What Does the Future Hold for Omnichannel in Australia?

Retail customers today are engaging across many platforms and channels, which necessitates a strategy which leverages the absolute best potential from each. Whether your customers are engaging with your brand online through your ecommerce website or social media channels, or walking through the doors of a physical store, they want to be confident they are going to receive a seamless experience throughout.

This is where an omnichannel strategy comes in. With a holistic strategy which maximizes the value from all channels – both digital and physical – the modern retailer can ensure customers are having terrific shopping experiences, wherever in the world they happen to be at the time.

With all that in mind, it seems an opportune moment to pause and assess the current state of omnichannel retail in Australia and take a look forwards and predict what the future holds for the region.

As we walk out of the shadows of COVID-19, is there still a role for ecommerce to play in Australian retail?

One of the biggest questions being bandied around the Australian retail space right now is how the industry will respond to the end of the global COVID-19 crisis. The worst days of the pandemic saw shoppers flock to ecommerce platforms to access essential and luxury products whilst under lockdown restrictions. However, now the worst of the danger has passed, will customers stick with ecommerce or flock back to physical shopping experiences?

According to McKinsey, online shopping is holding stable at roughly 30% above pre-COVID levels, suggesting that most of the people who turned to online shopping during the pandemic have remained engaged with the practice. In fact, further research from the consultancy experts found that, “some 92 percent of consumers who tried online shopping in 2019 became converts, cementing an emergency response into an indispensable habit.”

There is little doubt that omnichannel is rapidly becoming cemented as the go-to business model for retail, however, customer in-store spending continued to recover with 10% year-on-year growth in September 2021 following stable 5-6% growth during the spring and summer.

“Omnichannel shopping is ascendant, with about 60-70% of consumers researching and purchasing both in-store and online across categories,” reports McKinsey. “Not surprisingly, social media influence is heaviest among younger consumers but influences all age groups, most commonly in categories including jewelry, accessories, fitness/sports, and cosmetics.”

The evolution of omnichannel: how to differentiate from your competitors

As younger generation gain steadily more spending power, the key to evolving your omnichannel offering and differentiating will most likely be found in understanding the way these demographics research products and shop, then adapting to best meet those expectations.

Social media will have a strong role to play in this transformation. According to the Inside Retail 2022 Australian Retail Outlook Report, though still very effective, we are seeing a reduction in the power of Facebook and Instagram when it comes to marketing ROI and a rise in the ability of TikTok to drive retail results. This could be evidence of how GenZ are now becoming a dominant force in the retail space with the platforms favored by Millennials, GenX, and Baby Boomers beginning to fade.

“While Facebook, Instagram and LinkedIn continue to be the most effective social media channels for retailers, interestingly, Facebook and Instagram’s popularity decreased by 14.73 per cent and 6.8 per cent respectively compared to last year,” reads the report. “This could perhaps be due to the growth in TikTok (up by 2.54 per cent).”

Brands looking to succeed in omnichannel would do well to reassess their social media channels and see if they can assimilate new platforms into their long-term strategies to ensure they are meeting the maximum number of potential customers where they are. The same report states 24.4% of respondents named omnichannel as an area in which customer expectations will increase over the flowing 12 months.

Interestingly, delivery speed – both online and offline – were named as the top two responses to the same question in the report.

This is perhaps why, in 2020, Amazon announced its intention to open its first robotics fulfilment center in Western Sydney.