As online and physical retail converge, retailers have the opportunity to launch new digital apps and boost their instore experience. For many years retailers have wanted their customers to identify themselves when they arrived in a store, but there was little reason for them to do so.

Now, with most Australians used to pulling out their phones to check in with a QR code, many more will be prepared to check into a retailer as well.

“The idea that people pull out their phone and ID themselves in the shop I think opens up a whole new world,” says Banks.

“And Covid has trained consumers to do it, obviously for the government app but it’s now no longer a foreign concept.”

Retailers could offer a discount, bonus or incentive to shoppers who download their QR code – reducing their cost per acquisition - and subsequently use the data to offer targeted specials or discounts.

There are a couple of things retailers need to get right to take advantage of the trend towards online and bricks and mortar convergence, Banks says.

The first is correctly managing inventory, so that the goods consumers want are available, without adding too much to the logistics cost of the retailer.

“Cracking the code on how do you keep inventory moving in a click and collect world is for me tremendously important, because the cost of moving inventory around is phenomenal,” Banks says.

Additionally, retailers need to make their apps and websites as frictionless as possible.

“Every click is a chance for somebody to get bored or distracted,” Banks said. “We tell retailers things like, don’t make your customer have to put their address in. Typing out an address is going to kill your sales and there are multiple ways you can pull that information from a digital wallet or log-in using commonly used platforms.

“How do you get focused on removing every single click of friction in that experience?”

Retailers also need to manage fraud on their sites and apps while at the same time ensure that they don’t make their fraud rules so tight that they reject legitimate purchases. Artificial intelligence and machine learning can examine suspicious looking transactions, such as a consumer using and new device or location, and determine if they are genuine, without having to interrupt the shopping experience.

Consumers are also looking for a range of different ways to pay, and will choose different methods depending on the type of purchase to help them budget and manage their money, be it credit or debit card, bank account, PayPal, or the increasingly popular buy now pay later option.

Some 45 per cent of Australians have now used a buy now pay later service, with two-thirds of Gen Y shoppers having used the service, according to the PayPal Australia eCommerce Trends Report 2021.

Even when offering choice over payment methods, keeping friction to a minimum remains important. “A really great retailer knows how to offer that choice without confusing the customer and offering too many choices at check out,” Banks says.

The COVID-19 pandemic has changed both what Australians buy and how we buy.

Many retailers offered click and collect in the past, but uptake had been slow until the pandemic propelled it to a mainstream shopping trend.

Shoppers are also buying more in social media environments. In a trend known as social commerce, consumers are making purchases via their social media platforms, such as Instagram or Facebook, without going to a different site or app.

The lockdowns have also changed what Australians buy online. Grocery purchase and delivery or click and collect have surged as consumers have grown wary of going to the supermarket. Prepared home-delivered food from the likes of Uber Eats and Menulog has also risen, but so too have purchases of upscale food.

Electronics retailing surged last year as workers bought new laptops, screens and pads for working from home, but has slowed down this year as workers have got their home offices set up.

One surprisingly strong retail category was pet accessories – food, collars, beds – as Australians have lavished attention on their cats and dogs during lockdown.

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