Retailers can expect consumers to spend more cautiously and consciously this Christmas, according to Accenture 2020 Festive Shopping Research, with 9 in 10 Australians planning to spend the same – if not less – than last year to preserve household budgets.
The report found that nearly 91% of consumers prefer to shop with retailers offering competitive prices, and 60% will choose to buy cheaper goods. The average expense per consumer will sit at $573, with parents and older millennials predicted to spend the most.
Unsurprisingly, 59% of Australians choosing to continue shopping online with close to 40% of shoppers receiving at least one shopping delivery per week. The top reasons deterring consumers from shopping in-store include being made to queue due to store capacity restrictions (63%), in-store teams not wearing Personal Protective Equipment (43%), and the failure to make mask-wearing mandatory for customers (37%).
One-third want safer delivery methods, including contactless delivery options with other expectations including fast and free delivery (30%), having a wide range of delivery options within reasonable costs (21%), and not having to wait for the items ordered (16%).
Here are six key customer trends that can help retailers maximise sales this Christmas, particularly if embraced in conjunction with one another:
- Sustainability
More than two-thirds (67%) of Australian consumers say that green or sustainability issues influence their purchasing decisions, according to a recent survey by Manhattan Associates.
Retailers across all sectors are waking up to the importance of green issues with “doing more to minimise the environmental impact of our organisation” a top-four business priority among 31% of Australian retail companies.
However, although most consumers say sustainability and environmental credentials are either a “very important” (21%) or “quite important” (46%) part of their purchasing decision, the research shows retailers still have some way to go.
The research highlighted a potential difference between what retailers perceive as consumer aspirations and reality when it comes to delivery. Retailers revealed that they perceived same-day delivery to be their customers’ most popular delivery option, while only 8% of consumers agreed with this. The most popular delivery option among 35% of customers was delivery in two or more working days.
To ensure that goods have the shortest path to consumers, and the lowest emissions total possible, retailers must also consider hybrid fulfilment methods which include both shipping goods to customers from warehouses and from stores.
2. Positive customer experiences
A positive customer experience during the festive season will yield long-term customer loyalty (41%) and impact customers’ desire to buy more items from a retailer (34%), recent research from Zendesk has revealed. While Australians plan to shop with brick-and-mortar retailers (31%) and online retailers (29%) equally, a positive customer experience is the difference between a one-off shop and repeat purchases.
The survey shows more than two in five (43%) say the customer experience provided by a retailer is a key factor in their decision to spend, and more than one in two (52%) feel loyal to a retailer if they are met with quality customer service. Almost half of Australians (46%) would switch to a competitor after just one bad experience with a retailer.
When it comes to what a ‘positive’ customer experience involves, respondents identified easy to find contact information (45%), a prompt resolution to an online inquiry (42%) and helpful search results (38%) as the top factors.
The platforms available for customers to reach out to retailers and resolve issues are also important. One in five (20%) expect being able to seamlessly interact with a retailer across multiple channels including messaging apps as part of customer service, with 17% saying they expect to resolve issues with a retailer over social messaging apps.
3. Seamless online interactions
The State of the Connected Customer report released by Salesforce found that more than half (52%) of all interactions between customers and businesses this year were digital, compared to just 36% last year. Customers expect 50% of interactions next year will continue to be online.
Empathy for and support of customers’ unique needs, expectations, and challenges are critical, as is providing a convenient, connected experience that eliminates unnecessary burdens in a stressful time. More than half (52%) of Australian and New Zealander customers say it generally feels like sales, service, and marketing don’t share information.
As digital engagement grows, customers expect companies to digitise their operations for multichannel, high-touch interactions. In Australia and New Zealand, 67% of customers say that COVID-19 has elevated their expectation of digital capabilities.
When it comes to specific sentiment, 84% expected flexible shipping/order options and 83% expected interactions to be consistent, regardless of department with email the most favoured form of communication (67%), ahead of phone (50%), chatbots (46%), in-person (45%), mobile apps (30%) and online portals (23%).
4. The rise of digital gifting and gift cards
With online shopping showing no signs of slowing, the rapid adoption of gift cards, and in particular digital gift cards, is here to stay with industry experts forecasting that the Australian gift card market will increase from $5.85 billion in 2019 to $9.4 billion by 2024.
Swedish digital subscription service, Readly allows consumers to purchase and consume content digitally. Launching in Australia earlier this year, offering access to almost 5,000 titles of magazines on their platform, which was soon complemented by a digital gift card subscription service.
Beyond convenience, the idea of digital gifting implies a level of thought in regards to the usefulness and appropriateness, with flexibility for redemption. Readly head of content for Australia, Chris Couchman said, “In unprecedented times like these, the practicalities for both those who purchase and receive digitally highlight a key driver in their exchange – there is no need to navigate shopping complexes or in the case of digital cards, pay for shipping. The transaction is instantaneous, which feeds to our consumerist nature.”
5. Focus on re-engagement strategies and tactics
Online retailers across the Asia Pacific (APAC) region send the most cart recovery emails, in comparison to their global counterparts, as they look to rescue lost revenue and maximise sales opportunities, according to data from leading omnichannel marketing automation platform, dotdigital.
However, online businesses across the region need to further streamline their re-engagement strategies and tactics to capitalise on increased ecommerce revenues.
Research in the Hitting the Mark report revealed that cart abandonment rates are the highest they have ever been at 70% across the industry. While brands in Australia, New Zealand, and Singapore are sending the most cart abandonment emails, only 28% arrived within an hour, and only 33% sent more than one. Both tactics are considered industry best practice as they generate the highest conversion opportunities.
6. Offer alternative delivery options
Australian shoppers are nervous about delivery delays in the lead up to Christmas and are exploring alternative solutions to manage the risk, according to leading international e-commerce solutions provider, Doddle.
New research from Doddle reveals that almost two-thirds (64%) of Australians are concerned about delivery delays of online orders this festive season. As retailers expand fulfilment options to meet increased demand, shoppers have already started putting their own strategies in place to beat the rush; with 57% saying they plan to shop earlier, while 21% say they plan to utilise alternative delivery methods, and 9% are prepared to pay more for express delivery.
Further, just over 39% of shoppers said the convenience of alternate delivery options like pick-up points and lockers was what motivated them to choose these options. This convenience was shown to outweigh the relative importance of Buy Now Pay Later (BNPL) options available to consumers when choosing an online retailer to shop with.
With 30% of shoppers citing availability of pick-up points and click & collect as important compared with just 17% citing BNPL as important, it was a finding that was sustained across all respondent age groups.
Despite delivery to a home address being the preferred option for 83% of shoppers, strong demand for out-of-home fulfilment options has persisted throughout lockdown, with 14% of consumers saying they have used alternative delivery options more since COVID, while 9% will opt for click & collect as a preference.