In recent years, the retail industry has undergone dramatic change with a huge shift towards ecommerce. Already in motion, the global pandemic delivered aggressive growth, accelerating this shift by more than five years in Australia.
However, growth in ecommerce is now stabilising. Australia is the eleventh largest ecommerce market, globally, with Aussies spending $62.3 billion online in 2021, 19.3% of total retail sales. With more than 80% of Australian households purchasing something online this year alone, driving national year-on-year ecommerce growth to 12.3%, there is significant competition for retailers to stand out. Consequently, brands need to focus on delivering a great customer experience that is consistent online and offline and to deliver on this across both the sale journey and post purchase.
Concerns about the economy and cost-of-living, alongside key changes across the ecommerce landscape from a shift in media spend from traditional to digital and the growth of remarkable online experiences mean that in order to continue to achieve success, there is still much work to be done by ecommerce leaders.
The rise of retail media
Retail media is not new, but is increasingly gaining traction in Australia. Driven by two key trends, retailers increasingly looking to monetise all available assets and increasing limitations around online tracking and protecting consumer privacy, Australian retail media is expected to reach $2.14 billion within the next five years, at a compound annual growth rate of 20.1%.
For brands to realise the full potential of retail media revenue, the first step is to conduct a thorough audit of available assets, which will help to determine the true value of all available assets.
Offering the ability to boost visibility on the ‘digital shelf’ and to target specific types at customers, at specific points in their buying journey, retail media offers a more efficient and cost-effective targeted approach than traditional media.
An increasing variety and availability of advertising options can create uncertainty for brands, often resulting in budgets being stretched too thin and decreasing return on investment. However, brands that use online retailers as a core channel for ecommerce sales should prepare to make greater investments into retail media, alongside traditional trade spend, to future proof continued success.
Taking personalisation to the next level
Customers have demanded increased personalisation for a number of years, but have been met with differing responses. With rapid advancements in personalisation technologies, offering a consistent and cross channel personalised experience that adapts to a customers’ needs and goals, in real-time, should be a non-negotiable.
Getting to know and impressing customers with relevant experiences, products, layouts and more will not only help to drive sales and increase conversation, but will also help to deliver repeat purchases and brand loyalty. As consumers become more savvy, they are increasingly choosing to spend money with brands they feel they have a connection with.
Personalisation helps to provide measurable journeys that engage customers at all touch points; from brand awareness to product discovery and repeat purchases, however ensuring that a personalisation solution aligns with and can deliver on a brands’ business goals, is key in achieving success for this strategy.
Leveraging social media
Consumers are spending more and more time on social media, but the way that users are engaging with brands is changing. No longer a place to promote their products and services, users are primarily engaging with unique creators and bite-sized video content.
The creator economy, worth more than $100 billion, has become highly profitable, with social platforms designed to enable individuals to deliver unique content. When partnering with creative and influential individuals it is essential to ensure that these appear to be authentic, and delivered in the creators’ own style, in order to deliver business success.
This will help brands to build greater engagement with their target audiences, further helping to generate leads and increase sales.
Ultimately, although growth is expected to slow, Australia’s e-commerce space is less established than other global competitors and it is still in a growth phase. As key ecommerce drivers continue to gain traction, there is real opportunity for brands to continue to experience ongoing ecommerce growth over the coming years. However, ensuring that digital marketing strategies reflect such growth drivers will help brands to identify which tactics they should prioritise and to distribute budget accordingly, delivering the greatest return on investment for future growth and success.
Mohammad Heidari Far is chief product officer at Resolution Digital.