Digital Link to connect brands and consumers online

Global supply chain standards organisation GS1 has announced a new global web standard to help industry optimise online shopping for the consumer.
In an age where the shopping activity can happen anytime, anywhere – and product data and transparency are in demand – this new GS1 standard will empower consumers and businesses alike to move seamlessly through the world of physical and digital commerce, bringing mobile phone scanning into the 21st century.
Head of customer relations and standards office at GS1 Australia Sue Schmid said: “The GS1 Digital Link is a new generation GS1 global standard that is the foundational bridge between physical products and their digital twins.”
Developed by a group of retailers, brand owners, software providers and technology experts, together with GS1, the GS1 Digital Link standard will complement the traditional, ubiquitous GS1 barcode, which is expected to remain the universal standard for product identification for many years to come. It opens the door, however, for a potential opportunity to migrate to a single web-enabled barcode in the future.
Resembling a Uniform Resource Locator (URL) or web address, the GS1 Digital Link can enable connections to all types of business-to-business (B2B) and business-to-consumer (B2C) information.
Retailers and brands deploying GS1 Digital Link will benefit from the simplification of product packaging and the ability to connect with their customers. By linking the physical world of commerce with its digital counterpart, customers will be able to be alerted on discounts and price matching while they are still inside the physical store.
“As businesses begin to develop systems using the new GS1 Digital Link standard, consumers will be able to access a variety of brand-authorised product information by simply scanning a web-enabled barcode. The product information available will be everything from dimensions and images to expiration dates, nutritional data, warranty registration, troubleshooting instructions, discount offers and even social media links,” added Ms Schmid.
GS1 senior vice president solutions & innovation Robert Beideman said: “The GS1 Digital Link standard will ensure that product data, information about inventory and digital assets for a particular product are linked to each other through a common identity that also links to the actual physical product, which is essential to serving the needs of consumers today.”
Pilot projects are now underway in several countries and some solution providers and brands are already cooperating to upgrade their platforms to support this new GS1 Digital Link standard. Other GS1 standards will also continue to improve the efficiency, safety and visibility of supply chains across physical and digital channels.
The GS1 Digital Link was developed through the Global Standards Management Process (GSMP), the community-based forum, facilitated by GS1, where businesses facing common problems work together and develop standards-based solutions.
For more information about the GS1 Digital Link contact the GS1 Customer Support team or call 1300 22 263.

'Retail therapy’ replaced by ‘retail anxiety’

Online shopping anxiety – not therapy – may be more common than we think, with new data revealing that just seven per cent of Aussies are completely comfortable with the online experience. The biggest fear among Aussie shoppers is around the checkout cart, not losing their delivery.
Parcel delivery service CouriersPlease (CP) commissioned a survey of an independent, nationally representative panel of 1021 Australians who made at least three online purchases in the last six months, to uncover the most common concerns among online shoppers. Possible concerns listed were credit card theft, the validity of the online store, lost parcels, returns policies, and spending too much online.
The e-commerce industry has made significant efforts to keep shoppers’ credit card information secure – this includes accepting payments through PayPal, and offering payment checkouts that require banks to authenticate cardholders via Visa Checkout and Mastercard SecureCode. Despite these moves by the industry, the survey results have revealed that credit card security is still the most common worry for online shoppers – with one in three respondents (36%) most fearful of having their card information stolen online.
The second most common fear is a reflection of the fast growth of local and international online stores: 19 per cent of respondents worried about the legitimacy of the online store they were buying from. A further 17 per cent of respondents worried that their goods would be lost in transit.
Fears that rank lower among Aussies are those surrounding returns policies. Eight per cent (8%) were concerned about not being able to return unsuitable items, followed by seven per cent (7%) of respondents worrying about having to return an item they bought.
The good news is that Aussies think these concerns can be resolved by the e-commerce industry itself: 84 per cent of respondents believe retailers can alleviate these concerns in the future with improved systems, digital technologies and customer service.
CP CEO Mark McGinley said: “Despite online shopping being prevalent and widespread among Aussies, it’s easy to forget that it’s still a relatively new experience for many – it’s only natural to have some fears. As such, it’s important that retailers provide their customers with the best all-rounded experience, such as having the necessary website security certifications to lower fears of fraud, and using a parcel delivery company that they can trust.
“We have a number of processes in place that allow you to track your order, including a tracking number and delivery notification when your parcel is on its way. The notification also offers you flexible redelivery options if you’re not home, such as redirecting to a neighbour, and using one of 1000+ conveniently-located POPPoints to have items delivered to a parcel locker or retail outlet – to avoid items getting stolen.

What are you biggest fears with online shopping? %
My credit card information will get stolen 36
The online store won’t be legitimate 19
My parcel will get lost 17
I won’t be able to return the item 8
I’ll have to return the item 7
I don’t like to pay for things before I receive them 3
I will spend too much online! 3

 

Do you think retailers can solve these fears in the future with improved systems, digital technologies and customer service? %
Yes 84
No 16

 
 
 

Amazon doubles Melbourne capacity in Sydney

Amazon’s second distribution centre, located in Moorebank, South West Sydney, has opened its doors.  The company’s distribution network – with centres in Melbourne and now Sydney – is set to provide customers with faster delivery and expanded product range and availability, the company said.
The new centre, located in Moorebank has a 43,000 square metre footprint, nearly double the size of the Melbourne DC.
The new distribution centre will provide opportunity for thousands of small and medium sized Australian businesses who sell on amazon.com.au and use the Distribution by Amazon program to more easily access customers across the country
“This is an exciting milestone for Amazon in Australia.  The Sydney facility in Moorebank will help Amazon ensure that customers enjoy fast and reliable delivery across more areas of the country,” said Robert Bruce, Amazon director of operations.  “The new Sydney centre builds on the capabilities of our first distribution centre in Dandenong South in Victoria, and expands our ability to service the growing customer demand.”
Amazon said the Sydney distribution centre will bring new jobs to the local economy and provide the thousands of small and medium sized Australian businesses who use Distribution By Amazon (FBA) on amazon.com.au with an opportunity to more easily access millions of customers across the country.  Sellers using FBA will automatically have their products eligible for Prime, Amazon’s newly launched subscription service that provides customers with benefits such as free two-day business delivery, entertainment, and access to members-only deals events, such as Prime Day.
Liverpool Mayor Wendy Waller said: “It is great to welcome the Amazon distribution centre now it has opened its doors in Moorebank. We have seen such a positive response from our local community since Amazon announced it was coming. We look forward to having good jobs for people close to where they live and working with Amazon as a partner in the local community. We expect the Sydney distribution centre will become a key logistics hub thanks to its strategic position in South West Sydney.”
 
 

Australia is suffering from a digital delay

A new study has found that:

  • Leaders do not have a clear understanding of the full impact of digital transformation.
  • Lack of skill sets and legacy organisational siloes cited as top barriers to digital transformation.
  • Business agility, enhancing digital culture, and delivering a seamless customer experience seen as key organisational drivers of building digitally agile business models.

Australian (AU) and New Zealand (NZ) businesses are trailing behind their global counterparts, with only 17% of businesses digitally mature enough to build disruptive business models at scale compared to a global standard of 22%. That is one of the key findings from research undertaken by Infosys.
The research, Infosys Digital Acceleration Study: Infosys Australia and New Zealand Report, polled 175 senior business decision makers from the region’s biggest companies, each with a revenue of over $1 billion, to better understand where Australia and New Zealand’s largest enterprises are in their digital transformation journey and what they require to accelerate that journey.
The survey of senior IT decision-makers reveals that enterprise leaders across sectors are at varying stages of digital agility while facing consistent barriers and opportunities to building disruptive business models at scale.
The report identifies three clusters based on digital maturity:

  • Visionaries transform to meet business objectives through new business models and an innovative culture. They understand digital is central to the success of future endeavours.
  • Explorers are committed to improving their customer’s satisfaction levels. They identify with digital programs that enhance customer service or increase brand value through differentiation.
  • Watchers are largely focused on efficiency-driven outcomes of digital adoption.

Approximately 17% of AU and NZ respondents are identified as Visionaries, in contrast with 22% of their global counterparts, indicating that fewer AU and NZ leaders have identified digital transformation as a central part of their business strategy in comparison to global peers.
The majority of Australian and New Zealand businesses surveyed (55%) fall into the Explorers category, with a focus on digital transformation for the differentiation value it gives them in either customer experience or an uplift in brand value. This is higher in comparison to global peers, of whom 50% are categorised as Explorers.
Additionally, 28% of AU and NZ respondents are identified as Watchers, which is on par with global research. Watchers have partially deployed digital initiatives but are focused on efficiency-driven outcomes.
Common to all groups of business leaders is an understanding that business agility (85%), enhancing digital culture (82%), and delivering seamless customer service (78%) are key organisational drivers to enable them to build disruptive business models at scale. Visionaries particularly recognise that there is a constant need to reinvent themselves to stay relevant to their customers.
Senior vice president and regional head Australia and New Zealand at Infosys Andrew Groth said: “Digital transformation is a process of constant re-invention, where businesses must implement disruptive models that create agility in constantly driving new experiences for the customers at scale. This research illuminates how businesses in Australia and New Zealand can successfully move forward in the journey to digitally accelerate, to leverage the opportunities available to better operate in a digitally-driven market at significant scale.
“Over the years, large businesses within the region are progressing along different digital transformation journeys with varying levels of maturity. We can see a massive opportunity for businesses in the region to leverage digital and disruptive technologies with speed, and also use learnings from some of the more mature global peers from their digital transformation journeys.
“Organisations are facing the challenge of bringing disruptive products and solutions to market, despite having a clear vision and strategy for their digitisation journeys,” he said. “What our research uncovers is that a large number of organisations are encumbered by rigid technology, the digital skills gap and more importantly a culture gap that stifles innovation, which is key to achieving a digitisation vision. This is ultimately resulting in businesses being unable to create the customer experience and competitive advantage at speed, eventually losing the mindshare with their customers.”
Creating an environment conducive to digital maturity a significant challenge
Interestingly, internal challenges rather than external market forces are cited as a major barrier to change with resourcing and legacy issues preventing organisations from making rapid progress. Organisational silos (38%) and transforming from a low risk organisation to an organisation that rewards experimentation (37%) are some of the most prevalent challenges cited by businesses, as well as hiring digital natives and building digital skillsets (38%).
Mr Groth said: “What is apparent in this research is that business leaders know what they need, but often underestimate the full impact of digital transformation once you dig deeper. There is a skewed view of digital transformation, with 67% of respondents having a clear outlook on opportunities, and a considerably lower 50% having a clear understanding on threats. Interestingly, as businesses move to becoming digitally mature, there is a correlation between maturity and higher risk awareness, but we have some way to go in this market.”
Global counterparts are leading transformation, differing vastly per sector
Despite 72% of AU and NZ respondents identified as belonging in the visionary and explorer cluster, there is an overall sentiment amongst enterprise business leaders that their digital transformation journeys are not comparable at an international level. When comparing themselves to global clusters respectively, slightly over half (54%) of AU and NZ visionaries perceive themselves to be globally ahead, while only 22% of explorers and a quarter of watchers (25%) feel globally ahead of peers. When compared to local counterparts, this perception is higher, with 62% of visionaries, 35% of explorers and half (50%) of watchers feeling ahead amongst their peers.
The survey also revealed industries such as the public sector, healthcare and utilities are feeling most behind global counterparts, while logistics and manufacturing are the most confident. Half of public service organisations (50%)  feel their digital maturity is behind global peers, with only 7% reporting being ahead. Healthcare and telecommunications/utilities both report only 19-20% maturity. The retail industry reports a split, with 30% of respondents feeling behind, and 47% of respondents reporting maturity. Both logistics and manufacturing organisations feel comfortable, with 80% and 93% respectively reporting digital maturity on par or ahead of global counterparts.
A full copy of the report is available here.
 
 

There’s hope for supermarkets yet

Most consumers trust supermarkets more than online-only retail giants such as ASOS, according to new research from Monash University.
The first annual Monash University Business School’s Australian Consumer, Retail, and Services (ACRS) Consumer Retail Trust Index 2018 found consumers see online retail and discount variety stores as the least trustworthy of the retail industry.
“Surprisingly, despite the e-commerce and online shopping boom, the least trusted retail sector was online-only retailers who were rated well-below their retail counterparts,” according to Paolo De Leon, research consultant at the ACRS research unit with Monash Business School’s Department of Marketing.
“Unlike with the retail industry overall, when it comes to clothing retailers, communication and products are also key in driving trust. This differs again for supermarkets, where we saw trust in information security emerge as important.”
With current fears around computer hacking and data breaches, customers want to be reassured that the data they provide as part of their local supermarket rewards scheme is secure.
But this didn’t translate to clothing, footwear and personal accessories retailers where key trust factors are communication and products, rather than data security.
More than 630 Australian consumers took part in the study survey, which asked them to indicate their faith in several retail businesses to do what is right. Ratings of trust were also collected in automotive, food and beverage, media and entertainment, and financial services business for comparative purposes.
The research shows that Australians valued five key retail trust attributes: employees, store presentation, product quality and innovativeness, communications and information security. While retail stores and their employees are key when it comes to trust in the overall retail industry, these weren’t necessarily influencing factors of trust in specific retail sectors.
Senior research consultant at the ACRS research unit Dr Eloise Zoppos said this research highlights the need for retailers to understand the factors driving consumer trust, which can then help to refine their business operations, including marketing campaigns and communications strategies.
“Our research found that trust has a strong impact on loyalty and likelihood to recommend, including the Net Promoter Score – a tool used to gauge the loyalty of a firm’s customer relationships,” she said.
“Trust varies greatly by retail sector. Brands and retailers need to know their trust drivers and which trust levers to pull, as it’s only after that point that an effective trust building strategy can be developed.”

Most trusted retailers Least trusted retailers Important factors of trust
Supermarkets Online-only retailers Employees
Pharmacies Discount variety stores Store presentation
Sporting goods Discount department stores Product quality and innovativeness
Computer / technology   Communications
Department stores   Information security
Homewares    
Clothing / accessories    
Footwear    

Source: Australian Consumer, Retail, and Services (ACRS) Consumer Retail Trust Index 2018

Why are Australian retailers missing out?

Australian shoppers are flocking back to traditional brick-and-mortar stores compared to online, but retailers are failing to capitalise on this resurgence, latest research from Monash University has found.
The latest data from Monash Business School’s Australian Consumer, Retail and Services (ACRS) research unit quarterly survey of Australian shoppers shows 65% of shoppers prefer using bricks-and-mortar stores most of the time, compared to 18% of Australians preferring to shop online.
Despite this renewed attraction to traditional shopping methods, Dr Rebecca Dare, managing director of the ACRS research unit within Monash Business School’s Department of Marketing, said Australian retailers are not maximising their in-store experience.
“We see trends overseas with empathic, human-centred design and advanced technologies that make shopping easier and/or more pleasurable, however, in Australia it’s all too common to see that in some cases the basics aren’t right – stock is piled high to the ceiling, merchandise is displayed poorly, and finding personalised customer service can be difficult,” Dr Dare said.
The current trends show Australians are shopping more frequently in 2018 than they were in 2016, but bucking the general theories, ACRS research shows that Australian shoppers are increasingly drawn to physical stores, not online channels, to make non-grocery purchases.
“We are also seeing similar trends overseas. Nearly 80% of shoppers in the USA purchased more than half of their items in-store in 2017. Australian retailers need to understand that customers want the experience that the physical store can bring. Retailers just need to provide it,” Dr Dare said.
Dr Dare said there are numerous best practice examples of overseas brands and physical stores winning on customer experience.
IKEA in the UK is discounting umbrellas on rainy days that communicates a human understanding, while providing a solution to an everyday problem. Also, Nike in the USA is using technology-enabled personalisation through the Nike Maker’s Experience, which allows shoppers to design their own custom shoes in-store.
Dr Dare said such notable examples are sparse in the Australian retail landscape and Australian retailers need to become better equipped to take advantage of the shift back to bricks-and-mortar.
“There is a return to the importance of customer experience at physical stores. Human touches and the sensory experiences of a store visit are increasingly important, particularly with millennials – who prefer to spend more money on experiences than on material things,” Dr Dare said.
“Shoppers miss the customer experience of physical stores; ‘real life’ connection with other people, touching things and trying them on is not an experience you get online.”

On-demand, gig… or just plain exploitation and slavery?

The TWU is calling for the regulation of the ‘on-demand’ economy as Fair Work takes sham-contracting case against Foodora.
The Transport Workers’ Union is calling for urgent regulation of the on-demand economy after the Fair Work Ombudsman announced legal action against Foodora over sham-contracting of bike riders.
The TWU is already fighting sham-contracting at Foodora after taking several cases of unfair dismissal. A test case hearing will be held in Sydney on 3-4 July.
The union also criticised Foodora over leaked internal emails that showed the company was aware it was engaging in sham-contracting. A survey of riders has shown three out of every four riders are paid below minimum rates.
“We welcome the Fair Work Ombudsman’s legal action against Foodora, a company that has openly flouted the law by denying its workforce’s rights.
“But action must go broader than just one company and just a few riders. All workers deserve the rights and protections that generations have fought hard for.
“The on-demand economy is a tired example of old-fashioned exploitation with tech billionaires reaping the benefits at the community’s expense. The Federal Government is refusing to regulate rights for all workers, regardless of being alleged contractors,” said TWU national secretary Tony Sheldon.
“The sham-contracting comes as no surprise to the thousands of delivery riders who are working in the on-demand economy. Food delivery companies control all aspects of the work riders do, demanding they work shifts and penalising them if they don’t work where and when the companies want them to.
“The flexibility is all on the side of the companies with the riders bearing all of the risk. Riders have no superannuation, no guaranteed minimum rates and can work shifts for no pay at all. They can be sacked without warning and for spurious claims as the companies argue they have little or no rights. This area is crying out for regulation,” he added.
The TWU recently signed agreements with Coles and Airbnb to ensure fair and safe conditions for workers in the on-demand economy.
Riders have protested in Melbourne and Sydney in recent months over pay and conditions.
The rider survey also found:

  • Almost 50% of riders had either been injured on the job or knew someone who had.
  • Over 70% of riders said they should get entitlements such as sick leave.
  • 1 in 4 riders (26%) work full time hours (40+ hours per week).
  • 3 in 4 (76%) riders work 20 or more hours per week.
  • Over 26% work more than 40 hours a week.
  • The average age is just under 26 years.

 

Alibaba’s Jack Ma to spend $20bn on logistics, handle 1bn parcels a day

Following Tuesday’s announcement of driving its logistics green, Alibaba founder Jack Ma has provided further details on his plans for the group’s logistics arm.
Alibaba Group will invest over 100 billion yuan (approx. AUD 20bn) to build the technical backbone for a smart logistics network aimed at improving delivery reach and efficiency, as well as sharply driving down logistics costs, said executive chairman of Alibaba Group Jack Ma at the 2018 Global Smart Logistics Summit.
The network mainly aims to push 24-hour delivery across China and push logistics costs down to less than 5% of China’s gross domestic product from around 15% at present, and thereby increasing profit margins for the manufacturing industry and logistics sector. It also aims to push 72-hour delivery to the rest of the world.
Over the past five years since its establishment, Cainiao Network, Alibaba’s logistics arm, has witnessed an increasingly intelligent logistics industry as a result of the joint efforts of Cainiao and its partners. Through technology innovation and open collaboration, Cainiao has reduced cross-border shipping time from an average of 70 days to less than 10 days for some countries. The number of B2C parcels that go through customs clearance is now one million every day. Within China, Cainiao’s same-day and next-day delivery now covers 1,500 counties and districts.
“This network is not only national, but global. This is on what we will work closely with our partners to achieve and bring benefits to all,” said Mr Ma. “As the industry will increasingly become tech-driven, Cainiao aims to be the ‘brain’ of the logistics industry. Since the first day of its birth, Cainiao’s mission is not to deliver goods, but to help delivery firms to deliver goods by building a network that links all logistics elements and connects every deliver person, every warehouse, every hub, every city, and every house.”
Today, about 100 million parcels are processed through Cainiao’s logistics platform every day. What has made it possible is Cainiao’s efforts in driving industry digitalisation. For example, the electronic bills and labels have helped digitise and standardise the industry infrastructure.
China’s logistics landscape has undergone massive change in recent years, reaching unprecedented scale. Ma noted the industry started from zero ecommerce parcels and is now delivering 130 million parcels per day, while there are about five million people working at courier and food-delivery companies in the country, and seven delivery companies have gone public.
With that pace of change, it’s not unreasonable that the peak handling during the company’s 11.11 mega-sale will become the daily average a decade later.
“We want to build this network to help the industry to meet the future needs,” said Mr Ma. “Today, the industry can process 100 million packages a day. In the future, we will need to process 1 billion packages a day. The logistics industry need to get prepared for that with a robust infrastructure.”
The company has also announced plans for five global distribution centres. More details in Tuesday’s newsletter.

Same day delivery = more cost

Three-hour and same-day delivery will be available on a national scale and beyond urban areas, an e-commerce and parcel delivery specialist says, for those customers who are prepared to pay and those retailers who are willing to subsidise some of the costs.
Jessica Ip, head of commercial & transformation at parcel delivery company CouriersPlease (CP), which delivered nearly 18 million parcels Australia-wide and internationally in 2017, has over a decade of experience in the delivery and e-commerce industries.
Previously working for Qantas Freight, Ms Ip says she has seen an increase in the conversation around same day delivery but warns these services will not be widespread across Australia without some cost to the retailer and customer.
“The recent discussions I’ve been having with customers have all been about same day, after hours and weekend delivery. A few businesses are starting to offer these services in some capital cities and Amazon is working on bringing its Prime services here, but the key point is that it is for a price. Whether these services are scalable, so that retailers and consumers are okay with the price points, is the question,” she said.
According to Temando’s most recent report, an equal 68 per cent of Australian online shoppers want express (1-3 days) delivery and standard (5-7 days) delivery, compared with 41 per cent of shoppers who want same day delivery and 37 per cent who want hyperlocal delivery. Customers are also only willing to spend $2 more on same-day delivery and $3 more on hyper-local delivery than they are on express delivery.
“To make these services widespread, online shoppers need to be comfortable with paying additional fees, and retailers need to be willing to subsidise some of the costs to make it commercially viable. But Australian shoppers are not as willing as shoppers in markets where these services are available to pay additional fees for faster delivery. In the US – where same-day shipping is widespread – shoppers are willing to spend US$18 for these services, whereas Australians only want to spend AU$13. While some consumers may want it, same-day delivery is not popular enough at this stage, because of the price point, to become scalable on a national level.”
Ms Ip also makes the point that Australia’s geography is very different to the rest of the world, which makes it hard to offer these services at a reasonable price. “While these services are being offered in the US and UK, Australia’s market is very different. We have a relatively small population, spread over vast distances, with very little infrastructure compared with other well-established markets,” she said.

Chinese e-commerce giant in Amazon’s footsteps

China’s largest online retailer Global JD or JD.com has announced it will enter the Australian market and open its regional HQ in Melbourne.
The Victorian Government has been courting JD.com to come to Victoria, hoping the move will give local businesses the opportunity to share their skills, products and expertise with new global markets.
JD.com has over 266 million customer accounts making it one of the largest – some say largest – e-commerce companies in China. The company’s presence in Victoria is hoped to help local businesses connect with new customers.
The company operates China’s largest nationwide distribution network with seven centres and more than 400 warehouses servicing 2,830 counties and districts throughout China. It sells everything from vitamins and electronics to clothing and books.
The government said representatives from JD.com visited Victoria in October for Food and Beverage Trade Week and were able “to get up close and personal with major Victorian businesses across the state”.
JD.com will join other e-commerce companies that have set up in Victoria in recent times, “cementing the state’s position as the national leader in e-commerce” according to the government.
Trade with China is very important to the Victorian economy, with 2016-17 total two-way trade between Victoria and China reaching $23.4 billion.

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