Competing for a more discerning dollar


CommBank’s newly released retail spending intentions index recorded strong growth in July, up 5.2 per cent from the same month last year. While the index – which provides insight into actual and intended spending patterns – shows consumer spending is generally healthy, it also reveals a deeper undercurrent.

Examining specific categories shows that higher prices are translating to higher spending. With food goods and alcohol experiencing outsized monthly increases, the impact of inflation was in focus. CommBank’s credit and debit card data also showed signs that discretionary spending was slowing over July as higher interest rates crimp household budgets.

However, while higher prices are evident, they only tell part of the story. Retail transaction volumes also grew over July by 2 per cent, suggesting that retail spending remains robust. Not only that, but the retail spending index overall is up almost 15 per cent this year compared to last1, and our data shows strong spending growth across both e-commerce and in-store in the year to date. 

Yet, in an environment where consumers become more discerning, input costs remain elevated, and competition picks up, boosting traffic and driving sales conversions take on even greater importance. We look at some of the strategies we’re more regularly discussing with our retail industry clients.  

Back to the future

With trading conditions starting to closely resemble the pre-pandemic era, retailers are again recalibrating. Savvy businesses are seeking to re-establish new baselines now that the dust has settled, from financial performance and stock turnover to operating rhythms. 

Even new business models and innovations launched during the pandemic are under the microscope. This mindset of continual review and iteration can ensure that scarce resources are directed to where they will have the most commercial impact.

Optimising channels

According to CommBank data2, online turnover across our merchant base has grown 18.2 per cent over the past year. This was from a higher base, given the surge in online purchases experienced during the pandemic. Meanwhile, in-store purchases are running 19.7 per cent higher in the past year as customers emerged from lockdowns, albeit from a lower-than-average base.

Multi-speed growth across channels brings retailers’ omnichannel experience and strategy further into the frame. Asking whether these market-wide shifts reflect your customers’ behaviour can help strike the right balance across channels to capture sales. Tools like CommBank’s DailyIQ^ platform, which analyses business transaction data, can help provide actionable insights to answer these questions.

Customer at the centre 

Many retailers have built up tremendous consumer goodwill over recent years. Maintaining that will rely on a clear customer-centric value proposition. 

Consumers’ experience during the pandemic exposed them to a world of convenience where they could shop on their terms, not the retailer’s. That means retailers must consider where their customers are, and how they shop, and closely monitor and adapt to changes in preferences or expectations of their customer experience.

Getting personal 

Understanding and unlocking customer preferences are the first steps to adding value to consumers on a personal level, and that relies on data and relevant communication. Increasingly, consumers expect their experience to be personalised, conveying that a brand knows them and cares about their needs. 

Using customer relationship management systems (CRM) and other data-led platforms is one option to help build more complete pictures of your customers and better cater to their needs. This can help drive conversions where, for example, retailers engage with customers across the sales funnel. 

This is something we focus on at CommBank. We deliver personalised rewards to our customers via the CommBank app3, including cashback offers based on where they have shopped before or outlets we think they will like.

Breaking down purchasing barriers

The CommBank spending data and our discussions with retailers suggest that bigger-ticket household items are most likely to be under scrutiny among consumers. But there are options for retailers to pave the way for consumers to make informed decisions and purchases.

Being attentive, answering every question consumers have, and reducing purchase barriers are essential. This is where putting the customer in control of how they purchase can help, including a range of new financing and payment options for the customer to choose from. More and more, savvy retailers are moving with the market and offering their customers a broad range of payment and fulfilment options to increase conversion rates.

These are just some of the factors worth considering as competition for consumers’ share of wallet intensifies. We are very conscious that many other challenges – from labour shortages to supply chain inefficiencies – have a bearing on costs and the customer experience. But as the economic cycle turns and customers consider how and where they shop more carefully, leading retailers are already responding to the factors that sit squarely within their control. 

Learn how CommBank can help your retail or consumer-facing business, visit CommBank for Retail,

About the author:  David Martin is national manager, retail and e-commerce, at Commonwealth Bank

Things you should know

 1CommBank Household Spending Intentions (HSI) Index July 2022

2 CommBank Merchants data – Industry Performance Dashboard

3 CommBank Rewards, visit

^ Daily IQ has been prepared as a research tool for general informational purposes only and should not be relied on to make business decisions or for account reconciliation. The information may be incomplete or not up to date and may contain errors and omissions. Any projections and forecasts are based on a number of assumptions and estimates, including future events and contingencies, which may be inaccurate. 

Daily IQ is available to business customers with a CommBank Business Transaction Account. The Industry Sales Comparison, Busiest Times, Total Card Sales, Loyalty, Demographics and Location tools are only available to clients who have a CommBank merchant facility settling into a CommBank settlement account. Contact the NetBank Help Desk on 13 2221, or the CommBiz Help Desk on 13 2339 to find out if you are eligible. The target market for this product can be found within the product’s Target Market Determination.

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. You should consider seeking independent financial advice before making any decision based on this information. The information in this article and any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of its publication but no representation or warranty, either expressed or implied, is made or provided as to the accuracy, reliability or completeness of any statement made in this article.

Commonwealth Bank of Australia ABN 48 123 123 124. AFSL and Australian Credit Licence 234945.


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