It’s not omnichannel, it’s just retail – insights from AIMIA’s Retail Research Report
Australian retailers are starting to fight back, writes Mark Cameron, who this year led AIMIA’s annual research into how Australia’s retail professionals see the changing landscape.
It’s safe to say that the pace at which Australian consumers have adopted shopping online has taken some retailers by surprise. While many may have seen the writing on the wall during the years following the Global Financial Crisis, a turning point in online trade, some of the more traditional retailers were slow to accept the inevitable – and even slower to invest.
This is particularly true in Australia which seemed somewhat shielded from the financial crisis sweeping the world – why invest in digital innovation when the local economy seemed to be so robust?
Fast forward to today, where we can look back with the benefit of hindsight, and it now seems obvious how the market was going to change. Innovation overseas would bring new waves of competition and the data driven marketing techniques that were reshaping the communications and media industries would forever alter the way that retailers connected with their customers.
The Australian retail marketplace would be, and still is, going through a digital transformation. For the last six years the Australian Interactive Media Industry Association (AIMIA) in partnership with Australian Centre for Retail Studies at Monash University, has been asking Australia’s retail professionals how they see this changing landscape. The report, of which I am this year’s chairman, combines qualitative interviews and a quantitative survey to deliver deep insights into the state of Australia’s digital retail landscape. The 2014 release of the research report reveals some of the clearest insights thus far.
It’s not omnichannel, it’s just retail
One of the strongest sentiments to come out of the report this year was the negative perception of some of the language that permeates the digital marketing space and the term ‘omnichannel’ in particular. One retailer was anonymously quoted as saying “Omnichannel is just another term, it’s consumer expectations that have become omni if anything… Now customers expect to be able to research on their mobile, maybe even buy on the device, or at least then go to the store the next day and look at the product. There is an expectation for how retailers deliver on these channels, that is what is important – we need to to take commercial advantage of these expectations.”
Overall most retailers agreed that there was no ‘one size fits all’ approach to retail promotion across so many digital and non-digital channels. Spending time to get the strategy right, and having clarity about what each channel was to be used for, is essential in creating optimal cross-channel experiences.
Think less about the channel and more about the experience
One critical evolution in tone that came through clearly in this year’s report was the role that digital tools and techniques play in developing a customer-focused business and leading changes in customer engagement. While no one respondent claimed to have all the answers, many were looking for ways to constantly improve.
A constant focus on the customer experience combined with the strategic use of customer data was seen as central to creating a sustained competitive advantage. Naturally, taking this approach across so many channels raises concerns around complexity. As such, marketing automation was seen as the only scalable way to manage the levels of customer engagement initiatives that many firms sought to achieve.
Digital strategic importance is growing rapidly
Compared to when the AIMIA report was published in 2011, digital is now seen as business as usual. It has become integrated part of normal business operations. And this clarity has seen it’s strategic importance grow quickly over the last 12 months. Another anonymous interviewee said: “Because of the rapid growth of our [online and digital] performance we are making a material difference to our company’s overall year-on-year sales growth. So we’re not 50% of the business but contribution sales growth is significantly more than our sales as a percentage of the overall sales.
“For that reason we’re getting growing visibility because we’re basically helping the company grow quicker than it would otherwise… It’s about the customer, giving them great customer service and offering different service to a regular store. With digital we can provide more and more value added services, where a few years ago it might just be store locations and opening hours, now it’s personalised specials using data, just to actually help people shop and save money.”
Australian retailers are in a mature digital landscape
While ecommerce itself may still only make up a small percentage of overall sales for many retailers, the digital landscape touches every aspect of the retail marketing and branding journey. It would seem that Australia retailers are now fighting back against overseas competition by adopting digital marketing techniques and looking for new way of thinking through long term strategy, with customer experience and data and the centre.
Disclosure: Mark Cameron is an AIMIA Victorian committee member and led this year’s ‘AIMIA Retail Research Report’ team. The report was conducted with many of Australia’s leading retailers and was focused on gaining insights from decision makers in the areas of ecommerce and digital marketing. It can be downloaded here.