In recent times, innovation has taken centre stage in the world of business and for good reason. Leading innovators report faster revenue growth than their peers, and often see better employee retention and higher customer lifetime value. Yet, the innovation path isn’t always clear or easy to navigate.
To get a picture of how businesses are approaching innovation today and whether they are prioritising the innovations that matter most to consumers, Mastercard worked with Harvard Business Review Analytic Services on Become 2021, a global study which provides a roadmap for businesses around the world to spark innovation.
Getting greater insight into what innovation leaders in Australia and New Zealand (AU-NZ) do differently, as well as what consumers in the region really want, is necessary to successfully adopt a customer-centred approach to innovation.
So, what are the vehicles for innovative retailers to separate themselves from the rest of the pack?
From traditional to tra-digital
The convergence of physical and digital commerce is often referred to as a futuristic concept. Yet it’s not futuristic at all, it’s happening now. Consumers are expecting smarter ways to transact and pay, and innovative retailers are capitalising on this opportunity by removing friction and creating seamless and memorable customer experiences (CX). The report found 39% of AU-NZ consumers surveyed place high value on easier online ordering during the pandemic.
Innovation isn’t restricted to the online space. Companies like Amazon have launched checkout-free environments, exploring how waiting in line can be removed from the brick-and-mortar shopping experience. These solutions automatically detect when products are taken from, or returned to, the shelves and keep track of them in a virtual cart. This type of innovation is made possible by the same technologies used in self-driving cars: computer vision, AI, sensors, and machine learning.
Rapid and autonomous delivery is another example of innovation enhancing the customer experience and spurring novel approaches to old problems. Internationally we’ve seen Walmart and Kroger, all investing in ways to reduce the time it takes for a consumer to receive their goods once an order is placed. The exponential growth of e-commerce has required retailers to pay close attention to the role of technology in their customer experience.
Accelerating, sharpening customer insights
While organisations may know that innovation is important, doing it well is still a challenge. One limitation observed locally is a disconnect between perceived versus actual customer needs.
In one example, Become 2021 research found that AU-NZ organisations under-prioritised easier online ordering, which was consumers’ most-valued purchasing feature. As COVID-19 kept consumers around the world at home, nearly everything from groceries to gardening supplies was purchased online. Mastercard’s latest Recovery Insights report found this shift amounted to an additional $900 billion in global online retail spending in 2020. Retailers with great online experiences captured more than their fair share of those new sales.
Sharpening consumer insights to bridge the disconnect has significant implications, with retailers that prioritise digital continuing to reap the benefits. Even the smallest businesses see gains when they shift to digital. These insights provide retailers with the tools to improve either their product or service, using them as a vehicle for inspiration. Something that 75% of AU-NZ organisations are already doing.
Proving a commitment to customer care, listening to customers, and using their insights to improve their offering will pay dividends for retailers, and is a key differentiator and growth vehicle.
Staying on the front foot of fraud
Much like consumers globally, Kiwis and Aussies consider data security a high priority, especially given the growth in online retail. Almost half (48%) of consumers cite data privacy and protection as the most important element of a perfect customer experience. In fact, the report found that data privacy and cybersecurity are the innovations they are most excited to see impacting the purchasing experience in the next year.
Additionally, 80% of AU-NZ consumers agree it is important that the companies they buy from are using secure technology to make their privacy ironclad. New technologies like digital wallets and tokenisation bring the security consumers want with the seamless experiences they expect. These solutions can remove consumers’ need to carry cash, queue in shops to pay, carry a wallet, or remember numerous passwords required to make a payment.
The complexities of the pandemic have primed consumers and businesses around the world to leverage digital and virtual tools. And as we shift to a new normal, this will be critical to success.
Retailers who innovate and embrace these insights and changes in customer behaviour will reap the rewards. Visit becomeindex.com to download the AU-NZ report and take the Become Challenge. The report will provide helpful insights to inform your customer experience journey toward innovation, while the challenge will benchmark your organisation compared to global innovation leaders.
Peter Chisnall is Country Manager for Mastercard in New Zealand and the Pacific Islands.