A new report from Publicis Sapient has highlighted the underutilisation of brick-and-mortar stores in the Australian retail market, advocating for an 'Omni-Fusion' approach to create a seamless customer experience across both physical and digital channels.

The report, titled 'Retail at a Crossroads: The Imperative for Digital Transformation', explores the current state and future direction of the retail sector in Australia.

It reveals that 76% of shoppers encounter discrepancies between online and in-store stock availability. Additionally, 67% of consumers use mobile devices in-store to check reviews, compare prices, and verify stock availability. However, nearly half of these consumers experience poor mobile reception, which can hinder their shopping experience.

The report also highlights that 63% of consumers expect AI-powered product suggestions, with 28% expressing frustration due to a lack of personalisation. Despite the rise of online shopping, 81% of consumers still visit stores to see, touch, and try products, particularly in categories such as fashion, furniture, and electronics. Furthermore, 44% of shoppers rely on in-store staff for recommendations and support.

Publicis Sapient identifies four key forces reshaping Australian retail: omnichannel innovation, AI and automation, loyalty and personalisation, and sustainability and supply chain transformation. The report underscores the importance of these factors in driving the future of retail.

Managing Partner Retail and Consumer at Publicis Sapient Australia, John Costello, said: "While online sales are growing, it is important to remember that the vast majority of purchases still happen in physical stores, demonstrating the strong advantage that traditional retailers hold in the Australian market. Market uncertainties are also putting further strain on global supply chains, widening the divide between what is available online and in-store. In order to thrive is the new reality, retailers must act now to improve their customer experience offering.

"In today’s environment, traditional retailers must reimagine the in-store experience as a key driver of customer loyalty and brand differentiation. We are already seeing leading examples across Australia, including David Jones’ reinvention of the department store experience. At Bourke Street, they’ve unveiled a completely revamped beauty floor with immersive brand zones and concierge services, while also expanding premium offerings like expert personal styling in private suites and specialist fitting and tailoring services.

"These enhancements are part of a broader strategy to turn physical locations into high-touch, experience-led destinations. Physical stores are not just an advantage, they are a critical competitive asset that retailers must evolve and maximise to thrive in an increasingly global and digital market."