Australia is both incubator and test market for captivating new payments experiences, namely in the buy now, pay later (BNPL) space. The country also provides a fascinating study into the attitudes and behaviors of digital-first consumers. This is true even though throughout the pandemic, Australians stood with physical retail more than almost any shoppers worldwide.
This has much to do with the payments innovation sweeping Australia in recent years, and the promising rise of an entire nation becoming enamored with digital-first solutions.
“A successful innovation strategy starts with knowing what customers want, and because a growing share of Australians are taking a digital-first approach to payments through contactless and mobile wallet technologies merchants may have a leg up in getting to know their customers better,” according to the PYMNTS December Global Digital Shopping Index Australia Edition, a Cybersource collaboration. “Merchants must know how to leverage this data, however, and they need payment partners that can help show them the way in an increasingly dynamic and technology-driven retail landscape.”
Significant patterns are being studied here for the benefit of other regions less far along in their own digitization journeys, making the Global Digital Shopping Index Australia Edition a valuable read and resource for merchants and tech partners in search of reliable roadmaps.
Online-Native Journeys Most Fulfilling For Australians
As part of a major study of four key markets around the globe — the U.S., Australia, the U.K. and Brazil — PYMNTS surveyed nearly 1,900 Australian consumers and close to 600 merchants in August and September 2020. What leaps out is how happy Australians are with their choices.
“Online-native shopping journeys are the most satisfying for Australian consumers: They score 123.1 on a scale with a median of 100 while brick-and-mortar journeys are the least satisfying, scoring just 52.2” per the Global Digital Shopping Index Australia Edition. “Satisfaction is driven to a significant extent by the digital features that consumers can access, but two main considerations appear paramount for Australians: value and convenience, or ‘value me’ and ‘make it easy for me features.” Features Australians use frequently include rewards (44.4 percent), product recommendations (35.6 percent) and product details (38.3 percent).
Per the new Index, in Australia, “Digital-native shopping journeys, which see consumers shopping via computers or mobile devices and having their purchases delivered to their homes, increased by 25 percent since the pandemic. Online cross-channel journeys — when consumers purchase products online and retrieve them in or outside stores — increased by more than 18 percent. In-store shopping fell by 6 percent.”
Taken together, it’s a portrait of physical retail and digital payments hybridization.
“Australians tend to have a greater affinity for in-store shopping than U.S. consumers. This does not mean that they are averse to digital innovation … such as contactless payment technologies. Nearly 47 percent of them use contactless payments via cards or, to a lesser extent, digital wallets. This is nearly three times the share of U.S. consumers. This likely reflects the fact that contactless cards and terminals have made greater inroads in Australia,” according to the Global Digital Shopping Index Australia Edition.
Top Performers Know Their Customer Well
What makes a top-performing digital-first merchant in the land down under? A few things.
For starters, Australians appear to have a greater understanding of and appreciation for the joys of shopping in stores, but only when deftly combined with curated digital experiences.
For example, the new Index states that “Australians consider cross-channel shopping experiences to be close to as satisfying as wholly in-store ones. U.S. consumers, on the other hand, find digital native experiences considerably more satisfying than cross-channel ones.”
PYMNTS researchers found that in Australia, top performing merchants are more likely to be omnichannel. Nearly 40 percent make 50 percent to 75 percent of their sales in store, while among bottom performers over 89 percent make their sales in store. “Digital first ordering and payment capabilities top the agenda in the coming years for high-ranking merchants: 52.2 percent plan to invest in mobile order-ahead, 49.7 percent in in-store pickup and 45.3 percent in curbside or customer service pickup,” per the Global Digital Shopping Index Australia Edition.
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