Quarter 1, 2018
When it comes to consumer purchasing, the retail store still reigns supreme. However, consumers are increasingly using mobile to shop. Social media influencers are used by consumers to keep up to date with new products however, the use of AI tools such as chatbots and voice assistants is still in its infancy.
of shoppers spent the same or more during Christmas 2017
primarily shopped at physical stores for 2017 Christmas gifts but mobile is on the rise
follow social media influencers to keep up to date with products or find new products
In the last quarter of 2017, when shoppers were asked about their Christmas shopping intentions, we found that 72 per cent of shoppers expected to spend the same or more in the 2017 Christmas period compared to previous years. This expectation was highest among millennial shoppers (18-35 year olds), with 80 per cent anticipating to spend the same or more on their Christmas shopping.
We checked back in with these shoppers and found this expectation largely held true, with 71 per cent of shoppers spending the same or more for the 2017 Christmas period than they did in 2016. 77 per cent spent the same or more in the age bracket 18-24, and 74 per cent spent the same or more in the age bracket 25-34.
EFTPOS continued to be the preferred payment option, with 58 per cent of respondents using EFTPOS ‘always’ or ‘most of the time’, and 51 per cent of consumers reaching for cash ‘always’ or ‘most of the time’. We are seeing online payment systems such as Paypal and Alipay gaining popularity as the market becomes more familiar with these payment platforms however, there is still some way to go before alternative technologies such as mobile payments and cryptocurrencies become a frequently utilised settlement method.
“Both locally and globally debit card transactions are on the rise and ‘Buy Now Pay Later’ options like Afterpay act as a facilitator for debit transactions. Afterpay enables customers to purchase items without needing to extend themselves and spend on credit. Over 85% of Afterpay purchases are made via debit card and this only shows signs of growing. In the future I would anticipate the popularity of Buy Now Pay later services to increase dramatically for online and a switch from the layby percentage to Buy Now Pay Later in-store.”
“Whilst convenience may not be the most notable barrier, any product or service that saves customers time and money will always be a preferred option. Usability is a key differentiator.”
“All social is not created equal, retailers need to select the medium most appropriate for their consumer. For example, Instagram is huge for Fashion - whereas YouTube is providing much greater traction in beauty.”
“The use of social media influencers needs to be part of a broader strategy - they cannot work effectively on their own. Think of them as the top of the funnel for acquisition / awareness.”
These ‘chatbots’ enable retailers to interact with consumers in a more personal, proactive, and streamlined way by understanding natural language entered into messenger and automating initial interactions with consumers to respond in a fast and effective manner. This is particularly key with the introduction of Amazon to the Australian market. These automated interactions can resolve queries or elevate them to human responders, and are a key way that millennials can ‘do their homework’ on a brand, encouraging brand recognition and ultimately leading to sales.
These ‘chatbots’ have the potential to sit at the intersection between more mobile enabled users wanting to research and review products online and the inability of mobile based retailer apps to satisfy consumers requirements. Additionally, they will enable more mobile minded consumers to look through different brands on one common platform.
Facebook Messenger is just one example. Chatbots are increasing their reach into consumers homes and lives through voice assistants on mobile phones and smart speakers offerings from Amazon, Google, and Apple. Widespread adoption of chatbots is still largely in its infancy, with just over 1 in 5 shoppers surveyed currently using chatbots and voice assisted software, predominantly to find information rather than complete a purchase. There remains a huge potential to reach and engage the next powerhouse of the Australian Retail environment, the millennial, connected, consumer.
National Retail & Consumer Leader, PwC Australia
Tel: 613 8603 3136
Retail & Consumer Leader, Financial Advisory, PwC Australia
Tel: +61 3 8603 3886