Nothing puts fear into the retail industry like the entrance of a global heavyweight digital disruptor. Amazon entered Australia just ahead of the Christmas shopping frenzy, and industry pundits are quick to declare the death of retail as we know it.
But SAP sees it differently. As Colin Brookes, president and managing director for SAP Australia and New Zealand says, “Amazon’s entry into the local market sparks a new era in digital engagement across all industries.”
In November 2017, SAP launched its third Digital Experience Report in Australia, a research initiative that measures organizations’ digital performance according to what their consumers think. Investigating nine industries through a sample size of 11,000, it is an in-depth assessment of digital performance in the market, allowing analysis at the national, industry, and even individual-brand level.
“The research shows us that only one-third of Australian consumers are actually delighted by their digital experience, how they interact with a brand digitally during the discovery, purchase, delivery, and support of a product or service,” Brookes says. “There is a gap: 69% of Australians are either unsatisfied or ambivalent with the digital experiences brands deliver in the market.”
“Not only is there a gap, what the findings show us is that this gap has very significant implications on business performance, particularly on customer loyalty and advocacy,” he adds.
That smaller percentage delighted with the digital experience are 3.5 times more likely to remain loyal to a brand than those unsatisfied. Additionally, those delighted with the digital experience gave their brand an average NPS score of 64%, while those unsatisfied were scathing in their detraction with an NPS of -47%.
The results varied significantly across brands and industries. But the main take away according to Brookes? “There’s a huge opportunity for SAP to show customers the way to superior digital experiences and through those experiences help them improve customer loyalty and advocacy.”
Backing Up the Path to Digital
According to a Frost & Sullivan study, 98% of Australian executives claimed they were executing well on their digital strategy. But when those executives were asked to share evidence of this, they couldn’t. SAP’s Digital Experience Report provides the ultimate evidence of digital performance: not according to the executives and not according to SAP, but according to the end consumer. “At the end of the day, only the end customer’s interpretation of digital value matters,” Brookes says.
In 2016, then president Adaire Fox-Martin commissioned the research across 10 markets, highlighting the various levels of maturity of digital across the region. But the fundamental story remained the same:
- There is a gap between what consumers expect in a digital experience and what brands are delivering.
- That gap matters, significantly impacting loyalty and advocacy
- Organizations can do something about it by re-imagining their processes for digital engagement
Point three is of particular relevance today, as new technologies spark new ways of engaging with customers. Augmented reality, artificial intelligence, blockchain and more can work in the back and foreground to deliver drastically better digital experiences. Netflix, for example, the top performing brand across all industries in the report, has attributed US$1 billion annually to the application of machine learning. This technology drives greater loyalty among Netflix’s customers through algorithms recommending videos.
“The hyper-local, brand-level findings of the report paired with the value our solutions deliver, especially in the days of SAP Leonardo, create fertile ground for meaningful discussions with our customers,” Brooks says. “The report validates and enhances SAP’s digital story. It offers our customers insights that no competitor can match. With the arrival of Amazon in Australia, entire industries need to lift their game, and we’ll be right here to show them how.”
Simon Gomes is head of Media Relations for SAP Australia and New Zealand.