The Australian retail industry has undergone significant shifts in recent times. With global brands like Amazon and ASOS making their mark, local retailers are often focussing efforts on differentiating themselves in a bid to remain relevant and profitable.

The shift to online continues to be a significant issue as many Australian retailers entered the channel very late and are still playing catch-up. Long before our large department stores launched an adequate online offering, contemporary customers were long accustomed to buying products from established retailers based overseas.

Yet while the prominence of online shopping has certainly exacerbated local industry challenges, this trend has masked a more fundamental problem. Current business models are simply failing to engage with an increasingly fickle yet tech-savvy generation of consumers.

Aligning on value

In order for any Australian retailer to be truly successful, the key is to identify how shoppers perceive value and align accordingly.

Yet with the likes of Black Friday and Cyber Monday fast becoming a phenomenon that is synonymous with increased sales and consumer spending, the temptation is to compete on price. However, while consumers are price conscious, product quality and the overall customer experience are still identified as the leading components for an individual’s purchase decision, according to recent Salmat insights.

Businesses are also starting to realise that these sale frenzies are not necessarily translating to increased profit, but rather are dragging spending forward from Christmas as opposed to adding to overall spending.

The fixation on price is a fundamental misalignment between consumers and Australian businesses which needs to be addressed. Not only is this an unsustainable practice for the wider industry, but the flow on effects will lead to a transactional relationship where there is no opportunity to delight customers.

Ultimately, the onus is on retailers to leverage the latest technology so as to ensure a genuine and authentic relationship which is both beneficial to its customers and the business.

Focus on the essentials, not the peripherals

Many retailers have realised the importance of genuine consumer relationships and have embarked on various journeys to capitalise on data insights. Whilst with the right intentions, the focus of many of these programs have been ill placed – often investing into peripherals like loyalty programs and store atmospherics to attract a certain demographic.

Whilst there’s nothing wrong with peripherals per se, this fails to address the factors which primarily influence the individual’s purchasing decision.

Loyalty programs can work to a certain extent, but this is largely due to the typical consumer’s over-reliance on discounts. Savvy shoppers have started to become adept at gamifying the retail calendar and know when to expect markdowns. Rather than relying on such peripherals to generate more purchases, retailers should lean on data analytics to ensure that they get the basics right.

Today’s consumers are extremely frivolous – especially those of a younger demographic – often adapting and purchasing what is trending. Given the rapid pace at which these trends change, retailers need to be agile in how they leverage the data that is available to them.

Traditionally, this has been achieved by building a shopper persona – based off previous purchases and behaviour. This has its place; however, many retail trends do not have a direct correlation to what’s happened in the past – making it difficult for retailers to adjust and take advantage of such opportunities directly.

This is where prescriptive analytics shine.

To put it simply, prescriptive analytics leverages data to give organisations a holistic view of the business. The rationale behind this approach is that a retailer should always know what’s happening within the business, why it’s happening, and how to take advantage of any opportunities.

For example, if an unexpected product begins to sell rapidly, prescriptive analytics can flag this trend immediately to the appropriate stakeholders – ensuring that the store is equipped from a stock inventory front. This puts the retailer in an advantageous situation where they can react to upcoming trends in a timely manner, whilst ensuring shopper satisfaction remains high due to product availability.


It’s tempting to identify the online channel as a primary disruptor to the Australian retail industry. However, as contemporary shoppers become increasingly fickle, the opportunity is for retailers to adopt a data-driven approach to reap the benefits of timely action. The retail space will only continue to become more and more competitive, and it is the data insights that will provide a competitive edge.

Guy Yehiav is general manager of Zebra Analytics at Zebra Technologies.