Australia’s retailers recognise the importance of mobility and analytics and yet few are making the kinds of investments that will really move the dial and provide the truly integrated experience consumers crave, according to a major new report released by the Commonwealth Bank.

The study called CommBank Retail Insights combines an analysis of around three billion dollars in transaction data from CommBank credit cards covering ten major online retail categories with an in-depth survey of more than 500 retailers in Australia.

According to the report, “Increasingly, online transactions happen on a mobile device, something many retailers recognise as the shape of things to come.” The problem however is that a while majority of retailers already transact over mobile, only about 10 per cent are actively investing in their mobile presence.

On the analytics front the report says three quarters of respondents say an integrated view of the customer is critical, but few are actually investing in integration. Budgets and technological challenges are identified as major impediments.

“The result is that while many multichannel retailers are running separate unintegrated digital and physical channels , there are few very genuine omnichannel operators.” And yet the evidence of the value of a multichannel approach is made clear in the report.


cba infographic

“Multichannel retailers have experienced higher growth than there online only competitors, further evidence that customers may be inclined to search online for physical retailers they are already familiar with.”

But the authors also caution that the bricks and clicks brigade need to ensure those online experiences fulfill the brand promise.

As the study notes, “The bad news is that generating online sales can be challenging. To succeed, as one of a small number of brands preferred by consumers, it seems retailers need to optimize multiple aspects of the online experience including search, usability, product range, payments and delivery.”

The report also notes some interesting differences in approach between pure plays and more traditional retailers.

Take mobile for instance. Multichannel operators tend to focus on accessibility and integration while pure plays who lack many of the legacy impediments are more likely to be grappling with apps and social media.

Data driven? L plates only

Retailers are also lagging on analytics according the CommBank report. “Many retailers have an indistinct understanding of their customers.

“Even though three out of four retailers analyze at least one data source to understand customer behavior, most feel they are not effective at actioning insights derived from their analysis.”

CBA three

According to Jerry Macey, National Manager, Retail Industry, Commonwealth Bank, “Retailers are acutely aware of the role that channel integration and big data can play in enhancing the customer experience, however, currently few are planning integration as a priority for investment.”

In a statement accompanying the release of the report the bank said that changes in online consumer behavior are driving a substantial growth outlook for online and mobile retail sales

Among the key findings
• Average online transaction value up 14 per cent
• Overall online sales forecast to grow 20 per cent in next year – mobile sales set to double
• 43 per cent of retailers will increase technology budgets in next 12 months
• Two-thirds of retailers positive or unfazed by weakening AUD
• Just 36 per cent of retailers say they are effective at harnessing big data

The report finds consumers are shopping online less frequently but spending more per transaction, with the average transaction value up 14 per cent year on year.

It suggests that consumers remain highly selective and loyal. “More than 90 per cent of online shoppers transact with just three or fewer brands each quarter, and two-thirds of customers shop online for just one category of goods.”

Online spending increased 14 per cent in the 12 months to 31 March 2015 , the research reveals. And growth is set to accelerate with retailers expecting a 20 per cent increase in online sales over the next 12 months. Sales over mobile channels are also expected to double.

Macey said, “The shift to online shopping is supporting confidence in the retail sector. Retailers are responding by maintaining or boosting investment in technology and introducing new digital channels to capture substantial expected sales growth. While businesses are witnessing the rapid pace at which consumer behavior is changing, they are saying they are concerned about the costs associated with technology solutions and marketing.”

One final note, the report also finds that, the tradition of smaller, regular purchases of items such as music and books, is being overtaken by sales of categories such as high-end fashion, technology and appliances, albeit on a less-frequent basis.

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