Key trends impacting retail sector

New research from financial tech platform Adyen illustrates the changing expectations of Australian consumers and key trends impacting the retail sector.

The research found that in face of the rising cost of living, personalisation and loyalty have become increasingly important. In Australia, over two-thirds (62%) of consumers want to see more discounting at retailers they shop with and 43% say they want businesses to remember their preferences and previous shopping experiences so that browsing is more tailored. Retailers are finding it hard to deliver on this, with 44% suggesting it’s now harder to categorise customers.

The study surveyed 36,000 consumers and 12,000 merchants globally, including 1000 Australian adults and 514 Australian businesses, to better understand how inflation is affecting behaviour change among shoppers, and how businesses are adapting to this change.

The tech advantage

Three-fifths (62%) of consumers say that they’d be more loyal to retailers that let them buy online and return in-store, and almost half (40%) suggested they’d have better shopping experiences if a business enables them to shop in-store and finish online or vice versa.

Further, when consumers were asked about how technology makes them feel when shopping in-store, the result is overwhelmingly positive. Nearly half (43%) said they were happier because shopping was quicker, and about a fifth (19%) said they would visit a store more frequently as a result of its technology implementation.

Despite the findings, the business research uncovered just 20% of businesses in Australia have already invested in unified commerce. This compares to 32% beginning to invest and 36% in the consideration phase.

“Customers are running a million miles an hour and our job is to keep up with their expectations. Our payment strategy is all centred around unified commerce and having a single view of payments. Working with clean first-party data informs all of our decision-making for what we're doing. It also helps us understand more about the behaviour of our loyalty members versus non-members,” said Cat Parker, Global Director Commercial at T2 Tea.

“As we integrate all of our payment methods into the same payment platform, we have a single view of all the payment transactions across different channels. Unified commerce enables our consumers to shop how they want and when they want. If we reward our customers with a really great experience, they’ll give us their loyalty and patronage.”

“Retailers will compete more for every dollar in the face of macroeconomic headwinds, but there are still clear opportunities,” said Hayley Fisher, Country Manager Australia and New Zealand at Adyen.

“While consumers in Australia are willing to put in the work to find the best value, they aren’t just motivated by price — they’re looking for convenience, for personalisation, and businesses using this data to provide channel-agnostic, tailored experiences will have a definite edge.”

Navigating shopper fraud

With the ongoing digital transformation of the retail sector, shopping experiences are evolving to become more inventive, varied and refined. However, so too is the incidence of fraud.

During the last year, about two in five retailers (39%) experienced increased payment fraud attempts, which is an increase from 2022 (35%), losing an average of AU$275 each. And over a third (33%) experienced cyberattacks or data leaks.

Despite the increase in fraudulent incidence, Australian shoppers are undertaking various techniques to minimise fraud risk with 40% of consumers checking whether a website is secure before purchasing, and 31% avoiding saving their payment details for security concerns.

“The challenge for every organisation is deciding where to set the threshold between the number of checks and controls to manage your fraud risk, versus the happiness of your customer as they go through a smooth payments journey. We spend a lot of time assessing how strict we want our risk tools to be,” said Aurélie Saada, Director (Global Fraud Risk Lead) at Microsoft.

Socially conscious consumers

There is growing awareness of global issues such as climate change, social inequality, and environmental degradation, which have led many shoppers to re-evaluate their consumption habits and the impact they have on the planet.

More than half (58%) of consumers said that they would spend more to ensure their purchase was carbon neutral, 66% of consumers would spend more with restaurants or grocers that source their products sustainably and 33% of consumers won’t shop with a retailer if they are aware of ethical issues in their supply chain.

“The best businesses are those that not only succeed financially but also those that make a positive impact on the world. By embracing sustainability and social responsibility, retailers can differentiate themselves in a crowded market, build long-lasting relationships with customers, and contribute to a better future for everyone. We’re proud to empower Australian businesses and consumers to use our technology to do good,” Fisher said.

Image credit: iStock.com/Edwin Tan