What Asia can learn from Australia’s digital challenge?

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SAP is the market leader in enterprise application software, helping organizations fight the damaging effects of complexity, generate new opportunities for innovation and growth, and stay ahead of the competition.

In a recent retail study, just two percent of Australian executives said their company delivered a poor digital experience, but none of those surveyed could cite metrics on which they based their view – it was all gut feel.

This lack of empirical evidence is startling when you consider the amount of revenue flowing through digital interactions in Australia’s retail industry: AUD 20 billion in the past year alone, an increase of 20% in the last six months. This rapid growth is driven by some of the world’s most digitally savvy consumers. More than 80 per cent of Australians own a smartphone, while more than half (53%) own a smartphone, tablet and a notebook.

With this level of device penetration, the digital experience is more important than ever, and how a brand digitally interacts with its customers has arguably become the most important component of the overall customer experience.

The reality, though, is that Australian brands aren’t getting digital right, and there’s a lot brands across Asia can learn from this. Together with AMR, SAP recently launched a body of research culminating in our inaugural Australian Digital Experience Report. Instead of asking brand executives about their digital-experience performance, we went right to the source: the customer. What we found is that nearly half (47%) of Australian consumers are unsatisfied with the digital experiences delivered across local B2C brands.

Figure 1: Australia’s digital experience gap (DX score = delighted % – unsatisfied %)

That there’s a gap between what consumers expect and what’s being delivered is important. But more important is the correlation between this gap and business outcomes. For example, among those consumers delighted by their digital experience, 73% said they would remain loyal to the brand, while among those unsatisfied only 17% said they would remain loyal. Similarly, with Net Promoter Score (NPS), those delighted by their digital experience delivered a score of 63 per cent, while those unsatisfied delivered an NPS of -55 percent!

Leapfrogging digital expectations

So what can the rest of the Asia Pacific region learn from Australia’s digital challenge? As discretionary income among Asia’s burgeoning population increases, Asian brands will need to be ready with digital experiences that facilitate discovery, transaction, delivery and support of goods and services.

The Australian Digital Experience report uncovered 13 attributes of the digital experience most important to consumers, ranked in order of preference in Figure 1.

Figure 2: What’s important to Australian consumers

Two categories of attributes stand out: functional and emotional. Indeed, at first look, it would seem that brands should focus only on the attributes of the digital experience that ensure availability and accessibility, such as cohesive, integrated and simple and available anytime on my terms. But as you move down the list, the more emotional attributes appear, such as respectful and dedicated to my needs and fits in with my life and is effortless.

These emotional attributes are the future. The Australian Digital Experience Report uncovered that the more digitally influential a consumer is – their level of activity and following on social media and in online communities – the higher they rate the digital experience. Importantly, this group by far favoured the emotional attributes of the digital experience to the functional.

Figure 3: What’s important to the digital influencer

These are the consumers of tomorrow, and to gain competitive advantage, Asian brands need to leapfrog the table stakes of the functional digital experience and go straight to the emotional.

Knowing and engaging your customer

The business case for a delightful experience is clear: better loyalty, better advocacy among consumers. But how can Asian brands best realise a digital experience that delights its customers?

Based on the research from the Australian Digital Experience Report and our subsequent discussions with the top-performing brands assessed, delivering a delightful digital experience requires two fundamental actions: know your customer and engage your customer.

Knowing your customer means taking in data from both traditional sources such point-of-sale data, but increasingly from less traditional sources, such as social media, signal or even machine-to-machine data. Behavioural and locational data can be much more representative of a customer’s preferences than prompted data, such that from feedback or customer-satisfaction surveys.

Engaging your customers means delivering a digital experience that aligns to other channels for a consistent omnichannel experience. Best suited is a platform that goes beyond CRM to help a brand serve its customers.

As Asia’s purchasing power continues to rise and smart-device penetration in tandem, the digital experience will rule loyalty and advocacy for a brand. Asian brands can do more than leapfrog customer’s digital expectations; if they invest right, they can also leapfrog the digital challenges Australia faces today.

Quotes:

Engaging your customers means delivering a digital experience that aligns to other channels for a consistent omnichannel experience

How a brand digitally interacts with its customers has arguably become the most important component of the overall customer experience

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