With Australia’s COVID-19 vaccine rollout in full swing, the chances of border closures extending beyond the next couple of months are becoming increasingly unlikely. Barring any unexpected major outbreaks, Australian retailers should be approaching the second half of 2021 with an elevated degree of confidence.
A recent report from National Australia Bank indicated consumer sentiment increasing to 118.8 in April 2021, which represents a 6.2% month-over-month rise and the highest reading since August 2010.
The light on the horizon represents a clear opportunity for Australian retailers to recover. However, the rate of recovery will be contingent upon seamlessly integrating new consumer preferences into post-pandemic shopping experiences. If the past year is any indication of what customers now want, retailers who provide personalised, data-driven journeys both online and in stores when they reopen will be well poised for sustained success.
Retail’s new baseline
In response to COVID-19, retailers got creative with their service offerings to maintain sales and combat steep in-store demand declines for specific verticals like fashion. The result was an accelerated adoption of omnichannel e-commerce options like buy online and pickup in store (BOPIS), curbside pickup, and direct to consumer delivery (D2C) that enabled companies to meet evolving customer expectations.
Before COVID-19, nearly 72% of Australian consumers used physical stores as their main channel for non-grocery retail purchases. However, more than half of consumers (53%) now consider e-commerce options as their main source for purchases. According to the Australian Bureau of Statistics, online sales in Australia registered a 55% uptick in December 2020 compared to the previous year. Furthermore, the e-commerce acceleration disrupted brand loyalty as economic downturns caused a rapid shift to value-based shopping centered on discounted pricing, ease of use, and product availability.
Moving forward, retailers should consider these trends to be permanent. Australians grew accustomed to the unrivaled convenience of e-commerce and an expanded array of brands to buy from, which will keep them open to online shopping once the pandemic subsides. GlobalData expects the COVID-19 outbreak to drive a 10% annual growth rate in e-commerce sales between 2020 and 2024.
The pendulum swing further magnifies the need for retailers to continue offering flexible e-commerce options even after brick-and-mortar demand returns to pre-pandemic levels. In turn, a critical component to financial recovery will be ensuring consumers receive a consistent experience regardless of how they shop.
Leveraging advanced technology to improve the customer experience
The combined use of artificial intelligence (AI) and data analytics is already empowering retailers to fulfill these new consumer preferences without much friction. Inside store operations, AI-driven advanced analytics solutions enable organisations to streamline inventory management, create effective planograms, and automate adjustments to shelf alignments and pricing based on operational performance data generated in near-real time. The extended use of Internet of Things (IoT) solutions is also allowing for even greater creativity in meeting shopper demand.
Studies have found that 33% of retail customers have abandoned relationships with businesses because their experience wasn’t personalised enough. So, to restore brand loyalty, retailers should take advantage of the automated analysis of point of sale (POS) data to gain a deeper understanding of customers and the technologies that can help enhance the in-store and online customer experience.
Any underlying data insights gathered from consumer trends like shopping tendencies (in person vs. online), frequent channels, point of purchase locations, and individual demographics help create targeted strategies tailored to customer preferences. For example, the Australian brand Ralph & Russ has decided to utilise augmented reality (AR) technology to offer online fitting rooms where consumers can virtually try on items, essentially digitalising a fundamental component of the in-person shopping experience. Similarly, the sunglass retailer Bolle leverages AR to replicate the physical experience of trying on lenses.
By doubling down on AI-based analytics solutions, along with other data-driven technologies that provide more clarity into customer expectations and operational performance, Australian retailers can offer consistent shopping experiences no matter the medium to capitalise on the growth opportunities of 2021.
Guy Yehiav is general manager of Zebra Analytics.