Expectation gap widens

shoppers, shopping, centre, mallAs the digital and physical worlds of retail converge, the expectation gap between consumers and their primary retailers is widening.

Australian data from IBM’s 2015 Global Smarter Consumer study reveals that that consumer confidence and their willingness to spend more have significantly increased. However, the lack of personalised service offerings across a number of consumer touch points is driving a decline in engagement and loyalty to a retailer.

Of the 1,800 Australians surveyed, the empowered consumer now expects digital solutions that enhance service, more flexibility in areas such as returns, and digital loyalty programs. This means shoppers today are leaving retailers who fall short on delivering a seamless, in-store and online experience.

“All signs point to Australians embracing all aspects of digital,” said Anna McPhee, Retail Council CEO. “This presents great opportunities and mounting pressure for retailers to deliver a revolution in the shopping experience, rather than incremental change. The convergence of digital and physical retail channels is being driven by consumer desire for more convenience, and it’s up to retailers to deliver a seamless service. Doing things smarter and faster requires agile thinking and organisations are working to improve mobile, online and in-store fulfilment.”

Transparent inventory information is a key concern for consumers. The ability to see if an item is in stock before a shopper goes to the store was among the most appealing capabilities that would drive a consumer to switch. Fifty-seven per cent of consumers agreed they would switch to a retailer who could provide this information.

Consumers also expect retail assistants to be able to resolve inventory issues, with more than 50 per cent of Australian respondents citing this capability as a differentiator in the selection of a retailer. Additionally, 25 per cent of Australian respondents cited the importance for store staff to be able to offer personalised promotions based on purchase history or preferences as a differentiated and unique experience.

“This year’s survey indicates Australian retailers need to be more agile and adopt continuous change quickly to meet and exceed consumer expectations,” said Ian Wong, partner, interactive experience, IBM Australia and New Zealand. “It’s no coincidence that low advocacy ratings locally reflect a growing awareness among Australian shoppers for alternate channels available through retailers in the US, UK and elsewhere. This indicates an opportunity for growth for local retailers who can meet these consumer expectations.”

The survey was also conducted in 15 countries and brand advocacy in Australia remains lower than the global average, declining from 13 per cent in 2014 to 10 per cent in 2015 (compared to a global drop from 21 per cent to 15 per cent) while unengaged consumers has increased from 24 per cent to 37 per cent, illustrating brand loyalty is suffering.

Read more about the evolving relationship between retailers and consumers in this week’s issue of Inside Retail PREMIUM.  

IBM study

IBM study

Comments

4 comments

  1. Michael Baker posted on July 9, 2015

    Gee this is awful 'research'. It is an affront both to economics and to commonsense. First, it's self-serving. (I'm sure IBM has, ahem, no interest in Australians embracing a digital experience.) Second, it misses the point entirely, and, I might say, intentionally, since it frames questions in such a way as to get specific answers. Australians are not interested in a digital experience that enhances service. Neither are Americans, Nigerians or the Maltese or the Uzbegs. Rather, they are interested in a positive shopping experience and in buying affordable goods. Period, end of story. How you get there is not important. It is important only that you try to get there, and that your shopper perceives that you are trying to get there. Technology is only one of several ways. It is still not the cheapest and it is still unproven as a substitute for human judgement. (e.g. despite the decades-long existence of RFID technology to drive inventory transparency, we still go into our supermarkets on a weekly basis and can't find stuff we found the week before.) Why are we continually subjected to such a daily battering from junk research? And why doesn't IBM just come out and admit that it's research is to sell more IBM products? reply

  2. John Poulakis posted on July 9, 2015

    I have to agree with Micheal's comments above. The whole retail industry is being shoehorned into a position that I feel totally unrealistic. The thing that drives our business " HARROLDS AUSTRALIA"S LUXURY DEPARTMENT STORE" is the fact that customers come in to find a particular product from a particular brand. They come into our stores to be tantalised by the product that we carry, they might come in for one product and leave with another. They enjoy the one one service the information that is passed on by the trained staff and that ability to touch and feel any product. If what IBM research finds were correct we would be out of business by now. reply

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