Find us on Facebook Find us on LinkedIn Follow us on Twitter Subscribe to our YouTube channel Instagram

Almost 40% of Australian retailers failing to engage with consumers online - Research report

15 Jul 2014

  • 38% of all Australian retailers are classified in the lowest category of digital commerce adoption
  • Australian retailers are lagging behind by 33% in building engagement digitally compared to international market leaders

Australian retailers are lagging behind their international competitors in the adoption of digital commerce, particularly in the area of customer engagement, according to a report prepared by the Australian Digital Transformation Lab, a joint venture between Capgemini Australia and the Business School.

The second Australian Digital Commerce Report describes 38 per cent of all Australian retailers as "laggards" when it comes to digital commerce and warns that they are at risk of losing customers to foreign competitors.

"While digital execution [the provision of information and facilitation of purchase transactions online], has become a necessity for retailers to connect with consumers, Australian companies must now work on improving strategic engagement, to ensure they don't lose their customers to overseas competitors who are delivering exceptional engagement levels," said Ben Gilchriest, Digital Transformation Lead at Capgemini Australia.

"Australian retailers must take a proactive approach to digital commerce to build both the execution and engagement aspects simultaneously," said the Business School's Associate Professor Kai Riemer. "Closing the gap between Australian retailers and international market leaders requires strong improvements in omni-channel integration, the strategic use of customer data to drive one-on-one engagement and a greater focus on systematic engagement across social media channels."

With more than 50% of Australians preferring to shop online where possible, the report says that Australian retailers need to stand out from the crowd by drawing on a range of digital commerce features to engage with their customers on a more personalised level.

The Report highlights the importance of balancing the operational aspects of digital execution with new approaches to engage customers in both social media and on the retailer's own digital platform.

"Only if retailers engage with customers consistently across different channels will they be able to successfully grow and harness a loyal customer base to ensure continuing customer satisfaction and profitability," said Associate Professor Kai Riemer. "Operationally, this means treating customers as individuals and not as part of an anonymous group, even if this is done in a mass customised way."

The report also reveals that local retailers are lagging behind by 33% in building customer relationships, while only 26% share the 'High Achievers' category with international market leaders. Companies in this category have achieved above 50% coverage of digital functionality in both the digital execution and engagement dimensions.

The Australian consumer electronics sector is leading the way, while sectors such as food, hardware or furniture are falling behind their international counterparts, and failing to achieve this balance required between omni-channel execution and customer-centric engagement.

"Australian retailers are falling behind international market leaders who have invested for many more years in digital commerce features that support more personalised customer experiences", Mr Gilchriest said. "The larger the gap between the retailer and consumer becomes, the greater the chance that customers will switch to suppliers overseas. The longer this goes on, the harder it becomes for local retailers to persuade them back."

The Australian Digital Transformation Lab complements Capgemini's global, joint research collaboration with the MIT Centre for Digital Business which launched in 2011 and is focused on examining how companies around the world are managing and benefiting from digital transformation and the processes and best practices involved. This new research from the Australian Digital Transformation Lab will add local analysis and domain specific insights to provide Capgemini clients with a robust framework to deliver value from their digital transformation programs.

Further Information