Australian retailers still not ready for internet: Experian report shows 53% don’t have online sales channel
Friday, September 28, 2012/
Retailers feel they’re losing business to offshore competitors but aren’t yet at a place where they can compete with these companies, or even local businesses that only operate online and at lower costs, a new report has found.
The Experian Marketing Services report, which surveyed 300 retailers from a range of sectors including automotive, sports, groceries, health and fashion, found that many are still slow to adopt a multichannel model – a staggering 53% said they have no online sales channel.
This multichannel approach has been lauded by retail giants such as David Jones and Myer as being instrumental to their survival.
The report found 53% of retailers surveyed have no online sales channel, while only 20% have had online sales channels for more than two years.
Just under three quarters of retailers get less than 25% of their sales from online: A finding, the report claims, which shows retailers “don’t view digital as a valuable sales channel”.
“Overall, the research points to reluctance among Australian retailers to invest in eCommerce,” the report found.
“Experian’s experience indicates that, in general, there appears to be reluctance among retailers to divert attention (and budget) away from traditional sales channels that have always performed well.”
Experian Marketing Services general manager Matthew Glasner told SmartCompany the results contrast the effort seen among bigger companies to get their business online.
“I think it’s a space that’s full of contradiction. All the statistics show it’s having a massive impact, and look at the noise people like Gerry Harvey make about adding tax on online sales – but that’s not the problem.”
“I think part of it is because, and this is my opinion, I think Australian retailers have seen online as a threat rather than an opportunity.”
Glasner also argues smaller retailers are missing out on the significant opportunity that retailers can find in collecting data on customers, which in turn can then be used to generate more sales.
“Aussie retailers are missing the boat on that one. The data you get is way richer online, because you get all the things they’ve looked at, all of their information, their payment methods, their credit cards, the type of device they looked at you on – the opportunity for a level of dialogue in that world doesn’t exist offline.”
The report has found five main reasons businesses aren’t investing in eCommerce:
1. Executive supports the move, but don’t take action – only 57% of retail marketers indicate managers believe online is a priority.
2. Lack of infrastructure, with only 45% saying CRM tools are important.
3. A lack of digital marketing to attract customers, especially in SEO: 51% of retailers don’t have SEO in their marketing strategy for the next 12 months.
4. A wariness of social media: 54% don’t use Twitter, and 47% don’t have a Facebook page and don’t intend to make one.
5. A lack of sophistication in actual retail storefronts, with only 21% using loyalty programs, only 45% using online vouchers and only 17% offering discount codes online. And, in a surprising revelation, only 22% use a “you may also like” feature on their websites.
Overall, the Experian survey has found Australian businesses are still lagging when it comes to online and they will need to overcome significant barriers if they want to succeed.
This strategy will become clearer when they solve these five problem areas, the report argues, along with investing more in the right eCommerce infrastructure.
It recommends five steps: defining strategies for both online and offline, collecting the right consumer data, investing in the right technology, building a good consumer engagement model and then tactically building campaigns across multiple channels.
Glasner says bricks and mortar businesses need to realise they need to spend as much money online as they do in opening a new location – which, in many cases, can be tens or hundreds of millions of dollars.
“It’s not a small investment, to make your online properties work as well as your offline stores. But it could potentially generate so much more business for you.”