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Three Tips to Capture the $92 Billion Retail Opportunity
In new research from Adyen, there is a $92 billion opportunity for retailers to better combine online and in-store shopping experiences, known as unified commerce, and reduce the common frictions people face when shopping.
The 2019 Australia Retail Report, by 451 Research, shows that in Australia, the in-store experience is paramount, with shoppers preferring to make purchases in person. At the same time, an increasing proportion of people are switching to online shopping.
Brick-and-mortar remains critical
Australian consumers love in-store shopping, with 50 per cent of those surveyed preferring to shop this way in contrast to 27 per cent who prefer online shopping. This is significantly higher than the US, where 37 per cent of shoppers favour shopping in person. The message for retailers from this data is the need to optimise the in-store experience so it complements their digital offering. This helps to satisfy customer preferences and can contribute to an uplift in sales.
Address friction points to grow online sales
The survey results show retailers expect online purchases will comprise 30 per cent of all sales within three years, up from 23 per cent today. So the onus is on Australian retailers to make online shopping as easy as possible. This is important given the results show retailers are suffering inertia when it comes to digital transformation, with only 22 per cent having a digital strategy in place. With 91 per cent of shoppers owning a smart phone, this demonstrates digital channels are and will remain an essential touchpoint for retailers. So now’s the time to explore the opportunities digital offers.
One of the key friction points retailers need to address is fraud management. An important issue is consumers’ credit cards being declined because payments have been suspected to be fraudulent when in fact they are legitimate. According to the research, 42 per cent of consumers have abandoned a sale for this reason within the last six months, which has led to $7 billion in lost sales.
Make all channels as accessible as possible to drive sales
Consumers don’t think about different channels when they are shopping in the same way retailers do – all shoppers want is convenience when making purchases. They often start their shopping journey in what retailers consider one channel, for instance researching on social media, before going in-store to buy the product they have been exploring online.
Australian retailers are behind the US when it comes to providing cross-channel shopping options, with only 23 per cent of Australian retailers offering this option, versus 37 per cent of retailers in the US.
Two out of five shoppers have abandoned a sale because of a lack of cross-channel options to make a purchase, for instance purchasing online and returning in-store, resulting in $7 billion in lost sales. Conversely, 51 per cent of shoppers bought an item they didn’t initially intend to buy because of the convenience of cross-channel shopping.
There are many steps Australian retailers can take to make it easier for shoppers to buy their products in both the online and in-store environments. The idea is to improve the checkout experience and at the same time, ensure individual channels, as well as cross-channel options, are as seamless as possible. That’s the best way to get your piece of the $92 billion in extra sales opportunities of which local retailers should be taking advantage.
Download a copy of Adyen’s 2019 Australia Retail Report to find great tips for optimising your online and in-store experience and cashing in on the $92 billion opportunity.
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