New research by the Commonwealth Bank shows the Australian retail sector has fallen behind the average business when it comes to innovation capabilities, and retailers should seek customer feedback to gain that innovation.
According to new analysis by Commonwealth Bank, fewer than 20 per cent of retailers are innovating in direct response to customer feedback (17 per cent) or observed changes in customer needs (15 per cent).
Furthermore, even fewer retailers are seeking to drive innovation to protect against disruptors or a changing workforce (10 per cent).
When assessing 15 entrepreneurial behaviours and management capabilities that comprise the CommBank Innovation Index, retailers have experienced only a modest year-on-year increase in the industry’s index score.
Now at 29.5, the retail industry sits below the national average across all industries of 32.0. This time last year, retailers recorded an index score of 26.2 – ahead of the national average of 24.0.
Jerry Macey, national manager of retail at Commonwealth Bank says, “Retailers continue to demonstrate cautious optimism, maintaining healthy levels of innovation activity across the industry, albeit that retailers’ innovation index ranking has been outstripped by the average across all industries.
“While more retailers are adopting certain behaviours needed to support innovation, the research suggests that critical drivers of change, such as gathering customer feedback, responding to behavioural shifts, and the reality of disruptive threats are being ignored across the industry.”
The research shows that Australian retailers have invested an average of $101,000 per business on their implemented innovations in the past 12 months. This translates to approximately a third of the average investment in innovation across all businesses of $300,000.
The full CommBank Retail Business Insights Report can be downloaded here.
