Australian retailers agree that a top threat to their future success is the impact international online retailers continue to have on their business.

Australian retailers slow to adapt to online opportunities

Sydney, Australia, 28 September 2012: Australian retailers agree that a top threat to their future success is the impact international online retailers continue to have on their business. Yet, many are largely ill-equipped to go head-to-head online, according to a whitepaper released today by global information firm, Experian Marketing Services.


The report, titled “Retail in Australia: It’s Time to Embrace the Digital Future” found that 66 per cent of retailers admit international online retailers have impacted their business, yet more than half (53 per cent) don’t yet have any online transaction capabilities. What’s more, 44 per cent of retailers have no plans to introduce online transaction capabilities to their websites over the next 12 months, despite 53 per cent rating online transaction capabilities or shopping cart functionality as important or very important to their business.


“Whether Australian retailers are ready or not, the local retail landscape has irrevocably changed. From ‘bricks and mortar’ to ‘bricks and clicks’ to purely ‘e-tail’, consumers are demanding more from traditional retailers and there are significant risks for those who do not to keep up with the pace of change,” said Matt Glasner, General Manager of Experian Marketing Services.


Through the research  and working with some of Australia’s largest retailers, Experian has seen that a large portion of retailers have been slow to adapt to a dual online and offline model and are struggling to compete on a level playing field with international and local ‘online only’ competitors.

 
“The good news is that retailers can take small steps to increase their investment into e-commerce and our research has found that some Australian retailers are putting plans in place to further this investment in the next 12 months. We have seen that regardless of what stage they are at, those retailers that have begun the e-commerce journey have done so with great success.”


Key findings from the report include:


• 57 per cent of marketers indicated their senior managers regard online retail as a priority, yet 34 per cent of retailers don’t allocate any of their budget to e-commerce.

• 57 per cent of marketers indicated their senior managers regard online retail as a priority, yet 34 per cent of retailers don’t allocate any of their budget to e-commerce.


• Loyalty programs - While retailers rate online loyalty programs as being just as important as offline rewards programs, only 21 per cent of retailers offer online loyalty programs through their websites, slightly less than the 24 per cent that offer programs offline. 25 per cent plan to introduce online loyalty programs in the next 12 months.


• Targeted offers - Although only 17 per cent of retailers currently offer online discount codes for target customer groups, 26 per cent plan to introduce this in the next 12 months. They also plan to target customers based on their shopping behaviour. While only 22 per cent of retailers currently use a “you may also like” feature on their websites, 27 per cent plan to introduce this in the next 12 months.


• Returns/refunds - The research shows that only 42 per cent of retailers currently offer online refunds, and only 16 per cent plan to introduce this service in the next 12 months. Likewise, only 30 per cent of retailers currently offer free returns for items purchased online and another 16 per cent plan to introduce this service in the next 12 months.


Glasner says that it doesn’t appear to be lack of budget that is holding retailers back.


“In our experience retailers are most hesitant to abandon their legacy infrastructure investments. What marketers need to consider is that ultimately it isn’t about revolutionising the way you connect with your customers, but evolving to incorporate a wider range of channels into your marketing and transaction strategy.”


Despite the hesitation to go online, the research found that 38 per cent of retail marketers plan to allocate more dollars in their budget towards changing their e-commerce platform in the coming year. And, although the transition to online is a significant step for some, Experian reiterates that it doesn’t necessarily require large budgets, overhauls of existing systems or dramatic transformations of business processes. Rather, it’s about online capabilities that allow businesses to continue to be commercially viable, tailoring their online offering to the overall business model.


“Consumers are looking for more than a web presence, they want convenience and value online, through features like free shipping and free returns, making it challenging for those retailers who have yet to embrace e-commerce to catch up. Bricks and mortar retailers need to take action now if they want to become competitive in the online space, offering a way for consumers to connect both online and offline,” said Glasner.

-ends-


Notes to editors
The research is part of an in-depth whitepaper called ‘Retail in Australia: It’s Time to Embrace the Digital Future.’ To receive a copy of the whitepaper in September, please contact experian@n2n.com.au.

Experian Marketing Services commissioned independent research with 300 Australian marketing professionals across the retail, financial services, government, technology, digital and travel industries to develop an industry whitepaper on the current state of online retail in Australia.

The independent research reveals how well equipped retailers are in the transition to e-commerce and the value each retail marketer places on online as a communication and sales channel.

About Experian
Experian is the leading global information services company, providing data and analytical tools to clients around the world. The Group helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2012 was US$4.5 billion. Experian employs approximately 17,000 people in 44 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.

For more information, visit http://www.experianplc.com.

 

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