Tuesday, 28 May 2019 10:12

5G playing big part in changing retail sector, consumer shopping habits Featured


The emergence of 5G and the use of smartphone cameras and other devices is set to bring significant change to consumer shopping habits and the retail sector, according to newly released research.

According to the latest mobile commerce trends report from Paypal, new technologies like Visual Search and Shoppable Videos are “changing” the game for online retail in Australia.

Paypal says the research shows that 5G will change mobile commerce and open new opportunities for retailers to leverage Visual Search and Shoppable Video.

According to the research one-in-five retailers said 5G will enable them to implement new shopping experiences like Visual Search and Shoppable Video – and to increase sales.

Visual Search allows mobile users to upload a picture of a product, either from real life or found online — such as shoes, sunglasses or a vase — and find similar items for purchase.

And Shoppable Video brings clickable links directly into video on to a users own site or other channels like YouTube.

Paypal says that not only do these trends and new technologies offer opportunities for retailers to attract new customers, but they can also drive revenue growth.

And, Paypal says the research uncovered strong consumer interest in Visual Search and Shoppable Video, particularly among younger shoppers – while 5G had the potential to “power the future of online shopping”.

The research revealed that one-in-five Australians (20%) have already used Visual Search and half of those that are yet to try it, want to.

Paypal says younger shoppers show stronger interest in Visual Search with 27% of Gen Y having already used the technology. Meanwhile, one-in-six consumers (16%) have already used Shoppable Video to find information or make a purchase, and nearly a third (29%) would like to use it.

Paypal says the research also revealed that despite consumer interest and the business potential of these “innovative shopping experiences”, less than one-in-ten retailers have adopted Visual Search (8%) and Shoppable Video (5%) and close to half of all retailers were not even aware of these innovations when surveyed: Visual Search awareness 46%,Shoppable Video awareness 55%).

“Most retailers however do understand the benefits Visual Search and Shoppable video could bring, with 82% expecting Visual Search and Shoppable Video would increase sales,” Paypal notes.

Paypal says retail sales must be “mobile-optimised” to maximise result, with the research showing thatmost Australians (57%) now prefer to shop the sales online rather than in-store.

“However, despite this preference for online, we still do just more than half (51%) of our sale shopping at physical retail. This preference to shop the sales online is significantly higher for younger shoppers (Gen Z 63%, Gen Y 65%),” says Paypal.

And the research reveals that younger shoppers also now use their mobile devices to shop the sales more (Gen Z 33%) than they use their laptops and desktops (Gen Z 29%).

“If you’re on sale – you’ve got to be online and mobile-optimised, particularly if you’re targeting youth markets, where the majority do their online sale shopping via mobile,” said Peter Cowan, director Mid-Market and Small Business Partners at PayPal Australia.

“Retailers should also think outside of the traditional sales periods and consider offering their customers personalised discounts throughout the year.”

Paypal also says Australian shoppers are becoming more savvy in their shopping habits, with the research finding that close to seven-in-ten Australians are always on the lookout for sales or discounts when buying online, and over half (58%) have made a sales-driven impulse purchase in the last quarter.

And Paypal says younger Australians are even more likely to always be looking for sales (Gen Z 77%; Gen Y 73%) as well as more affluent shoppers with annual incomes of $150K+ (74%), regardless of age.

According to the Trends Report, consumers have become conditioned to regular discounts from retailers, with half of all respondents (50%) saying they have waited until an item was on sale before buying it online.

And Paypal says ”this skyrockets” to three quarters of Gen Z (73%) and two in three Gen Y respondents (65%), while as many as 16% of all respondents said they only shop online when items are on sale.

The research reveals that in the last quarter alone, the average shopper bought 2.7 impulse items and spent $108 on unplanned purchases because they saw items on sale.

And Gen Y are the biggest impulse spenders, buying an average of 3.6 unplanned items at a cost of $145 in the last 3 months.

“Sales drive action, but despite strong consumer demand for regular discounts, only one-in-five online retailers (19%) reported that they always have at least one sale running,” Cowan said.

“This gap between consumers’ desire for finding a bargain and retailers sales activity highlights an opportunity that retailers can leverage to drive greater sales volumes and attract new customers.

“We found that over a third of Australians (37%) have bought a brand online they wouldn’t usually buy because it was on sale, which is huge for smaller retailers wanting to build brand awareness and win new customers.”

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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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