Over half of Australian retailers believe AI is a top priority for their business in the next 12 months, with 68% already experimenting with AI in some capacity, new research from Shopify has revealed.
Black Friday-Cyber Monday saw 52 million global shoppers spend $7.5 billion dollars with brands powered by Shopify last year. Ahead of this year’s event, Shopify surveyed 2,000 consumers and 350 businesses across Australia to learn what will motivate consumers and drive business performance over the upcoming holiday shopping period.
The study, conducted by Sapio Research, found that 74% of Australian retailers are planning a big BFCM in 2023, anticipating a rise in consumer spending as shoppers seek to take advantage of deals and discounts for their holiday shopping. And with businesses earning 25% of their annual sales, on average, during the holiday season, retailers are turning to technology to help them optimise business performance during this period, with 72% of retailers investing in some form of technology to drive sales.
Attracting new customers and retaining customers ranked equal first (39%) among Australian retailers as the top benefit of adopting new technology in their business, followed closely by improving operational efficiencies (37%). Close to one-third (33%) of businesses think technology will help businesses most with smart decision making, tying with the US as the largest proportion of businesses per country that believe this. And when it comes to implementing AI specifically, 42% of Australian retailers said they are using AI to improve customer engagement and build brand loyalty, while 37% cited that AI helps them improve personalised and targeted marketing.
“Our research found that the consumers that plan to spend the most during this sales period are more likely to regularly make use of technology as part of their shopping journey. And with two-thirds of consumers planning to take advantage of BFCM in 2023, there is a huge opportunity for local retailers to meet consumer demand and capture wallet-share with technology-driven experiences,” said Shaun Broughton, APAC Managing Director at Shopify.
These insights align with the attitudes of Australian customers, with the study finding close to 1 in 4 of consumers are more likely to buy from brands with technology-enabled shopping experiences (24%) and almost a quarter (24%) expect brands to embed technology into the shopping experience. 23% are more likely to spend money with brands that offer tech-enabled shopping experiences.
“We don’t go on sale very often and our goal for our BFCM sale is to provide the best experience for our community and inspire them to be 1% better every day,” said Jason Daniel, CEO of LSKD. “At LSKD, we’re trialling cutting-edge technologies, including VR/AR and virtual assistants, to understand the value they can provide our community. Additionally, we’re venturing into AI-powered productivity tools to further empower our internal teams, always with an eye towards strengthening our authentic relationship with each customer.”
Key findings from Shopify’s latest research also reveal:
The holiday sales season continues to be a priority for Australian retailers
- Roughly the same number of Australian businesses are planning to participate in BFCM this year (37% for Black Friday, 24% for Cyber Monday) compared to last year (33% for Black Friday, 24% for Cyber Monday). While the number of businesses planning to participate in festive sales has remained the same, peaking during Christmas with 46% of retailers planning to release promotions, January sales figures have dropped slightly with only 25% of retailers planning to take part in the sales event, down from 29% in 2022.
- A majority of businesses (19%) are planning to start promotions for BFCM on Black Friday, or after. It’s worth noting however that the people who plan to spend the most at BFCM are three times more likely to start shopping early than people who plan to spend less. These shoppers are making deliberate purchases, beginning their shopping research two to three weeks in advance.
Businesses are investing in technology to attract and retain customers
- While technology adoption has grown among retailers, Australian businesses still lag behind their global counterparts in this area. Compared to Canada, France, Germany, the UK and the US, Australia has the highest proportion of retailers that haven’t and do not plan to invest in AI (36%), in-store automation (39%), marketing and sales automation (27%), QR codes and digital display screens (28%), smart check-outs (38%) and augmented reality (44%).
- That said, Shopify’s research shows that those that do embrace technology are likely to appeal to higher spenders — consumers who plan to spend over $850 this BFCM are over twice as likely than the average BFCM shopper to use virtual reality or augmented reality while shopping (146% increase), and significantly more likely to use virtual assistants (158% increase) and chatbots (123% increase).
- The top ways businesses are investing in technology for BFCM include:
- Investing more in their social media presence (36%)
- Planning email campaigns and online advertising to target prospective customers (33%)
- AI to support better customer experience and customer service, such as offering live chat to answer questions (31%)
- Optimising the back-end of our online store, but investing in infrastructure so that we can process and deliver a higher volume of orders in a shorter period of time (31%)
- Making it easier to add deals or discount vouchers to products (29%)
When it comes to marketing, Australian businesses are doing things differently
- 87% of businesses in Australia say their owned content marketing is increasingly crucial to helping them stand out from the crowd, while 89% say that owning the direct relationship with consumers has never been more important. Given three quarters (77%) of AU retailers agree that, while digital advertising costs are increasing, return on investment isn’t, now is the time to think differently.
- Businesses believe social, interactive shopping will play an even more pivotal role this year – and in the decade to come. 79% of businesses said selling via social media had the same level or more importance than a year ago.
- Almost a third (30%) of businesses think that social media platforms will provide the highest volume of sales for them by the end of the decade, second only to their owned direct to consumer channels, e.g. online store (31%).