New Adyen research has measured the significant financial impact of long lines in Australia retail.
- $12.52bn AUD in total losses due to customers leaving a store as a result of long lines
- 51 percent of Australians surveyed agreed they would shop at a specific location if it meant not waiting in queue.
- 30 percent of Australians said the reason they do not shop in physical stores was simply to avoid waiting in queues.
- Only 14 percent offer the ability to check out from anywhere on a shop floor with mobile point of sale (mPOS) systems compared with 35 percent in the US.
According to new research by Adyen, the payments platform of choice for many of the world's leading companies, nearly three in four Australian consumers (73 percent) say they have left a store due to long lines, with more than one-third (35 percent) choosing to make the purchase elsewhere and a further 29 percent abandoning the purchase altogether.
The research reveals retail businesses in Australia have lost a total of $12.52bn in potential sales due to customers leaving the store as a result of long queues. Of this amount, $5.78bn in potential sales has been lost to competitors when customers stuck in long lines choose to walk away and make a purchase elsewhere.
Demand for the Convenience Store
The research points to the convergence of retail channels and the power the modern shopper wields, with more choice than ever. Of the Australian respondents surveyed, 51 percent agreed they would shop at a specific location if it meant not waiting in queue. A further 30 percent of Australians surveyed said the reason they do not shop in physical stores was simply to avoid waiting in large queues.
"Today's digitally empowered shopper brings with them an expectation of control, context and convenience, they expect to be able to purchase what they want, when they want and how they want", said Michel van Aalten, Adyen Country Manager ANZ. "In the modern retail environment, the sales channel has taken a back seat in importance to the speed, ease, personalisation and timeliness you can provide".
"In the survey, 65 percent said 10 minutes was too long to wait in queue to pay for a purchase, with 31 percent taking it further and saying five minutes was too long", adds Michel. "We can see that most consumers crave a shopping experience that is fast and easy and long queues in stores represent a significant barrier to meeting this basic demand".
"In the fight to win market share, Australian retailers should look towards creating a convenient in-store experience that can provide multiple sales channels seamlessly".
A Retail Upgrade Needed
Despite the high levels of purchase abandonment, Aussie retailers have largely avoided adopting the necessary technology to combat the issue. Solutions like self-service payment kiosks, one-click checkouts and mobile point of sale (mPOS) can present a largely untapped opportunity for Australian retailers to break down the issue of in-store queues, but their deployment in Australia remains low.
Only 18 percent of APAC businesses surveyed offer self-checkout in store, and fewer (14 percent) offer customers the ability to check out anywhere on the shop floor through mPOS systems. Interestingly, a 2016 Capterra survey revealed 28 percent of retailers in the US said mobile POS had increased the number of product buys in their stores. Payment kiosks, which are designated locations within a store that operate separately from the traditional checkout, only exist in 20 percent of Australian retail outlets.
"Given the speed of which we live our lives these days, it's not surprising to see Australian shoppers discontent with waiting times. What is surprising is the disconnect within Australian retailers in terms of responding to consumer demands and managing the in-store queue, said Michel van Aalten, Adyen Country Manager, Australia New Zealand.
The Next Generation Shopping Experience
The new research from Adyen points to Aussie shopper's eagerness for a new generation of shopping experience, one that allows technology to simplify the purchase journey. Almost half (47 percent) say services like contactless card acceptance would improve their in-store experience.
93 percent of Australian consumers own smartphones, which is more than many large developed global markets such as the US (88 percent). Beyond handheld devices, roughly one in five Australians currently owns a smartwatch (22 percent) or smart speaker (19 percent). Smart speaker penetration in the country tops the US, which sits at 17 percent. The opportunity for retailers to drive new channels of engagement is profound. The continued development of innovative digital shopping experiences should remain a primary strategy for retailers.
"To remain competitive, retailers must move beyond multi-channel strategies and towards unified commerce solutions that allow multiple sales channels to operate seamlessly. Creating a single view of the customer, no matter where, when or how they prefer to shop, empowers retailers to make a sale anywhere at any time" said Michel.
"The brick-and-mortar storefront still shares a high relevance in Australia, but the environment has changed dramatically".
"Shoppers want the entire process to be fast and frictionless, and they want to engage on their own terms. Retailers can't rely on price alone to woo their shoppers as experience has become an unmistakable part of the journey. Australian stores are currently unprepared to address long wait times and need to look toward creating frictionless customer journeys or face the financial consequence of avoiding it" finishes Michel.
Adyen (AMS: ADYEN) is the payments platform of choice for many of the world's leading companies. The only provider of a modern end-to-end infrastructure connecting directly to Visa, Mastercard, and consumers' globally preferred payment methods. Adyen delivers frictionless payments across online, mobile, and in-store. With offices all around the world, customers include Facebook, Uber, Spotify, Freelancer.com, Lorna Jane, Kogan.com, Movember and Showpo.
The survey was conducted by 451 Research and included over 1000 respondents across the APAC region.
Monash University, 24/7/2018 'Shoppers Return to Bricks and Mortar but Aussie Retailers Missing Out' (ACRS Data).
Capterra Research, 9/1/2018 "New Research on Mobile POS Software Systems Usage in the Retail Industry".
Holly Ledlin, 0418 443 008