Power Retail's annual Outlook lunch took place this afternoon in the River Room at Crown, with more than 150 guests in attendance. If you missed today's session, here are a few key takeaways that all retailers in Australia should know.
2021: The Year of Retention
Last year, the online boom was undeniable. And while last year was all about the capturing of new customers online, this year, retailers need to focus on keeping customers interested in shopping online.
“2021 is the year of retention,” says Natasha Sholl, the Insights Editor at Power Retail. “If 2020 saw shoppers flock online, it’s now up to retailers to ensure they’re here to stay.” Shopper intent to online spend is a great indication of consumer confidence, Sholl explains, and confidence is high.
In fact, far more shoppers say they plan on increasing spend online (25 percent) compared to those who will decrease (18 percent). “This has been a trend we have been seeing for the past year, apart from the predictable post-Christmas related plans to decrease spend,” Sholl says.
Even though online spend has not seen the same level of growth YoY compared to the peak pandemic spend in April last year, the same number of shoppers intend to shop the same or more online (82 percent). “[These figures] bode well for the industry as a whole and show the long-term impact on consumer buying behaviour,” Sholl says.
In a post-COVID landscape, retailers should also be aware of the change in demographic. Younger consumers, such as Millennials and Gen Z, have long been comfortable shopping online. However, the pandemic has pushed an older demographic online, that may have otherwise been perfectly content to shop in-store. According to Power Retail Benchmarking data, the majority (51 percent) of shoppers aged over 45 are now more comfortable shopping online in 2021.
“The influx of older shoppers online, who are a generally more affluent demographic and less driven by bargain hunting, is really a good news story for retailers and there is a huge opportunity to turn this demographic into habitual online shoppers,” adds Sholl.
Free Delivery Driving Growth
Free delivery is the number one reason why shoppers will abandon a cart online. Power Retail Benchmarking data shows that almost every single respondent (98 percent) listed shipping costs as the main reason for cart abandonment.
Lack of communication around fees came in second place. In fact, a whopping 84 percent of respondents said they would exit a shopping cart page if information about delivery fees came too late in the checkout process. Despite the immense amount of pressure put on retailers, speed of delivery is not a major concern for shoppers.
“Free Shipping is no longer a ‘perk’, it is expected,” says Grant Arnott, the Managing Director of Power Retail. “Which means it is less useful as a marketing tool, but if you don’t offer it, you risk losing sales. The balance needs to be found here, whether it’s offering free shipping over a certain threshold or offering multiple shipping options.”
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