Where are we at with digital retailing in Australia at present? How much are CEOs and marketing managers setting aside in their budgets? In fact what is the typical digital spending profile?

Are we seeing retail spending on digital actually increase above spending in more traditional channels? What are Australian retailers actually spending their money on when it comes to digital and where are the focus areas?

Recently our consumer insights team went out to 20+ Australian retail CEO’s and marketing managers, to understand perceptions and comparative expenditure on digital.

I thought I would share some high level findings in this week’s Inside Retail column, with some of the highlights including:

  • Digital will be the major focus on marketing expenditure going forward. In fact on average, increases in marketing spend of 35+ per cent on digital, over prior period was the average.
  • Achieving a single view of the customer was the top priority for the majority of senior retail respondents, although most are in the early stages of development or initial assessments.
  • The top 4 priorities in order for retailers, in their digital expenditure are:
    1. Increase customer retention and repeat customers
    2. Drive footfall into shops
    3. Increase basket size/margins/profitability per customer
    4. New customer acquisitions
  • 88 per cent of CEOs interviewed use EDM reminders, which makes them the most mature and popular activity (although not innovative per se, rather refining what has always been available). This is while 75 per cent use retargeting and location based offers. Social sharing are currently the least popular.
  • Our retailers are focused on mobile enabled loyalty schemes, developing unique offers and increasing the sophistication of their EDM programs. Getting a single view of the customer and in depth customer understanding are in their early stages of adoption although with high perceived importance.
  • And where is the digital best practice and innovation coming from? With less than 20 per cent of retailers managing their digital activity largely with external partners and 50 per cent managing their digital activities in-house where the balance is a hybrid.

As we study global trends on retail digital uptake and compare, we see many Australian retailers still taking a “silo” approach to digital – that is not yet creating a true omnichannel business, with investment into information systems, shop experiences, and digital integration.

Rather we see that digital communications is the “territory” of marketing, helping to build a supply channel to an agile brand space, with the adage that a digital communication strategy is not about adding a room – but about rewiring the entire house. Our consumer insights study is showcasing CEO desire to invest in digital with good opportunity to implement from the customer perspective, as distinct from the organisational lens.


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