Digital transformation, the power of payments, and staying agile
Adyen’s 2019 Australia Retail Report by 451 Research, has just been released with fascinating insights for retailers. The study has identified that creating positive shopping experiences amount to a $71 billion lift in sales annually. Additionally, negative shopping experiences amount to $21 billion in abandoned sales annually. These form the basis for the $92 billion opportunity in Australia.
Of all regions surveyed, Australian consumers are the most enamoured with in-store shopping, 50% preferring to shop this way, versus 27% who prefer online shopping. This compares with the US, where 37% of shoppers prefer to shop in person and the UK, where a similar percentage (36%) prefer to shop in store.
However, a number of negative shopping experiences are impacting Australians' love for shopping. A common source of in-store dissatisfaction is long lines. 61% of consumers abandoned an in-store purchase due to excessive queues, resulting in $13bn in abandoned sales annually.
The major message for retailers from this data is the need to optimise the in-store experience so it complements their digital offering. This helps to satisfy customer preferences and can contribute to an uplift in sales.
Across Australia, retailers expect online sales will make up 30% of all sales within just three years, up from 23% of sales today. So the onus is on retailers to reduce friction points to make online shopping as easy as possible.
Fraud management is one of the key friction points retailers need to urgently address. An important issue is consumers’ credit cards being declined because payments are suspected to be fraudulent when in fact they are legitimate. According to the research, 49% of consumers have abandoned a sale for this reason within the last six months, which has led to $7 billion in lost sales.
Down the track, tools that use artificial intelligence or machine learning to better distinguish genuine shoppers from fraudsters will help to reduce these false positives.
All shoppers want convenience when making purchases. They often start their shopping journey by researching future purchases in social media, before going in-store to buy the product they have been exploring in the digital environment.
Local retailers are also behind the US when it comes to offering cross-channel shopping options, with only 23% of Australian retailers offering this option, versus 37% of retailers in the US.
Retailers take note: two out of five shoppers have abandoned a sale because of a lack of cross-channel options to buy, for instance making a purchase online and picking it up in-store, resulting in $7 billion in lost sales. Additionally, 51% of shoppers bought an item they didn’t initially intend to buy because of the convenience cross-channel shopping delivers.
Overall, Australian retailers have an enormous opportunity to streamline the way in which shoppers buy their products in both the online and in-store spheres. The idea is to make the checkout experience as frictionless as possible, and at the same time, ensure online and offline shopping, as well as cross-channel options, are easy to use. That’s the best way to get a slice of the $92 billion in missed sales opportunities currently available to them.
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