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The Australian Digital Consumer Landscape

While Australia is at the leading edge of digital device adoption, online purchasing lags behind many other nations. Twenty to thirty percent of consumers continue to research online, but purchase offline. BCG research suggests that the drop-off at the purchase stage is due to underinvestment in seamless end-to-end digital offers. While this suggests significant untapped potential for retailers, there are specific instances in digital purchasing journeys when consumers still desire the human touch. Our research also reveals a paradox of trust: consumers increasingly desire offers that cater to their personal needs, but also seek greater control over their personal data.


In BCG’s 2019 Australian Consumer Sentiment Survey, we surveyed over 2,500 Australians about their purchasing habits. We uncovered three key areas of focus for businesses who wish to succeed in the highly digital 2020s:

  1. Work closely with consumers to understand their existing end-to-end journeys, uncover their pain points, and transform the journeys to deliver greater value.
  2. Create blended omnichannel solutions that seamlessly incorporate human touch at opportune moments.
  3. Encourage data sharing to personalize engagements, earning trust through transparent data security and clearly articulated benefits.

Read the 2019 Australian Consumer Sentiment Survey

Methodology

Our Analysis of Australian Consumer Sentiment

Overall, Australia lags the rest of the world in its adoption of online purchasing. In 2019, online retail sales are forecast at 16% of total Australian retail sales, which is well below China (27%) and the United Kingdom (19%), and the gap is predicted to widen. Interestingly, the use of mobile phones to complete an online purchase rose threefold in the years 2016 to 2018, from 8% to 24% of consumers.

The rise in digital device usage across the purchasing journey was reported by all age groups, with the largest rise—a 25 to 35 percentage point increase—among more senior consumers.

Huge shifts in digital device usage since 2016

All age groups experienced large rises in digital device usage for research, and even larger rises in purchasing. The adoption of digital devices by the baby boomer and silver generations to complete an online purchase more than doubled in the years 2016 to 2018, rising to 65% and 58% of consumers, respectively.

Our research shows that consumers desire greater digital options to complete their purchases and we see a consistent drop in digital device usage at the purchase stage—despite much greater use of digital devices across the overall purchasing journey.

Consumers are reaching their purchase decision online, but purchasing offline

Our research shows that consumers desire more digital options to complete their purchases and we see a consistent drop in digital device usage at the purchase stage—despite much greater use of digital devices across the overall purchasing journey. We find that 33% of energy consumers research online but purchase offline (“ROPO”). This is followed by telecommunications and media (24%), and financial services (20%). Our research suggests that this drop off in online at the purchase stage is due to underinvestment in truly customer-centric and frictionless end-to-end digital purchase experiences.

Understanding ROPO consumers—and what leads them to purchase offline—is essential for pure-play online retailers. For omnichannel retailers, a better understanding of ROPO will allow them to optimize the entire purchasing journey to best support consumers when and where they require it.

Customers experience a number of pain points along their purchasing journeys, particularly when it comes to the online environment. The challenges are different across the industries we examined, but range from an inability to see the product beforehand, to be overwhelmed with how much research is required to make a decision.

BCG’s Customer-Centric Transformation Approach

Companies need to work more closely with their customers to fully understand their existing end-to-end journeys and uncover pain points, particularly when customers use multiple channels. By transforming customer journeys, companies can develop seamless end-to-end digital options that alleviate pain points and resolve unmet needs. BCG’s customer-centric approach uses rigorous quantitative analysis to identify customer “demand spaces” that are currently underserved, realigns the customer experience in these spaces through customer journeys, and ensures organization enablers are in place to embed the new experience and customer-centric culture.

Customers experience a number of pain points along their purchasing journeys, particularly when it comes to the online environment. The challenges are different across the industries we examined, but range from an inability to see the product beforehand, to being overwhelmed by how much research is required to make a decision.

In addition, the Australian consumer increasingly craves personalized interactions and offers from retailers, but is also concerned about data privacy and protection. Since personal data is required for effective personalization, businesses must carefully consider how they collect and use data, and how they communicate this to customers.

A Paradox of Trust

According to the 2019 survey, consumers’ desire to receive promotions that meet their individual purchasing needs rose 17 percentage points over 2016. However, data privacy remains one of the most significant concerns for consumers of all ages. Consumers want more control over and protection of their data: they are more likely to manually set their privacy settings on social media in 2018 than in 2016 (up 13 percentage points). Moreover, 86% of respondents believe their personal data should only be used for the purposes stated at the time of collection—a 9 percentage point increase over 2016.

What More Can Be Done?

Specifically, to succeed in the highly digital 2020s, businesses must:

  1. Work more closely with customers to understand their existing end-to-end journeys, uncover their pain points, and transform these journeys to deliver greater value.
  2. Create blended omnichannel solutions that seamlessly incorporate human touch at opportune moments. Adopting BCG’s Customer Influence Pathways methodology will reveal a view of consumer motivations along the customer journey.
  3. Enable personalization strategies by clearly articulating to customers the myriad benefits of data sharing, and earning trust through transparent data security and use policies. To build a successful personalization strategy, we recommend taking an agile development approach. A successful personalization strategy will require investments in people, culture, and skills as well as technology and processes.

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