Consumer Mobile Commerce Behaviours Challenge Australian Retailers

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By Published On: September 27, 20180 Comments

Libby Roy from PayPal Australia shares her insights on how rapid advancements in Australian retail technology is challenging local businesses.

The last 18 months have been a turbulent period for retail in Australia and ‘business as usual’ is no longer an option for retailers who want to stay not only ahead, but afloat.

Amid collapses, refinances, acquisitions and the expanding presence of global marketplaces, Australian retailers are being challenged as never before thanks to new technologies and rapidly-changing consumer behaviours. This difficult new playing field is not being faced by Australian brands alone. Global brands with physical outlets like Topshop, Forever 21 and H&M have also faced challenges in our market as Australian consumers continue to move online.

However, despite being challenging, our market does continue to attract international entrants. Australian retailers may not be used to having the highly-competitive dynamics of other markets but will need to adapt quickly to the hotter competition and digitally-oriented consumers.

In this time of retail disruption, one thing is clear. Without significant investment in e-commerce, Australian brands will face an uphill battle. And mobile commerce is critical for any effective e-commerce strategy.

In 2017, Australia’s online purchases of physical goods grew by 19.2 percent to $21.3 billion, a rate which far exceeds 2016’s 11.5 percent growth. Compare that to the overall growth of the Australian retail industry of 3.3 percent in 2017 and the consumer move to digital shopping is clear.

PayPal’s mCommerce research shows that 72 percent of Australian smartphone users make purchases or payments using their mobiles – a figure that rises to 87 percent for Australians under 35 with 39 percent of these younger consumers choosing to shop via mobile over any other device.

Faced with growing demand for online and mobile shopping experiences, it’s surprising that only half (51 percent) of Australian businesses are optimised to sell via mobile. But having a transactional mobile retail site is just the start. Because Australians don’t just shop on their mobiles for convenience, 67 percent shop on their mobile for fun without any pre-planned purchase in mind.

And Australians are doing this ‘digital window shopping’ frequently with 46 percent browsing retail sites for entertainment at least once a week. Most importantly, when Australians are engaged in recreational mobile shopping, nearly 4 in 5 (77 percent) make impulse purchases – so having a website that’s engaging and fun can yield real financial benefits.

Innovators in mobile commerce are capitalising on the shift towards online ‘retailtainment’ and are incorporating new and engaging technologies, such as augmented reality (AR) to win and retain customers. AR takes elements of the real world and combines them with digital information. For example, car enthusiasts can use their mobile to see how new wheels will look on their own car before they make a purchase, or consumers can super-impose glass frames on their face to see what suits them best.

With almost half (44 percent) of Australians stating they would be more likely to purchase online if they could ‘try before they buy’ using an AR feature on their mobile, the barriers to mobile shopping are being lifted by these emerging technologies.

While presently only five percent of Australian businesses surveyed have an augmented reality experience, 32 percent are currently developing or intending to develop one. Retailers don’t have to turn into tech experts overnight, there are many technology providers they can partner with to create these engaging experiences.

What retailers can’t do is ignore the disruption. Customers want an easy, fast and convenient buying experience from discovery to purchase and even after-sales service. Mobile meets these needs.

Even consumers who are not buying via mobile are researching, considering and locating what they want through their mobile phones – reading peer reviews and online ratings before they even step into a store. Major retailers need to crack the code on true omnichannel retailing; with online, in-store, in-app and social commerce experiences all linked to capture consumer data. It’s something that’s particularly hard for established businesses that have separate online and in-store systems and supply chains, often with different economics.

Australian retail isn’t doomed, but the new retail environment is one that’s data-driven and mobile-enabled. It will require better CRM to drive personalisation, consolidated supply chain and tighter cost infrastructures to compete.

However, there seems to be a knowledge gap. Of the 49 percent of Australian retailers who are not mobile optimised, 36 percent believe their customers don’t want to buy via mobile and 37 percent have no plans to optimise for mobile in the future. The research tells us this is misguided.

Mobile commerce will continue to strengthen its hold on Australian shoppers and businesses that don’t rise to challenge will likely to be left behind.

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