Data and analytics are driving technologies that support innovation aimed at efficiency in the retail sector.
Presented by Shopfiy
Australian consumers are being cautious with their money, looking for value, and retailers are changing how they do business as a result. To succeed in this market, they are looking into innovation and technology to bring better customer engagement, increase efficiency and find new revenue streams.
“We are seeing some big changes in the retail industry in 2024 — the increasing demand for value, a surging preference for in-store shopping experiences, as well as a renewed focus on efficiency on the retailer side,” says Shaun Broughton, Shopify managing director APAC and Japan. “But it’s clear that retailers are leaning into more sophisticated, innovative strategies and tactics to deal with consumer demands and macroeconomic conditions.”
The Shopify Australian Retail Report 2024 unveils the nuances of key consumer trends and how retailers are responding.
“Retailers are grappling with huge shifts in both the operating and economic environments,” says Paul Zahra GAICD, CEO of the Australian Retailers Association.
Amid shrinking budgets and investors calling for greater focus on efficiency, CFOs are prioritising a few key investments while cancelling or pausing others. “Leaning on insights gleaned from some of Australia’s top retailers, including JB Hi-Fi, Toys’R’Us ANZ and the Brand Collective, this report uncovers the areas in which retailers are planning to increase or decrease investment, while examining the investments that have driven the greatest overall value,” says Zahra. “Interestingly, investments in business intelligence will take precedence over AI and automation.”
Likewise, 58 per cent of retailers are increasing investment in ecommerce systems in the next year, a key digital component that not only drives operational efficiencies, but also customer reach, engagement and experience.
Value driving sales
Aaron Gard, Brand Collective group general manager, digital and loyalty, says it’s more important than ever that new technology comes with an easy way to measure its success criteria. “In ecommerce, we’re always optimising and attacking the problem from all angles, so it’s important that we can easily define what success looks like for that specific product or service, and that it’s easily measurable.”
Even though pricing is the top factor driving consumer preferences and customer churn, retailers need to carefully assess the feasibility of competing purely on price and its impact on sustainable profitability. Loyalty rewards, better-quality goods and a seamless customer experience might make more sense as differentiating factors.
“When we relaunched our website in 2024, we reduced our customer checkout process from three steps to two,” says Mathew Walker, head of ecommerce and digital ANZ for Petstock Group. “This has led to faster transaction speeds and an improved experience for customers. Conversion has been higher and the drop-off rate has improved.”
The survey of 1048 Australian consumers and 205 senior business decision-makers in Australian retail businesses also found that higher supply chain costs are a particularly troublesome inflation-related outcome of the macroeconomic climate, especially amongst larger retailers.
Reshaping retail
Data, digital experiences and commerce solutions are playing an increasingly vital role in business success. More than 90 per cent of retail leaders surveyed believe that the role of the chief technology officer (CTO) contributes to the evolution of the business and/or revenue growth.
With the CTO in the driver’s seat, most retailers plan to invest in innovation in the coming year, the Shopify survey found.
Ultimately, it’s 2024, which means that there is usually a technological solution to business challenges. “Where in prior years we saw companies adopt specialist solutions that led to bloated tech budgets, we’re now seeing Aussie retailers becoming more conscious of the total cost of ownership for a solution,” says Zahra.
“Given current market pressures, retailers should double down on what they’re best at, delivering exceptional customer experiences, providing customers with high-value products and staying attuned to local customer preferences. This research illustrates how important these factors are to future growth.”
With Shopify, retailers have the tools to reduce work, costs and risks, while also accelerating time to market, whether it’s the delivery of new online stores, features, products, brands or markets.
Download the Shopify Australian Retail Report here.
Latest news
Already a member?
Login to view this content