There’s no doubt 2023 was a challenging year for scores of Australian retailers. While supermarkets continued to enjoy record profits – Woolworths and Coles increased their profits by almost five per cent in FY2023 – brands and businesses that rely on the discretionary dollar had to work harder than ever for it.
Little surprise, given millions of households are doing it tough, courtesy of rising interest rates and an increase in the cost of goods and services across the board. Half of all Australians are worse off financially than they were a year ago and 25 per cent only have enough to cover the basics, according to Nielsen IQ research published in September 2023.
They’ve adapted their buying habits accordingly: shopping around to find the best bargains; and switching to discount retailers and private label brands when they do the weekly grocery shop.
Tight times ahead
2024 is likely to see these parsimonious practices persist, with the Reserve Bank predicting subdued household consumption growth over the upcoming quarters.
‘This reflects weak growth in real disposable incomes as the strong growth in labour incomes is being more than offset by high consumer price inflation, the earlier tightening in monetary policy and higher tax payable,’ the Bank’s August 2023 Economic Outlook noted.
Against that backdrop, local retailers will need to pull out all the stops to ensure their offerings are keenly priced and their customer experiences compelling, in both their bricks and mortar outlets and in the online realm, where almost 13 per cent of the country’s retail sales now take place, according to NAB’s Online Retail Sales Index September 2023.
Saving money and spending securely
But, when it comes to parting with their hard-earned dollars online, today’s customers aren’t only concerned about value for money and seamless service. Increasingly, they’re looking for assurance the personal data they supply to brands and businesses will be safely collected and stored.
In the wake of the 2022 Optus and Medibank hacks, which saw the personal details of more than 11 million customers compromised, individuals have become alive to the risk of identity theft and it has them worried.
In fact, identity theft is now the chief concern for 65 per cent of Australians when their details are posted or stored online, ahead of financial loss and government surveillance, according to Ping Identity’s latest survey evaluating Australian consumer sentiment around engaging with brands online.
Given Optus and Medibank customers were encouraged to replace their passports and drivers licences as quickly as possible to reduce their risk of identity theft after news of the hacks broke, it’s not hard to see why.
Online protection angst
So worried are Australians, in fact, that they’re changing their online buying habits, in a bid to protect their personal information.
Forty-five per cent of respondents said they would only shop at reputable stores with which they were already familiar, during the 2023 festive season. Forty-one per cent would pay with third party payment apps, such as PayPal and ApplePay, while 18 per cent would use gift cards, rather than their own credit cards, to cover their purchases.
Meanwhile, online shoppers are on heightened alert for suspicious phishing links masquerading as special offers and deep cut discounts from their preferred brands and businesses.
Artificial Intelligence has only compounded Australians’ fear of having their personal data on the dark web or in the hands of cyber criminals intent on exploiting it for commercial gain. More than half of respondents were concerned about the prospect of AI technology being harnessed to create impersonations.
Just 52 percent felt comfortable sharing a range of personal information, including their gender, age, phone number and date of birth, with retailers and only nine per cent stated they had full trust in the organisations that manage their identity data.
Providing the protection customers are craving
So, can brands and businesses allay these fears and reassure shoppers that spending money online won’t result in their personal and financial details being compromised?
The answer is yes – by implementing robust identity and access management processes that make it much more difficult for hackers and cyber-criminals to gain the ‘in’ they’re seeking.
Biometric authentication, Multi-Factor Authentication and one-time log in codes sent via text or email can provide customers with enhanced protection and an increased sense of comfort when they’re browsing and buying online.
For Australian businesses that hope to retain and grow their share of the country’s retail spend in 2024, it’s likely to prove an essential investment and one they can ill afford not to make.
Ashley Diffey is vice president of sales for APAC and Japan at Ping Identity.