navigating the new digital divide

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Digital influences 40% of retail bricks-and-mortar store visits

  • 65% of customers use a digital device before shopping and 31% while shopping
  • Using digital devices to research, find and compare products boosts conversion to sales by 25% 
  • The use of digital devices increases shoppers' order sizes by 21% on average.

 

17 July 2015: Digital interactions influenced 40% of in-store retail visits in Australia in 2014, according to the inaugural Deloitte report, ‘Navigating the new digital divide – digital influence in Australian retail’, released today.

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

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. Should Australia follow the same trend as the US – where such behaviour has multiplied four times over the last three years – we can expect digital to influence a majority of retail in-store visits in Australia within the next few years (see figure 1).

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Australia potential digital influence projection
Figure 1: Australia potential digital influence projection

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

“In our Retail Review Christmas Survey, we found just a third of Australian retailers citing omni-channel as their number one strategic priority. The findings from this digital divide report should be a wake-up call for the retail sector which is at risk of underestimating local consumer appetite for digital engagement,” says David White, Deloitte partner and retail industry leader. “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.”

“Historically, local retail sales have not gone online in Australia as quickly as in other markets,” explains Katherine Milesi, Deloitte Digital partner. “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. When consumers use digital devices to research, find and compare products – before, during and after shopping in-store – it boosts both average conversion rates by 25% and order sizes by 21%.”

Digital firmly embedded across the shopping journey

Two-thirds of customers use a digital device before their shopping trip and nearly a third (31%) use it while shopping. Additionally, 47% will use their device to compare products, 42% to access product information and 33% to check product availability.

“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,” says White.

To adapt to this new reality, Australian retailers may need to:

  • Reimagine the customer experience – to offer a relevant and personalised experience throughout the customer journey through a deep understanding of customer preferences and shopping behaviours
  • Reset pricing strategy – to allow greater speed and flexibility in setting and changing prices to attract customers and maintain margins
  • Rethink the supply chain – to expand ranges without the associated cost, improve delivery convenience to customers and create cost efficiencies in the value chain
  • Redefine the role of the store – to blend the physical and digital experience more seamlessly and reconsider the purpose of the store in the shopping journey or experience
  • Reinvent the in-store employee experience – to bridge the current digital gap in the in-store experience.

Mobile and social merge

The most recent edition of the Deloitte Mobile Consumer Survey revealed Australia as the sixth most concentrated smartphone market in the world after Singapore, South Korea, Norway, Spain and Sweden. Australia is also the developed country with the highest social media influence in the shopping journey, tied with the US.

“Those influenced by social media are 26% more likely to purchase a product than non-social media users,” says Milesi. “This is because social media users are further along their purchase journey, having used it for inspiration and validation. In particular, the growth of social media access on mobile is changing the shopping experience. The crossroads of social and mobile offers users the ability to connect with context. Increasingly, digitally influenced shoppers are tagging locations and sharing images, videos and information about their shopping journey with their family and friends.”

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