Omni-Channel in Australian Retail Market Only at 25.5%
Thursday, November 23, 2017

Categories: Click & Collect

Omni-Channel in Australian Retail Market Only at 25.5%

Australia’s click and collect market shows solid potential. However, with only 25.5% of retailers offering the service, there is ample opportunity for retailers to grow with the market. This is what new research, the OrderDynamics Omni-1000 Australia, found. The study investigates 200+ retailers specifically in Australia & New Zealand. Rather than asking retail executives whether they ‘think’ their retail operations are running omni-channel services, the study stepped through the purchase of items online observing for click & collect, or in-store pickup options. Like the US and Canadian markets, the Australian retail market is in its early days of omni-channel capabilities. Rather than seeing this as a negative aspect, it is an opportunity. Retailers in the Australian retail market have a chance to leap ahead of almost three quarters of their competitors by building up their own retail capabilities to offer ship-from-store, in-store pickup and other omni-channel services.“Click & Collect, or Buy- Online-Pickup-In-Store (BOPIS) is evident in 25.5% of today’s Australian retail sites.”

Other Omni-Channel Factors

Fortunately, most Australian retailers have realized the importance of inventory visibility to customers. If a shopper goes online, and does not see what they want, and does not get a sense that your store has it, then they will just move on to the next store that proves they have the desired merchandise. It is just that simple.

The Omni-1000 Australia found that 72.5% of retailers provide at least a basic level of inventory visibility, on the website. Although 89.0% of retailers have an ecommerce ready website, this still left 11% without. Of these merchants without ecommerce, only 14% showed basic inventory visibility to their customers on their website. This group is definitely in the danger zone. Retailers in this group are most likely to experience the very rapid decline in business as the importance of online and omni-channel retailing take hold.

Multi-Channel Merchants

Among multi-channel merchants, 74% provide basic inventory visibility. Multi-channel merchants being those with an ecommerce site, and physical stores, but which have not yet interconnected or integrated their multiple channels for a seamless buying experience. For example, a customer will NOT be able to order online and request an in-store pickup from a multi-channel merchant.

“Retailers across Australia realize the importance of inventory visibility, as 72.5% provide at least a basic in-stock indicator on their site.”The highest levels of inventory visibility came from the omni-channel retailers who offered click and collect services. 94.1% of these retailers provided inventory visibility online. In fact, omni-channel merchants were most likely to provide store level details about inventory (merchandise in a given store) at 58.8%. Omni-channel merchants were also most likely to provide detailed store level inventory information online, at 17.6%. In this detailed case, these merchants provided inventory level information about a particular store, and providing the number available of that particular item. So, a customer could see that the store closest to them on Oxford Street in Paddington, has only 2 pair of shoes left of a particular style. Not a bad move, for inspiring a sense of urgency with the customer.

In-Store Returns

Since so many retailers have ecommerce sites, there will be a large rise in returns. Online orders typically experience anywhere from 20% – 40% return rates, compared to 8% for in-store purchases. Given that almost 60% of shoppers prefer to return items in-store, many retailers now accept in-store returns for online purchase. In fact, 57.0% of retailers accept BORIS returns – which stands for ‘Buy Online Return In-Store’. Again, among omni-channel retailers, this rate is 80.4%.

 

Are Retailers Truly Offering Omnichannel? Find out in benchmark report.

 

Return Conditions

Allowances for item returns seemed short compared to other countries. 41.5% of Australian retailers enforce 0-29 day return policies. Second to 39-59 day return policies, for 32.0% of retailers. 60-90 day return policies drop off dramatically to only 1.5% of retailers allowing this range.

An opportunity for Australian retailers is to offer 60-90 day returns. Run this either on selected items, or for a particular promotional period. It could be an good non-price focused competitive tool.

Retailer Return Days Allowance

Click and Collect in Australia

If a shopper were interested in making a click and collect purchase, they are best to look to the large retailers. Click and collect adoption is highest among large retailers with 251+ store locations. 41.7% of large retailers in the Australian retail market offer click and collect to shoppers. Least likely to offer omni-channel services are those retailers with 10-50 store locations. Here, only 16.8% offer click and collect.

Again, an interesting opportunity for a retailer in the 10-50 store category, is to actively offer and promote their omni-channel services. Given that mostly large brands offer the service, doing so for a mid-sized chain, differentiates it from like-sized competitors. Providing omni-channel services to customers gives the impression that the retailer competes toe to toe with the largest of retailers in Australia. Depending on the brand focus, this could provide a positive halo effect that can drive more in-store traffic (footfall), thereby increasing sales.

In-Store Pickup Delays“Sixty-nine percent of retailers will have an order ready for pickup within 24 hours.”

Fortunately, 69.2% of Australian omni-channel providers will have an order ready for pickup within 24 hours. This is good news, both for the retailer and for the shopper. Many click and collect shoppers do so because they want the item fast. They simply don’t want to wait for a package delivery. Millennial and Generation Z shoppers come to mind, in this respect. Ordering an item with in-store pickup means the customer can secure the item, and have it ready for their pickup – preferably within a few hours, while they run errands.

Despite the desire for speed among shoppers, 23.1% of retailers offering pickup services, included a delay of 2+ days for the pickup. In rural locations, it is understandable that an item shipped into a remote store location may take some time to deliver. However, several retailers had terms and conditions stating that an in-store pickup item may have a delay of up to 3-7 days. This level is simply ludicrous. A customer could easily place an online delivery order, that should arrive within 2-3 days (4 days at worst). In this case, why would they bother with an in-store pickup, if the delivery right to their door or postal outlet is faster?

Australian Retail Market

Overall, the Australian retail market is still in the early phases of its omni-channel capabilities. As customer speed expectations grow, and as more retailers realize the sales enhancing opportunities in omni-channel services, this level will grow rapidly. At the moment, with only 25.5% of Australian retailers deploying click and collect services, there is considerable opportunity to jump ahead of the competition. In doing so, seek out a robust order management solution, that makes the omni-channel journey easier.

Author:

Charles Dimov - Director Marketing OrderDynamicsCharles Dimov is Director of Marketing at OrderDynamics. Charles has 21+ years experience in Marketing, Sales and Management across various IT and Technology businesses. Previous roles include Chief of Staff, Director Product Marketing, and Director Sales. Charles has held roles in brand name firms like IBM, Ericsson, HP, ADP, and OrderDynamics.

 

 

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