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Online shopping booming, but loyalty declining Featured

The number of Australian shoppers who say their last purchase was online has trebled in just 12 months.

But online shoppers are becoming much less loyal and much more likely to be critical of the services they receive.

The findings are contained in the Australian edition of a major IBM study of global consumer trends, released yesterday. The study reveals a significant downward trend in the number of inline consumers who can be described as ‘advocates’, falling significantly from 32% in 2013 to 13% in 2014.

At the same time, there is a surge in ‘antagonists’ from 5% in 2013 to 24% in 2014. IBM says these trends indicate a marked decrease in customer loyalty amongst Australian consumers. The impact for retailers is significant, as advocates have the biggest influence on friends and family, have bigger basket size and spend more.

The annual study of more than 1,800 Australian consumers also confirms that online shopping is growing rapidly in Australia, with 15% of customers saying their last purchase was online (up from 5% in 2013).

“As today’s tech-loving shoppers continue to embrace new technologies faster than retailers they have high expectations of customer service in line with global retailers,” said Margy Osmond, CEO of Australian National Retailers Association, commenting on the report.

“The challenge for Australian retailers continues: delivering a seamless shopping experience across in-store and online, that keeps pace with the rapidly changing expectations of the technology empowered customer, to drive increased loyalty.”

Key findings from the report:

  • More consumers shopping online –  in 2014 15% said their last purchase was online compared to 5% in 2013
  • Seamless omnichannel is essential to drive shopper loyalty and business performance
  • Consumers are more willing to provide all types of information in return for personalised service
  • 34% of consumers will share location based information, 18% in 2012
  • 32% of consumers posted about a retailer they had shopped with
  • Friend’s posts or pins about items purchased (51%) are the most influential.

“Consumers are entering stores with more information about the type of product they want to purchase than ever before,” said Osmond. “Aussie retailers have been vigorously investing in capabilities that will fundamentally change the customer experience over the next decade. These trends will enhance the shopping experience helping build long-term customer loyalty and attract new clients.

“We are time poor and technologically rich. As consumers we are looking for experiences and conveniences. There’s no doubt the internet has changed the way consumers shop and communicate with retailers.

”As retailers gain a greater understanding of the value and power these technologies bring to the shopping experience, they will be able to offer an even more individualised shopping experience’: said Osmond. “This is a must for building stronger relationships with consumers keeping spending onshore.”

Read on for more commentary on the report

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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire and editor of sister publication CommsWire. He is also founder and Research Director of Connection Research, a market research and analysis firm specialising in the convergence of sustainable, digital and environmental technologies. He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.

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