Australian brands are failing to deliver the digital experiences that consumers have come to expect, ultimately costing them loyalty and sales, according to research by SAP.
Earlier this year Myer chief executive Richard Umbers admitted the retailer has struggled to meet the modern and omni-channel expectations of its customers after announcing a 23% drop in net profits in its first half.
Umbers said that digitisation had changed the way consumers shop, altering their expectations of retailers significantly. And while Myer has been working through a strategic review to better address modern demands, he conceded the retail sector hadn’t yet done enough to meet these higher expectations.
“There is strong evidence that department stores can transform and be inspirational to customers,” Umbers said.
“Our international peers have responded to disruption by leading in omni-channel, by reinventing the in-store experience, overhauling the range, and by differentiating though innovation.”
How Aussie businesses are failing in digital
SAP’s first-ever Australian Digital Experience Report offers detailed insights on Australia’s digital expectations and the ability of brands to meet them. It found almost half of the report’s 3000 respondents (47%) were unsatisfied with the digital experiences delivered by the nation’s 34 largest organisations.
Consumers rated core aspects of the digital experience from two or more brands they regularly interact with. The results offer detailed insights on consumer expectations and the ability of Australian brands to meet them.
The report assessed consumers’ direct ratings of 34 Australian brands across seven consumer-focused industries, including retail, telecommunications and internet service providers, insurance, banking, government and utilities.
It found that Australian brands aren’t delivering the digital experience that consumers want, with just one brand from the 34 obtaining a positive score.
The report also highlights the role the digitally savvy consumer plays in driving a positive digital experience score for brands.
While Australians are some of the most enthusiastic adopters of digital, cloud and mobile technology globally, recent research shows that consumers have been overlooked when it comes to quality of the digital experience.
Aussie businesses are failing to deliver the digital experience customers want, such as being available anytime, from any device, the research found.
The cost of a top digital site
However, creating a top-notch digital experience can be a significant investment. Australian online beauty store Adore Beauty recently invested more than $200,000 in a major website and backend systems overhaul to improve the mobile experience, as well as integrated inventory management to facilitate faster delivery.
Chief executive Kate Morris says consumers want to get the product they’re after straight to the checkout within a couple of clicks, and delivering that experience is paramount.
“I’m horrified that in Australia, so many businesses aren’t even getting the basics right,” Morris says.
“The digital experience elsewhere in the world has moved on to personalisation, curation and customisation. We’re competing globally now, so we really need to catch up.
“It’s not enough to just build a website and think it’s finished – it’s never finished. The digital world moves so quickly you always have to be trying harder, or you’ll be left behind.”
Businesses also need to be thinking about the customer experience from a holistic perspective, not just the website, Morris says.
“When customers comment on their experiences with us, they talk about so much more than just the website: they walk about the extra service they might have received over the phone or email; the speed of delivery; how their order was presented in terms of samples and extras,” she says.
“You have to think about it end-to-end. You can have the greatest website in the world, but customers won’t shop there if they don’t get their orders on time.”
Leading digital industries
The SAP report revealed the grocery retail industry is the leading performer, yet on the whole still had more unsatisfied consumers than delighted ones.
Banking and insurance were the next best performers, with telecommunications and utilities scoring lowest.
“In today’s digital world, the consumer is in full control,” John Ruthven, president and managing director of SAP Australia and New Zealand, says.
“Brands need a much deeper understanding of their digital experience performance if they’re to keep their customers and stay competitive.
“With our research, we’re helping Australian organisations not only identify the link between digital experience and business outcomes, but offering a framework that helps them measure and manage their digital-experience performance from their customers’ perspective.”
The impact of poor digital performance
The research highlights a link between the digital experience and business outcomes.
Poor digital experiences from some of our biggest and best-known brands have alienated consumers, and digital experiences that fail to delight consumers can negatively influence customer loyalty and advocacy, leading to revenue loss.
You can help us (and help yourself)
Small and medium businesses and startups have never needed credible, independent journalism and information more than now.
That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.
Now, there’s a way you can help us keep doing this: by becoming a SmartCompany supporter.
Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.