Australian retailers are willing to invest increasing resources into staffing, supply chain and marketing their online businesses, according to the findings of the AIMIA Online Retailing Insights Research study, but are trying to do so with bricks-and-mortar style systems, supply chain and people.
The research findings, were released at the end of May by the Australian Interactive Media Industry Association (AIMIA).
‘Our research looks at tracking what Australian retailers themselves are doing about adopting and evolving their “Omni-channel” offering,’ said Rob Wong, chair of the AIMIA Retail Industry Group.
‘This year’s research shows, as expected, growing adoption rates across the board for interactive, digital and e-tail services as retailers reorganise resources to focus more attention on the digital consumer, but also highlights the internal resourcing and culture barriers that are hampering more rapid successful implementation.
‘Savvy retailers are looking to recruit multi-channel directors and managers, and create cross functional teams to grow their online business and presence.
The report highlights internal resourcing and cultural barriers that are hampering more rapid successful implementation. The reports introduction notes: ‘The stark reality for the industry is there are precious few senior, experienced “client side” personnel in Australia – meaning most retail organisations are learning as they go. This places Australian retailers at a disadvantage, when experienced international retailers enter Australia – either directly through stores or simply through online marketing to Australian audiences.’
Other key findings from the research include:
– Smartphones are being used to make customer interactions easier. Retailers believe that the link between mobile and social media is important as consumers also access social media from their smartphone – but do not have highly developed strategies;
– Online stores are fast becoming top performing stores, with leading multichannel retailers measuring the success of their retail stores relative to their online store;
– Online sales in the majority of cases confirm that e-tail sales are less than 5 percent, however smaller retailers are recording a much higher e-tail sales share.One-third of retailers with 100+ stores do not know how much online sales contribute to their total sales revenue, which suggests it is not significant;
– Savvy retailers were looking to recruit multichannel directors/managers, and attempting to create cross-functional teams. Sometimes, a stand-alone unit had been created within the organisation, but more generally the structure remained within the marketing team. However this is shifting, as more retailers manage their online strategy across multiple departments;
– Online strategy is driven primarily by senior management, with an abundance of external resources being used – 26 percent of retailers rely on agencies, and 31 percent use external technical support.
Australian online retailing in 2012
• 75 percent of all retailers (large and small) now have an online presence and 43 percent are selling online;
• 88 percent are advertising online (even without a website);
• Retailers are using a wider variety of digital channels/tools with email, social, video and mobile growing rapidly over the last year;
• Almost a third of retailers are leveraging social media, but there is still uncertainty as to how to extract maximum value from it;
• Mobile e-tailing is embryonic for most, perceived as expensive – but having huge growth
• Retailers are using their TV resources to create content – not just ads;
• SEO, email and online catalogues are the most popular forms of online promotional strategies.
• Internal expertise, organisational culture, systems integration, and supply chain management continue to be the biggest barriers to growth;
• Hard to fnd experienced senior operation staff who know e-tailing (not just technology);
• Consumers are not the problem (they get it and want it);
2013 and beyond
• 83 percent of retailers will increase their online budgets to further focus on driving sales (through both physical and online stores) and building multichannel operational capabilities;
• Retailers are reliant on a wide number of external partners to set and implement strategies;
• Most Australian retailers have accepted e-tailing is not going away.
The annual research findings are facilitated by AIMIA in conjunction with the Australian Centre for Retail Studies. The research is supported by Multimedia Victoria, INC Media and Reactive Media.