Omni Channel report from Telstra on status in Australia

1. How you can join
the Omnichannel
Shopper in
transforming
Australian retail
1

2. Executive summary 4
Bricks v. bytes: the changing face of retail 5
Shopping Without Boundaries: the Omnichannel Shopper’s world 6
Case Study: John Lewis – an early Omnichannel adopter profits 8
Telstra’s research: Omnichannels in Australia 10
How new technologies are changing the way in which Australians shop 11
What the research shows: Internet usage and shopping patterns 12
Social Media and the new shopping experience – what it means for retailers 25
Segmenting your customers in an Omnichannel marketplace – Deloitte’s View 27
Vital Omnichannel lessons for Australian retailers 28
Case Study: Coca-Cola Amatil goes Omnichannel in Australia (sidebar) 30
Conclusion 32
ABOUT THE AUTHORS 34
2 3

3. EXECUTIVE Bricks v. bytes:
SUMMARY the changing face
of retail
With the ongoing evolution of technologies such as For many years, Australian retailers saw the
the Internet, Wi-Fi and Smartphones, retailers today decision to trade online as an alternative to
are faced with a plethora of choices for engaging trading in a physical store.
with customers, and thus driving sales.
Traditionally, retailers have segmented the This whitepaper also explores how Preference for online or physical channels Retailers judged their decision to trade Overseas, traditional retailers embraced
market into those who shop online and those technology continues to drive the evolution varies by product category but overall the online in the same way they assessed the online trading much more readily. In the
who shop in a physical store. Increasingly, of retail, the many possibilities now research shows that consumers are looking viability of adding an extra site to their UK, where online now represents 12% of
however, the boundaries are blurring and a available to Australian retailers, and critical for a blended online/offline experience when bricks and mortar network. If online could retail sales1, traditional bricks and mortar
new consumer paradigm is fast emerging: considerations for those who wish to build they shop. The things they like about bricks not stand-alone and make a profit, it was operators dominate the list of top online
the Omnichannel Shopper. an Omnichannel retail experience for their and mortar stores are sensory (touch, feel, dropped like any other loss making venture. retailers. High street chains like Tesco, Next,
customers. service) whereas they value the anywhere, Thus, a number of high profile Australian Debenhams, John Lewis, Currys, Topshop
Equally comfortable to research and shop anytime convenience of shopping online. retailers entered the online world then and B+Q all feature in the top 202 and there
on the Internet or in a store, depending on Our findings show that the Omnichannel
Combining the two delivers the best of both exited again when they didn’t see profitable are six bricks and mortar chains in the top
circumstances, the Omnichannel Shopper customer does indeed exist in Australia. They
worlds. results. 10. In the USA, traditional bricks and mortar
has much to offer Australian retailers, are as well, if not better, equipped than their
retailers also dominate the list of top online
including a rich source of data on consumer overseas peers to search and shop in an Other Australian retailers resisted trading
retailers. Internet Retailers 2012 Top 500 list
behaviour and buying patterns, and scope to Omnichannel world and they are shopping online altogether. They feared that trading
of online retailers in the USA has Staples,
target shoppers more precisely with offers the Omnichannel way already. In some online would cannabilise their existing
Apple, Wal-Mart, Office Depot, Sears and
relating to their individual preferences. product categories more than 80% of online bricks and mortar businesses. For these
CDW in the top 10.
buyers also shop for the same goods they retailers, trading online would be like
A lot has been said about the Omnichannel buy online in bricks and mortar stores. opening a store next door to one that had
shopper in Australia over the last 12
already been fitted out and a lease signed.
months but most of it is based on overseas
They felt that the customer would choose
experience and research. To discover how
one outlet or the other, but that there would
best Australian retailers can both reach and
not be enough extra business to justify the
harness the power of this new consumer,
additional investment.
Telstra commissioned a unique research
study to identify the prevalence of the
Omnichannel customer in the Australian
marketplace, their drivers and behaviours.
Contrasted here against case studies from
domestic and international experience, the
results make for fascinating reading.
1 Centre for Retail Research 2011 Study
2 IMRG Experian Hitwise Hot Shops Feb 2012
4 5

4. Shopping Without Boundaries:
the Omnichannel Shopper’s
world
The success of traditional retailers online has given
birth to the idea of the Omnichannel shopper, a new
concept in retail that has critical implications for
distribution channel design.
In traditional distribution channel design, The Omnichannel hypothesis is that
a market is segmented into groups of traditional channel design is not effective
customers that are maximally similar by for retailers. The customer who’s browsing
group and maximally different between the online channel for clothes is the same
groups. Channels of distribution are then customer who visits the store looking for
designed to suit the needs of these groups of clothes. The customer who’s looking online
customers. For example, your bank probably for a holiday is the same customer who visits
has separate channels for large corporate, a store to buy a holiday. Online and physical
small business and consumer customers. stores are not separate channels in the
Likewise, at Telstra, we operate Enterprise traditional sense because the one person
and Government, Business and Consumer may use both channels. In fact, online and
channels. Underlying this model is the belief physical more rightly should be considered
that each customer buys only from one an Omnichannel.
channel, and thus that the profitability of
each channel should be judged separately.
When a business is designed this way,
management spends a lot of time on their
channel P&Ls, wondering whether one
channel is cannabilising another.
6 7

5. CASE STUDY: John Lewis
an early Omnichannel adopter profits
John Lewis entered the online retail market in 2001.
Like many other bricks and mortar retailers 2. Click and connect The results have been impressive:
of the time, they did so through the
Introduced in 2008, “Click and Collect” • Online sales have increased as a
acquisition of an established online only
gave customers the ability to order online proportion of total sales every year since
operator. (In John Lewis’ case, the online
and pick up their purchase in a store of the launch of the online site. Online sales
operator was the UK arm of “Buy.com.”)
their choice. Or they could order in a store now represent 22% of total sales at John
Rather than run the online operation as a
and have the goods delivered home. This Lewis3.
separate entity, John Lewis soon recognised
strategy delivered a tangible benefit to the • Overall, John Lewis sales have continued
the value of integrating the online
Omnichannel shopper. For the first time, to increase on a like-for-like basis over the
experience with the in-store experience. To
the shopper could combine the benefits last 10 years4.
achieve this, John Lewis implemented three
of a physical distribution channel with the
key strategies: • John Lewis customers are Omnichannel
convenience of an online channel. To the
customer, online and in-store became part shoppers. According to the IDC Retail
1. Collaborate, don’t compete of the same shopping experience. They Insights Report “
John Lewis: The Path to
ceased to be separate channels. Omnichannel”, published in May 20125:
The first strategy aimed to ensure that
the online operation did not cannibalise −− 27% of John Lewis customers research
the bricks and mortar stores, and involved what they want in store and then
3. Online, while in store purchase it online
rewarding physical stores for online
John Lewis’ third key strategy was to bring
sales that were made in their trade area. −− Over 60% of customers research online
online in to the physical in-store shopping
Store employees (partners) were given an before going to the store
experience. Terminals were installed in
incentive to encourage shoppers to use the −− More than 20% of John Lewis
John Lewis stores so that partners could
John Lewis online site, and because staff customers buy online and collect
assist shoppers with online purchases
were rewarded for the desired behaviour, in store
in what was known as the PACT (Partner
there was a very real reason for them to
Assisted Customer Transaction) program. −− 40% use their phones to interact with
collaborate and not compete.
In addition shoppers in John Lewis stores the brand when in a store.
were encouraged through signage and • The Omnichannel shopper is John Lewis’s
later through QR code links to go online most valuable customer. On average, the
for information on extra product ranges, Omnichannel customer spends 3.5 times
stock availability, finance terms and other more than the customer who shops in
information that might assist them in their store or online exclusively. Quite simply,
shopping mission. access to an Omnichannel shopping
experience encourages more spending.
3 John Lewis Annual Report 2012
4 John Lewis Annual Reports, 2002-2012
5 IDC Retail Insights, John Lewis: “The Path to Omnichannel” Doc #GRRS03U, May 2012
8 9

6. Telstra’s research: How new technologies
Omnichannels are changing the way in
in Australia which Australians shop
A number of dedicated research studies into the Before looking at the results of our research, it’s
Omnichannel customer have been conducted overseas, worth considering the technological environment that
although none – until now – in Australia. exists in Australia to support the Omnichannel shopper.
Given the relative immaturity of online respondents across Australia. Quotas In particular, what technologies are • Consumers are increasingly using their
among traditional retailers in Australia, were applied to provide for adequate Australian shoppers equipped with? And mobile devices to access the Internet
Telstra was interested to find out if the representations in each age group and how does the Australian technological while commuting or travelling. According
Omnichannel customer exists in the both genders. Quotas were also applied environment compare with that available to to Nielsen, the proportion increased from
Australian market. And, if so, we wanted to on location to ensure coverage across shoppers in Europe and North America? 42% in 2010 to 55% in 2011. Of these,
find out who they are and what merchandise metropolitan and regional areas in each 31% report using their mobile devices to
• The Australian consumer is
categories they favoured. We also wanted State and Territory. The interview fieldwork research products.
overwhelmingly an online consumer.
to discover the critical considerations for was conducted in March/early April
Ranked by Internet users as a percentage • Consumers are growing accustomed to
Australian retailers wishing to build an 2012. The data was weighted by age and
of total population, Australia has the 5th a multiple screen life. Six in 10 online
Omnichannel retail experience for their gender within location so that the results
highest level of Internet penetration in the Australians have used the Internet while
customers. are reflective of the actual Australian
world. Total penetration in Australia, as at watching TV while more than one third
population. Sample sizes by age and gender
The research consisted of a telephone December 2011, lies at 90% – just ahead do it on a daily basis. Of these, two thirds
are shown below.
survey of 813 randomly selected of Netherlands and Denmark. Australia is have used the Internet to shop while
the only non-European nation amongst simultaneously watching TV.
the top five countries ranked by Internet
total male female • According to Nielsen’s Social Media
penetration6.
Report: Q3 2011 Australians use social
14 to 19 years of age 95 44 51 • According to the Nielsen 2012 Australian media more than any other developed
20 to 29 years of age 97 47 50 Online Consumer Report, Australians country. What’s interesting for retailers
now spend an average of almost 22 is that social media is increasingly being
30 to 39 years of age 126 55 71 hours per week online. In terms of media used to interact with brands. One of
consumption, this is 40% more time than the key areas of growth in Australians’
40 to 49 years of age 141 70 71
they spend in front of a TV. participation with social media in 2011
50 to 64 years of age 196 96 100 was in ‘Liking’ brands (now 57%, up from
• Time spent online is increasingly 46% in 2010) and interacting with brands
65+ years of age 158 79 79 facilitated by a proliferation of mobile on social media platforms (now 47%,
devices. Nielsen say that 51% of all up from 41% in 2010). 71% read other
Total 813 391 422 online Australians aged 16+ owned a consumers’ opinions and discussions
Smartphone in 2011, up from 36% in about brands online. Cisco’s IBSG group
2010 (and they forecast Smartphone in the U.S. found that online reviews are
penetration to be at 64% by 2013). This now five times more influential than in-
compares to penetration rates of 45% in store assistants in influencing shopper
the UK and 38% in the USA7. Time spent choice8.
accessing the Internet from Smartphones
increased by 20% in 2011 to an average
of 4.2 hours per week, in addition 18%
of Australian households now own a
tablet computer, up from 8% in 2010 and
forecast to be 39% by 2013.
6 Internet World Stats: www.internetworldstats.com
7 Google Mobile Internet and Smartphone Adoption Report January 2012
8 Cisco ISBG “Catch ‘em and keep ‘em 2011”
10 11

7. What the research shows:
Internet usage and
shopping patterns
Internet usage is now almost ubiquitous in Proportion who access the internet Australians are very frequent users of the Frequency of accessing the internet
Australia across all demographic groups Internet. Over 50% of consumers access
and is still increasing. the Internet every day and almost a third
access the Internet more than five times
TOTAL 98% MORE THAN FIVE TIMES A DAY 32%
per day.
MALE 99% EVERYDAY 52%
FEMALE 97% MOST DAYS 6%
14-19 100% A FEW TIMES A WEEK 5%
20-29 100% ABOUT ONCE A WEEK 2%
30-39 100% 1%
LESS OFTEN THAN WEEKLY
40-49 99%
NEVER 2%
50-64 99%
65+ 93%
Proportion who access the internet – trends The Internet is being used for shopping Proportion who purchased online in the past 12 months
by two thirds of consumers. Men are
somewhat more likely to shop on the
98% Internet than women, while Internet
TOTAL 66%
shopping is most popular among 30-39
year olds. Almost four in five consumers
92% have shopped on the Internet in the last MALE 71%
91%
90% 12 months in this age group.
89% 61%
FEMALE
86% 86%
14-19 50%
83%
20-29 69%
2005 2006 2007 2008 2009 2010 2011 2012 30-39 78%
Source: Sensis® e-Business Report, Sweeney Research
40-49 70%
50-64 68%
65+ 55%
12 13

8. What the research shows:
Internet usage and
shopping patterns (cont.)
Online shoppers each spent an average of Amount spent online in the past year More than two thirds of online shopping Proportion of online purchases from overseas
$2,218 last year. On average, men spent takes place in Australia – i.e. goods are
more than double online than women. bought from Australian-based retailers.
This is likely to be due to men having This finding is consistent with the
UP TO $200 22% NONE 21%
a higher average income. The spend Australian Government’s Productivity
amount increased dramatically for those Commission Report, “Economic Structure
on higher incomes, rising from $1,159 $201-$1000 37% and Performance of the Australian Retail UP TO 20% 34%
per online shopper with an income up Industry,” published in November 2011.
to $55k per annum, to $1,171 per online $1001-$5000 27% 21%-50% 21%
shopper with an income between $56k
and $85k per annum and $3,820 per OVER $5000 9% OVER 50% 22%
online shopper with an income above
$85k. Only 28% of females had incomes AVERAGE = 31%
DON’T KNOW 5% DON’T KNOW 4% AVERAGE = 31%
over $85k per annum, compared with
38% of males.
Regional shoppers spend more online Base – purchased online Base – purchased online
than metropolitan shoppers, but the
difference is relatively small (around 7%).
Average spend online in the past year
TOTAL $2,218
MALE $2,959
FEMALE $1,388
14-19 $475
20-29 $2,449
30-39 $3,330
40-49 $3,073
50-64 $1,396
65+ $1,633
14 15

9. What the research shows:
Internet usage and
shopping patterns (cont.)
The most popular categories for online Types of products/services purchased online The online shopper is overwhelmingly an Online purchasers who had also purchased the same
purchasing are clothing/accessories and Omnichannel shopper. The most popular product offline in the past 12 months
books while the least popular are cosmetics Omnichannel category is clothing/
and sporting goods. accessories, with 89% of online buyers
CLOTHING/ACCESSORIES/SHOES 39%
also shopping in-store. The least popular 89%
CLOTHING/ACCESSORIES/SHOES
Omnichannel category is airline tickets, but
BOOKS 35%
even here 31% of online buyers also buy in BOOKS 82%
APPLIANCES AND ELECTRONIC 26% bricks and mortar stores.
EQUIPMENT (OTHER THAN COMPUTERS) APPLIANCES AND ELECTRONIC 69%
EQUIPMENT (OTHER THAN COMPUTERS)
VIDEOS/DVDS/GAMES 18%
VIDEOS/DVDS/GAMES 75%
AIRLINE TICKETS 18%
AIRLINE TICKETS 31%
HOTEL RESERVATIONS 17%
HOTEL RESERVATIONS 33%
MUSIC 16%
MUSIC 48%
COMPUTER HARDWARE 14%
COMPUTER HARDWARE 66%
GROCERIES & ALCOHOL 13%
GROCERIES & ALCOHOL 83%
COMPUTER SOFTWARE 12%
COMPUTER SOFTWARE 55%
COSMETICS 9% ALL OTHER RESPONSES
LESS THAN 5% 72%
COSMETICS
SPORTING GOODS/FITNESS 6%
EQUIPMENT/FISHING GEAR SPORTING GOODS/FITNESS 61%
EQUIPMENT/FISHING GEAR
Base – purchases online (66%)
Base – had purchased product online in past 12 months
16 17

10. What the research shows:
Internet usage and
shopping patterns (cont.)
Consumers vary in their preference for Preferred shopping method Consumers gave their top reasons for Benefits of shopping online
online or in store shopping by category. preferring to shop online as being price
Overall, they’re fairly evenly divided between and the convenience of being able to shop
those who prefer shopping online, those who from anywhere. The top reasons given
prefer shopping in store and those who have HOTEL RESERVATIONS 84% 14% 2% for preferring to shop in a physical store CHEAPER PRICES 41%
no preference. A full analysis of individual were sensory (feel, touch, the ability to try
COMPUTER SOFTWARE 61% 23% 15% CAN SHOP AT ANY TIME OF DAY/AT HOME 32%
consumers (where each consumer was on clothes, etc.) as well as face-to-face
assigned a preference, depending on their customer service. IT IS EASY/CONVENIENT 23%
MUSIC 59% 16% 25%
overall preferences across the full range of
goods, and with each preference assigned a CAN RESEARCH MANY PRODUCTS AT 17%
AIRLINE TICKETS 54% 25% 21% THE SAME TIME/COMPARE PRICES
value of “1”) showed that 42% of consumers
CAN FIND PRODUCTS NOT
favour bricks and mortar, compared with BOOKS 37% 28% 35% AVAILABLE IN STORES 17%
29% preferring online and 29% having
BETTER RANGE/VARIETY OF PRODUCTS 7%
balanced preferences across the different VIDEOS/DVDS/GAMES 36% 28% 36% /FROM OVERSEAS
channels.
GROCERIES & ALCOHOL 35% 6% 59% IT IS FAST/QUICK/TIME SAVING 6%
CONVENIENT DELIVERY/POSTAGE 6%
COMPUTER HARDWARE 33% 40% 27% & HANDLING/FREE POSTAGE
APPLIANCES AND ELECTRONIC DO NOT NEED TO DEAL WITH SALES PEOPLE 4%
EQUIPMENT (OTHER THAN COMPUTERS) 29% 32% 38%
CAN GET BETTER PRODUCT 4%
COSMETICS 25% 22% 53% INFORMATION ONLINE
CLOTHING/ACCESSORIES/SHOES 19% 21% 61%
Base – purchased online (66%)
Prefer online No preference Prefer physical store
Base – had purchased products both online and in a physical store in Benefits of shopping in a physical store
past 12 months
PREFER TO PHYSICALLY SEE/TRY THE PRODUCT 80%
BEFORE I BUY/BE ABLE TO TOUCH IT/TRY IT ON
PREFER A FACE-TO-FACE SALES 20%
PERSON/PERSONAL SERVICE
DON’T HAVE TO WAIT FOR DELIVERY 9%
MORE CONVENIENT 4%
ENJOY THE EXPERIENCE/RETAIL EXPERIENCE 2%
LIKE THE SOCIAL ASPECT OF 2%
SHOPPING/A GOOD DAY OUT
Base – purchased online (66%)
18 19

11. What the research shows:
Internet usage and
shopping patterns (cont.)
The online world has given birth to Have you researched goods in a physical store then bought them online? Consumers value Omnichannel shopping How consumers rate different Omnichannel benefits
“showrooming.” Showrooming occurs when for the way it combines the strength of
a consumer uses a bricks and mortar store in-store and online to create an anytime,
to touch, feel and try a product but then anywhere shopping experience. For ABILITY TO RETURN PRODUCTS THROUGH A PHYSICAL 71%
buys online. Our research shows that the example, they see benefit in being able STORE EVEN IF PURCHASED ONLINE 23% 3% 2%
showrooming phenomenon is real. Half of to order in-store or online and then take
ABILITY TO TRACK ORDER STATUS 50% 35% 8% 6%
the population has researched a product in delivery somewhere else, to check stock EITHER AT A STORE OR ONLINE
a physical store then bought it online, but availability across various locations, or to
of these about a quarter made the online check out extended ranges online while NOTIFICATION OF DELAYS IN DELIVERY 46% 38% 11% 6%
purchase from the same retailer with visiting a store. NOTIFICATION WHEN FAVOURITE PRODUCTS ARE ON SALE 43%
whom they did the research. In other words, NO YES 36% 10% 11%
51% 49% REGARDLESS OF WHETHER AT A STORE OR ONLINE
showrooming results in an online sale for
ABILITY TO CHECK STOCK LEVELS AT 42% 36% 14% 7%
the physical retailer in about 25% of cases. VARIOUS STORES ONLINE
ABILITY TO MODIFY AN ORDER MADE ONLINE 38% 36% 17% 8%
THROUGH A PHYSICAL STORE
ABILITY TO SEARCH FOR EXTENDED 30% 39% 15% 13%
RANGES ONLINE WHILE IN-STORE
PROVISION OF WIFI HOTSPOT TO ALLOW 22% 24% 22% 29%
FREE ONLINE BROWSING IN-STORE
Base – purchases online
PROVISION OF EXTRA PRODUCT INFORMATION ONLINE 12% 39% 21% 28%
THROUGH LINKS PROVIDED ON DISPLAYS IN-STORE
Was the online purchase made from the same retailer? PERSONALISED OFFERS DELIVERED 8% 14% 26% 49%
TO YOUR MOBILE WHILE IN-STORE
89%
Extremely valuable Somewhat valuable Valuable Not valuable
Base – purchases online
YES
24%
NO
76%
Base – researched in a store then purchased online
20 21

12. What the research shows:
Internet usage and
shopping patterns (cont.)
A large proportion of Multichannel shoppers Proportion who purchased from the same retailer both The Omnichannel shopper values Why purchased at retailer’s physical location
– those who shop both online and in physical in their stores and online in the past year convenience. While the benefits of online
stores – are already Omnichannel shoppers. shopping centre around comparison-
More than a third of the population who shopping, and the benefits of shopping
bought online and in-store in the last in-store centre around the senses, both I HAPPENED TO BE THERE/CHANCE PURCHASE/IMPULSE BUY 35%
TOTAL 36%
12 months did so from the same retailer. online and physical shoppers rate spatial
The Multichannel customer is most convenience as their top reason for CONVENIENCE/EASY/CAN STAY AT HOME 29%
MALE 34%
likely to be Omnichannel in the younger shopping. For retailers, this means the
demographics (14-49) and less likely in the best Omnichannel prospects are those LIKE TO SEE THE ITEM/LIKE TO TRY ITEM ON/ 28%
FEMALE 39% QUALITY OF ITEM
over 65 age group. who live in the trade area of your physical
store location. IMMEDIACY/GET THE PRODUCT STRAIGHT AWAY 21%
14-19 41%
Examining the sales that businesses YOU CAN BROWSE IN-STORE/SEE OTHER ITEMS/ 10%
make online reinforces this. The Sensis® BUY OTHER ITEMS
20-29 37%
e-Business Report is a large scale BETTER DEAL/BETTER VALUE/DIDN’T WANT TO PAY 5%
survey of 1,800 small and medium SHIPPING/POSTAGE/BETTER PRICE/FREE DELIVERY
30-39 42%
businesses that has been tracking the
online behaviour of small and medium
40-49 44% businesses since 1995. Over this time, it Base – purchased at same retailer online and in-store (36%)
has consistently been found that the main
50-64 34% customer base for SMEs that sell online
comes from those who live locally. Indeed,
65+ 19% 60% of SMEs mainly make their sales
locally. Why purchased at retailer’s online site
CONVENIENCE/EASY/CAN STAY AT HOME 29%
IT’S CHEAPER 27%
IT WASN’T AVAILABLE IN-STORE/DIFFICULT TO FIND/ 13%
ONLINE PURCHASE ONLY
BETTER DEAL/BETTER VALUE/DIDN’T WANT TO PAY 9%
SHIPPING/POSTAGE/BETTER PRICE/FREE DELIVERY
CAN SHOP AT ANYTIME THAT SUITS ME 8%
OUTSIDE TRADING HOURS
AVAILABILITY/WIDER RANGE/VARIETY/ 7%
ONLY AVAILABLE ONLINE
COULDN’T GET TO THE STORE/LIVE TOO FAR FROM THE 7%
STORE/STORE ITEM NOT AVAILABLE LOCALLY
IT’S QUICKER 5%
Base – purchased at same retailer online and in store (36%)
22 23

13. What the research shows:
Internet usage and Social Media and the new
shopping patterns (cont.)
shopping experience – what
it means for retailers
In Australia, the consumer social media
market already displays a degree of maturity.
Types of customers SME’s sold to: Only 38% of online Australians do not use Products or services researched on social networking sites
social media – a figure that has not changed
in the past year. But those who do use it are
MAINLY TO TOTAL TO TOTAL SELL TO: using it more frequently, with 36% of online
SELL SELL Australians using social media at least CLOTHING/FASHION 53%
SMALL MEDIUM once a day in 2012, up from 30% in 2011.
BUSINESS BUSINESS An enthusiastic 10% of online Australians 32%
MUSIC
Local – same city or town 60% 87% 87% 86% report using social media more than five
times a day. ELECTRICAL GOODS 31%
Elsewhere in state 13% 48% 48% 56%
Social media has been playing a growing COSMETICS/BEAUTY/FRAGRANCE 22%
Interstate 16% 45% 44% 61% influence on consumers’ purchasing
Overseas 3% 27% 27% 35% behaviour in recent years. Social media COMPUTERS/SOFTWARE 20%
users are more likely to report purchasing
online than non-users. While 66% of FURNITURE/THINGS FOR THE HOME 17%
Australians reported having made
purchases online, 71% of social media users VIDEOS 14%
Meet the Omnichannel Shopper reported online purchasing, increasing to
74% of Australians who used social media SOFTWARE 14%
a. The Omnichannel Shopper to feel and touch things I go to a bricks every day.
Jane (not her real name) is in her 50’s and mortar store but if I want something COMPUTER GAMES 10%
On the other hand, while business use of
and lives in Tasmania. She accesses the specific I like the convenience of buying social media has been increasing (27%
Internet more than five times a day but online.” Her favourite bricks and mortar CARS/PARTS 6%
of small businesses have a social media
does not use social media. In the past 12 store is Myer because of its product range. presence in 2012, up from 14% in 2011), BOOKS 5%
months she has bought books, clothing, Her favourite online store it still lags consumer usage. However, by
airline tickets and hotel reservations is Ezibuy. It’s interesting to note that examining the consumer data, it is evident
online but has also bought all of these Ezibuy acquired Myer Direct in 2002. If not ENTERTAINMENT/EVENTS 3%
that the opportunities that social media
categories in a physical store. She uses for this acquisition Jane would have had a provides for businesses are considerable. SPORTS/RECREATION EQUIPMENT 2%
in-store and online for different purposes. classic Omnichannel relationship with the For example, some 16% of social media
“When I need traditional service or need Myer brand. users reported that they used social media OTHER 11%
to research products and services that
they might want to buy. The opportunity for
Omnichannel retail is clear, with the types
of products most suited to the Omnichannel Base – users of social media to research products or services
model also being the types of products that Source: Sensis® e-Business Report, Sweeney Research
consumers are most likely to be researching
on social media.
Of those social media users who researched
products and services, 40% reported that
their last search had resulted in a purchase.
While 72% of those purchases were
conducted online, some 28% resulted in an
“offline” purchase in a physical store.
24 25

14. Social Media and the new shopping
experience – what it means for Segmenting your customers in
retailers (cont.)
an Omnichannel marketplace
–Deloitte’s View
The benefits of the Omnichannel model How social media users rate different Omnichannel benefits The Omnichannel consumer is making faster, more accurate data is at the fingertips of retailers today; making good use of
resonated strongly with regular social media and more sophisticated purchasing decisions than ever before. it – irrespective of where it sits in the organisation – is achievable
users, who rated them equal or higher than Traditional consumer behaviours are being replaced by Omnichannel within a short timeframe.
online shoppers in general. In particular, consumer behaviours.
ABILITY TO RETURN PRODUCTS THROUGH A 96% 2. Advanced analytics tell the story
social media users rated access to Wi-Fi
PHYSICAL STORE EVEN IF PURCHASED ONLINE 96% Through their actions and transactions, Omnichannel consumers
hotspots and links to additional product Traditional consumer Omnichannel consumer offer up data that provides a behavioural and then granular
information in-store more highly than 90% behavioUr behavioUr
ABILITY TO TRACK ORDER STATUS view of what they are doing. Much like the innovations in
regular online shoppers. EITHER AT A STORE OR ONLINE 85% Research by reading printed Scan the Internet to “comparison technology available to consumers in an Omnichannel world,
Social media users were slightly more media or watching a TV advert, shop” based on the value of one so too retailers today can avail themselves of many advanced
86%
likely to report researching online and then NOTIFICATION OF DELAYS IN DELIVERY often with a local focus offer against another offer. analytic tools. These tools are not cost prohibitive, and search the
purchasing in a physical store than the 83% Refer to peer opinions via their traces of data a consumer leaves with retailers to unveil stories
general population (75% compared with social media networks – even of behaviour. Similar to a social networking environment, the
NOTIFICATION WHEN FAVOURITE PRODUCTS ARE ON SALE 85% while in a physical store
73%). They were also significantly more resulting behavioural segments act like communities of likeness
REGARDLESS OF WHETHER AT A STORE OR ONLINE 78%
likely to report researching in a physical Make an early decision on where Keep purchase options open right – consumers effectively self-select where they best reside within
store and then purchasing online (59% 82% to purchase up to the point of sale the segmentation model based on how similar their shopping
ABILITY TO CHECK STOCK LEVELS
compared to 49%). AT VARIOUS STORES ONLINE behaviours and preferences are to a particular community.
78% Shop based on the opening hours Browse and purchase when They are not assigned into a group because they fit a pre-
of a physical store convenient configured persona.
ABILITY TO MODIFY AN ORDER MADE 80%
ONLINE THROUGH A PHYSICAL STORE 74% Constrain themselves to what is Find the product that is best 3. Constant evolution, to reflect a constantly changing market
available in the physical store suited to their needs – globally The segmentation model becomes a living breathing asset that
ABILITY TO SEARCH FOR EXTENDED 74% or locally. Geography is often
can be refreshed to monitor changes in behaviour, evolves over
RANGES ONLINE WHILE IN-STORE 70% irrelevant
time, and allows the retailer to respond with agility to meet
customers where they are now in their own shopping experience.
PROVISION OF WIFI HOTSPOT TO ALLOW 59% So how can retailers build in the agility to recognise this change in
FREE ONLINE BROWSING IN-STORE 46% the market, respond to or even pre-empt further changes? How can Imagine the ability to identify those customers who are similar
you make the right offer, at the right time, through the right channel – firstly, because they buy running gear; secondly, because they
PROVISION OF EXTRA PRODUCT INFORMATION ONLINE 61% to win the customer’s attention – in a way that entices them with a like the same brand; and thirdly, because they’re prepared to pay
THROUGH LINKS PROVIDED ON DISPLAYS IN-STORE 50% value proposition that speaks directly to their desires and needs? a slightly higher price to get the latest product – especially after
payday. Then imagine that they are also similar because they prefer
PERSONALISED OFFERS DELIVERED 28% More than ever, segmentation is the key to answering these
to make their first purchase in-store, but will then repeat purchase
TO YOUR MOBILE WHILE IN-STORE 22% questions. Traditional segmentation approaches are not designed
online – except for weekends, when again they will revert to browsing
for the Omnichannel consumer – they are often too high level, based
and buying in-store. What does this tell us about how, where and
on attributes like demographic, life-stage and socioeconomic status,
Daily social media users Online shoppers when we can influence these customers?
and undertaken as a point-in-time, survey-based, research exercise.
Proportion that rated feature as very or quite valuable The result is a simplified matrix that assumes a customer resides On a given day, imagine having the opportunity to recognise these
Base – purchases online only in one segment and can only be managed as a single persona. shoppers are online, call up prior purchases and present them
with the products that are most appealing to them. You can entice
So what does segmentation look like in an Omnichannel world?
them, not by offering price discounts, but instead by giving them
1. Amazingly granular data, used smartly an incentive to bundle, cross-selling to them, based on the choices
Omnichannel segmentation makes smart use of the amazing they’ve made in the past. What’s more, you’re not just campaigning
data that the Omnichannel consumer is providing retailers at to them, but also to all those within their community of likeness,
every touch-point, across each channel, with every decision and reaching out to them through their most prevalent channel of
transaction they make. In this new world, a distinction must be interaction at the most relevant time of day. This is the power that
drawn between aggregate customer data that gives no insight in segmentation in an Omnichannel world can provide.
how an individual’s behaviour changes over time, and rich granular
data that provides insight into every customer interaction. Having
a strategy that recognises how this data is going to be gathered
and sourced across these touch-points is the first step in re-
thinking the role of segmentation. Surprisingly, most of this
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