Why Australian Organisations Don’t Do It!

Australian Online Businesses

There is a definite disconnect between Australian consumer usage of the internet and the investment in digital from organisations. Despite the many articles promoting the potential of digital – it is only few – mainly the pure play online organisations that are benefiting from the digital phenomenon.

However despite the strong signals of consumers both spending increasing amounts of time and money online, organisations are not slow off the mark to invest in the digital channel. And the statistics prove it.

Australian Online Behaviour & Organisations Online Spend

Statistics from Mike Hall, Director of Holler advised that more than 13 million Australians are online and the digital life survey suggests that as a nation we now spend one-third of their leisure time online, which according to Nielsen is 16.1 hours online per week. But our time online is not just spent browsing, according to Mike in 2008 Australians spent approximately $24 billion dollars online.

The Nielsen advertising report, released in March 2009, demonstrated the significant gap that exists between online promotion and consumer consumption of media. Of the top 10 retail organisations advertising in Australia, only 1% of ad spend is invested online. This same trend currently exists within the beauty & cosmetics sector whilst in the entertainment and leisure sector the proportion is slightly higher at 3%.

But the time spent online by consumers is not matched by the online spend of organisations.

So whilst many businesses will claim that Australian consumers are not likely to buy online, the above demonstrates the lack of investment by organisations.

So why is there such a disconnect?
I believe there are several reasons why organisations are not jumping on the digital bandwagon, these are;

Poor Digital Leadership;
Traditional marketers are not equipped to lead the digital charge and champion the digital channel at a senior level. If senior stakeholders are not truly convinced of the opportunity the channel will not be taken seriously, and the appropriate investment will not be made – leaving digital unable to live up to its promises.

Customer ComplainingBad Experiences;
Mark Freidin from www.internetretailing.com.au understands the impact a bad online investment experience can have on an organisations attitude towards the channel. Mark has witnessed the early introduction of eCommerce by Australian organisations and feels bad experiences in the earlier part of the decade have left a bitter taste in retailers’ mouths. He says “A lot of national retailers jumped on board in the early stages because everyone else was doing it. Instead of trying to understand this new channel and how it would work (and what it would entail to run and manage) many businesses did not tie eCommerce to their master strategy and spent money on the technology without defining what they wanted to achieve and how they were going to market themselves online. 10 years later in Australia many CEO’S are older, and more wary about their online experiences so they steer clear of selling online.”

Lack of client side knowledge;
Whilst there are many digital consultants and agencies in Australia, there is a lack of digital knowledge on the client side at all levels that are continuing to drive the implementation of digital tactics. Organisations looking to invest in digital must not only invest in the tools, but invest significantly in retraining traditional marketers to ensure they are equipped to drive the value from the digital channel.

Lack of local training & case studies;
Australia has developed a strong community of independent bloggers on various digital topics. However Australia lacks the formal nationwide digital training that is required to re-skill traditional marketing professionals. Many traditional client side marketers wishing to up-skill are unsure of where to go both online and offline to gain the skills required to grow their digital knowledge base. As a result marketers are more inclined to use techniques where their expertise lies and those which they can comfortably implement to show return.

In addition, whilst there are many online case studies for brands successfully leveraging digital channels overseas, Australia lacks the local examples to prove that digital campaigns can be successful in the local market. This makes it difficult for marketers to push the digital agenda within their organisation.

Local big boys aren’t leading the way;
If the big retailers are unable to monetise the digital channel, it casts doubts over its potential. Small to medium organisations are not in the position to take risks and invest in a channel without knowing the outcome – thus these organisations are looking for the reassurance that there is money to be made. Thus as this is not currently occurring it casts doubt over its potential for the wider business landscape in Australia.

Lack of understanding of the online influence for offline sales;
Online and Offline IntegrationResearch by Outrider at the end of 2008 demonstrated that many Australian consumers are researching their purchases online before making the final transaction. Whilst the dependence on the internet during the research phase differs greatly depending on the category, 1 in 4 consumers are researching white goods online prior to purchase, nearly 1 in 2 are researching electronics, automotive and telecommunications, and nearly 80% of consumers research their travel arrangements online.

Thus many organisations are failing to see the direct correlation that exists between online efforts and offline transactions. Organisations need to understand that not being there during the initial research phase, may mean the brand is not in the consumers final decision set when it comes to making the purchase. Until organisations can quantify this, uptake and investment will be slower than it should be in the Australian market.

Do you have any thoughts or insight into why Australia is slower on its uptake of Digital? If so share your thoughts below.

Want to expand your digital knowledge base?
If you are interested in learning more about Digital Marketing in Australia, visit www.internetretailing.com.au. This new site has been created as a knowledge centre to assist Australian organisations to learn about how to market themselves online.

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