor in retail.”

To adapt to this new reality, he suggested Australian retailers may need to offer customers a relevant and personalised experience throughout the customer journey through a deep understanding of customer preferences and shopping behaviours; reset their pricing strategy; redefine the role of the store to blend the physical and digital experience; reinvent the in-store employee experience; and rethink the supply chain to expand ranges.

In addition, the report found two in three customers use a digital device before their shopping trip and nearly a third (31 percent) use it while shopping. Additionally, 47 percent use their device to compare products, 42 percent to access product information and 33 percent to check product availability.

The study also indicates using digital devices to research, find and compare products boosts conversion to sales by 25 percent and increases shoppers’ order sizes by 21 percent on average.

In addition, Australia is reported to be the sixth most concentrated smartphone market in the world and is tied with the US as a developed country with the highest social media influence in the shopping journey.

“Online shopping used to be considered as distinct to bricks-and-mortar stores. Digital and traditional shopping channels are blending and complementing each other along the end-to-end customer journey. It will be critical to the future of the store – not the cause of its demise,” White added, firm in the belief that embracing digital influence will be the key to the survival of Australian retail.

“Historically, local retail sales have not gone online in Australia as quickly as in other markets. That is fast changing. Digital is becoming an integral part of every element of the in-store shopping experience. Australian retailers need to understand how to harness its influence to increase conversion rates and order sizes.”

The full report is now accessible online via Deloitte and you can watch the video here.