Next month, the first Australian consumer study into multichannel retailing will be released. Assia Benmedjdoub gets an exclusive preview of the findings at an industry gathering.
When the chief executive of Myer gave the opening address at an industry conference last month, he did so with the help of a few notes on his iPad.
Earlier that morning in Melbourne, Bernie Brookes also plugged into his MP3 player as he sorted through overnight emails on his smartphone.
By the time he took to the podium for a breakfast briefing organised by the Australian Centre for Retail Studies (ACRS), he was well equipped to introduce the topic of the day: the importance of multichannel retailing.
According to ACRS research fellow Dr Sean Sands, Brookes is not the only retail executive in Australia to question the future of the traditional bricks-and-mortar model.
Both the funding and content of the seminar was the result of a forum the ACRS conducted with 10 Australian CEOs earlier this year.
The aim of the forum was to determine the latest research focus for the centre, which gathers funding for such projects through major retail partners.
Among those to invest in the latest round were industry giants Pacific Brands, owner of everyday staples such as Bonds and Berlei, retail development firm AMP Capital Shopping Centres, and department store Myer.
The pressing question for them was: what value Australian consumers placed on different channels (traditional and emerging) and how retailers could capitalise on these.
A six-month study involving a large- scale consumer survey followed, and the results, certainly for clothing and footwear retailers, means there is still breathing room for those struggling with emerging channels.
A strong 67 per cent of respondents still use shopping malls for pre-purchase research and purchases; 25 per cent use stores located in shopping strips for purchases; and just four per make purchases directly through a retailers’ website.
This differed from other categories such as ‘holiday travel’ for instance, which saw 64 per cent of respondents making their purchases online. With reports that a significant portion of e-spending is still heading overseas however, the impetus for all Australian retailers to broaden their channels is growing.
To identify what sorts of demand lie where, the ACRS study asked consumers what channels they valued most: store offer, which addressed demand for bricks-and-mortar sites only; traditional, which looked at print catalogues and internet channels; and emerging, which addressed social media channels, mobile phones and shopping centre kiosks.
The study identified four macro-segments of shoppers, two of which represented 49 per cent of respondents who were pro-cross-channel shoppers. In other words, nearly half of Australian consumers are open to a more interactive shopping experience.
While 10 micro-segments were also revealed within each category, the four macro-segments are:
Loyal shoppers: Largely comprised of baby boomers, these consumers rate ‘store’ as the most important channel for pre-purchase research, purchase and after-sales behaviour. They represent 34 per cent of the market and have an average spend of $78. The study found 20 per cent of these consumers owned a smartphone.
Adopters: These consumers place a relatively high importance on all channels, with more emphasis than most on emerging mediums such as mobile phone applications and social media sites like Facebook and YouTube. Clocking in an average spend of $84, they represent 28 per cent of the market and are largely made up of Gen Y and Gen X consumers. The study found 22 per cent of these own a smartphone.
Traditionals: Placing the highest importance on store and traditional channels (catalogue, internet), traditional shoppers see little importance in emerging mediums. They represent 21 per cent of the market and have an average spend of $93. Only 16 per cent own a smartphone, with most shoppers in this segment from Gen Y and Gen X.
Functional: Representing 17 per cent of the market share, these reluctant shoppers place a low importance across all channels. Shopping out of necessity, they clock in an average spend of $78, with 27 per cent surprisingly owning a smartphone. The functional shopper is cross-generational.
ACRS research fellow Carla Ferraro, who presented global multichannel trends at the seminar, believes the national landscape will change dramatically over the next two to three years as retailers look to address these new pockets of demand.
Already there is strong speculation that retailing juggernaut Westfield will launch the country’s first virtual shopping centre as early as this year. Westfield is said to be in final negotiations with its tenants for inclusion on the cutting-edge website.
Ferraro named Supre as a ‘best practice’ multichannel retailer in Australia. Ragtrader caught up with Supre’s international brand manager (right).