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Gen X and baby boomer consumers in Australia are crying out for customer service, IBM research has discovered. The Meeting the demands of the smarter consumer study surveyed 2,599 Australian consumers in all states about their shopping behaviours and attitudes.
The survey is conducted globally every year but because Australia is a unique market, IBM wanted to know whether our attitudes more closely resemble consumers in emerging or established markets.
IBM Global Business Services’ Ian Wong (pictured left) said that a demand for good customer service – mainly knowledgeable and helpful staff – is what set Australians apart from other markets. “Nowhere else in the world is customer service so bad,” said Wong. “If retailers do address these issues, 54% of consumers are wiling to spend more if improvements are made. So there’s a big opportunity there.”
Customer service was ranked less important for Generations Y and Z, however. Jill Heleri (pictured left), Global Industry Leader – Retail for IBM Global Business Services (GBS), suggested this is because younger generations are much more used to finding the information they need online. “Peer reviews are more important than customer service. By they time they get into the store, mentally they’ve already made the purchase,” she said.
73% of consumers said they want to use some kind of technology while shopping, and unsurprisingly it was Generations X, Y and Z who had the greatest desire to use technology as part of the shopping process. However only 7% of consumers want to use their mobile phones, compared to 29% for markets like India and China. By and large Australian consumers are using the Internet for comparing prices, Wong said. Recent research has shown that when Australian consumers do shop online, 43% of the spend goes to overseas retailers.
Where retailers could work harder to engage their consumers is in social networking. 76% of consumers surveyed said they wanted to collaborate with retailers. Wong cited the Sportsgirl Super Stylist competition, which allowed Sportsgirl customers to post their own outfits on the brand’s Facebook page. Heleri said that US retailer LL Bean had pioneered the inclusion of customer reviews and ratings in product pages on their site, and listened to customer suggestions on things like new clothing designs. “If people don’t do it they’re missing out on some really cool feedback,” she said.
When it comes to consumer advocacy levels, Australia looks more like growth markets, Wong said. Only 23% percent of consumers were identified by IBM as advocates, compared to 40% in the US (a figure that actually increased during the recession). Wong suggested that this low advocacy could be linked to poor customer service levels. 35% of Australians are shifters, consumers who either abandoned their primary retailer in the last year or migrated some of their purchases to a secondary retailer. Both advocates and shifters place a high value on personalised discounts and knowledgeable staff.
Simon Crisp, sales and solutioning lead for IBM GBS, said that organisations may have mastered transactional databases but now they need to learn how to analyse unstructured data coming from review sites and social networks. “There’s no question the game is changing. At the end of the day, retailers are playing catch-up. The time-frame of how you meet needs has to be very rapid,” he said.
Posted on 25th May 2010