Retail consumer trends and the customer experience | KPMG | AU
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Retail consumer trends and the customer experience

Retail consumer trends and the customer experience

Australian brands are strongly impacted by changing consumer behaviours and expectations, but there is great potential to turn this into opportunity.

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KPMG Australia

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Consumers in a retail shopping centre

The grocery and non-grocery retail industries have been rated as the best performing sectors in customer experience (CX) in the Australian market, coming in at first and second places respectively in KPMG’s Customer Experience Excellent Report for 2018. Australians perceive these sectors as strong in the delivery of fast and efficient service and products.

In grocery, Australian consumers perceived beverage retailer Dan Murphy’s as the best performing CX brand, noting its light and open store layouts, vast product range, competitive prices, and friendly employees.

In non-grocery, hardware store Bunnings was rated as the best CX brand, exceeding expectations with its convenient store locations, parking, wide product range, and knowledgeable employees.

While these are positive examples, Australian brands must continue to adapt to fundamental changes in the market, driven by emerging technologies, lower barriers to entry, and international competition continually arriving in Australia.

They are also impacted by continually changing consumer trends, including:

  • Local and ethical: Morally driven consumers are demanding products that are sourced, grown, farmed, manufactured, designed and packaged locally. They want their products and services to uphold ethical standards.
  • Access over ownership: Consumers want to lease rather than purchase items, perhaps to challenge over-consumption and traditional models of high price, once-off usage.
  • Frequent purchases: Consumers are challenging the traditional grocery shopping model by visiting stores more frequently, but purchasing small amounts per visit. Today, more than 50 percent of Australian grocery shoppers visit a supermarket several times a week, and more than 6 percent visit every day. Online grocery sales are expected to increase dramatically, with 29.3 percent considering shopping online for groceries in the next 12 months (Roy Morgan Single Source, Asteroid, June 2018, Roy Morgan Research Ltd).

Capitalising on change

Australian retailers can capitalise on this ever-changing landscape by building on their strengths and leveraging their knowledge of the Australian consumer to deliver exceptional, personalised customer experiences.

Here are some ways to stay a step ahead:

  • Improve the omni-channel experience: This means providing a better integration of online stores with the physical ‘bricks-and-mortar’ channel. Food delivery trucks are now commonplace in Australian cities, however survey respondents find the online experience of many traditional Australian retailers below par, with pain points including items being out of stock, high delivery costs, and complicated return processes. A solution could be stores without shelves. These integrate both physical and online benefits, with physical stores acting as the front to the online store. Only a small selection of items are available to try, with the full range and purchasing activities available on iPads and screens. This could enable Australian brands to lower overhead costs and become more flexible and accessible.
  • Leverage new technology: Survey respondents rate the retail sector highly when it comes to minimising Time and Effort (one of our Six Pillars of customer experience excellence), however the system is far from perfect. While Australia is leading the charge with self-checkout terminals, some survey respondents feel they have to choose between a poor user experience at the self-checkout, and a long wait at a traditional counter. Removing checkouts completely could address this pain point. Amazon Go has opened its first checkout-free store in Seattle, and there is still the opportunity to be the first mover implementing this in the Australian retail market.
  • Go hyper-local: Tapping into the hyper-local trend can help Australian retailers tackle increased competition from an influx of international brands. Offering products and produce that are sourced directly from the local community might be a point of differentiation that resonates with the moral consumer who is prepared to pay a premium. A hyper-local offer from an iconic Australian brand may provide symbolic value that international competition can’t provide.

In summary

As consumer demands keep changing, new technologies emerge, and international retailers continue to cement their place in Australia, Australian retailers must be prepared to focus hard on customer experience excellence. Being aware of trends, and finding opportunity in those to surprise and delight customers, is a key step towards success.

After time in the spotlight, and facing new competitors, Financial Services companies have to be prepared to transform to remain relevant. Find out more in Great expectations on our financial institutions.

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