As the festive season approaches, Australian consumers are expected to splurge on home goods, driven by a combination of post-pandemic home improvement trends and the desire to create cozy and inviting spaces for the holidays.
Australian brands have embraced machine learning to supercharge their buying, pricing and marketing strategies ahead of the pre-Christmas spending surge.
As the nation’s peak shopping months approach, converting consumer intent into action during this period will be critical for both short-term and long-term profitability, according to a leading data analytics expert.
RSM Australia Partner Dr Ian Tho works with some of Australia’s leading brands across sectors like retail, hospitality and entertainment, and said there were two key ways brands could optimise data-based learnings in line with increased sales activity.
“The globalisation of the online marketplace, and influence of international shopping events like China’s Singles’ Day (11 November annually) and the United States’ Black Friday and Cyber Monday, have made November Australia’s top shopping month in recent years,” Dr Tho said.
“Both online and bricks and mortar businesses could leverage this heightened consumer interest by deploying their most data-insightful promotional strategies, better matching product offerings with those most likely to purchase, and minimising cart abandonment.
“Secondly, the sheer volume of increased transactions in October and November presents an opportunity to track the most meaningful purchase insights and deploy these in future stock purchasing, price negotiation and marketing decisions to grow long-term profitability.
“Advancements in machine learning has meant that combining these insights with trends-based analysis and even metrics like weather patterns and traffic disruptions can happen much more quickly and provide much more accurate indications of in-store and online foot traffic and purchase cycles.”
While month-on-month spending increased across all major retail categories between October and November 2023 according to the Australian Bureau of Statistics (ABS)1, household goods retailing recorded the greatest jump at 7.5 per cent.
According to Dr Tho, who previously managed Google’s Asia Pacific data science & advanced analytics team, a focus on home-based spring cleaning and cost-of-living impacts could again boost spending across this category and others in 2024.
“For cost-conscious consumers, discounting on typically large-cost items like holidays, technology, furniture and whitegoods could be particularly lucrative in the months ahead,” Dr Tho said.
“However, given the intensity with which consumers will be researching the best deals across multiple retailers, brands need to ensure they are bringing something unique to the shopping experience, whether that’s at the price point, product diversity or service offering.
“While the research and decision-making cycle can depend on the specific product, some consumers begin considering their Black Friday purchases in October, or even earlier, with cost-of-living pressures forcing more careful buying pattens.
“In our work with retail clients, we have seen a significant proportion of customers taking six or more actions before deciding to try a new brand or product, which may include searching online, comparing prices, visiting a store or checking the returns policy.
“It’s important that brands stay top-of-mind as early as possible and throughout this process, so that when the shopping surge occurs and the decision is made, theirs is selected for the purchase.
“Based on past website analysis, the greatest surge of Black Friday online shoppers happens just after midnight, so it’s imperative that businesses are also ready to handle that surge in web traffic so as not to self-sabotage their efforts.
“Whether a small or large retailer, the three key moves brands should make in this period are connecting consistently with customers through an increasingly complex journey, leaning on AI to engage and convert purchasers across the funnel, and truly getting into the customer mind and emotional aspect of discount and gift-based buying to make every holiday connection count.”
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Australian retailers are gearing up to meet consumer expectations with a variety of products and promotions. News, holday Dynamic Business
