Understanding Consumer Behavior in the AU Retail Market: Key Drivers of Conversion and Customer Loyalty

Uncover key drivers of conversion and loyalty in Australian retail, from CX and delivery to in-store habits, returns, and shifting consumer behavior.

Retail in Australia has undergone major shifts in the post-pandemic years, but not all of them have followed expectations. While online shopping has grown, it hasn’t entirely replaced the physical retail experience. In fact, many consumers continue to favour in-store shopping for a variety of reasons, such as immediacy and personal service.

At the same time, today’s customers are more selective, informed, and value-conscious. Many have found that their household budgets are under pressure due to economic shifts. As a result, they’re making more deliberate decisions about where, how, and when they buy. This creates new challenges, but also new opportunities, for retailers who can understand and respond to their customer base’s changing behaviours.

A recent Resonate CX market study of ~1000 Australian shoppers in 2025 sheds light on how people are shopping and what influences their decisions. The findings reveal a blend of old and new habits, and underscore the factors that lead shoppers to complete a purchase or remain loyal to a brand. This article explores key behavioural patterns in the Australian retail market, drawing insights from the report Current State of Omni-Channel Retail: Consumer Research Report 2025 ANZ by Resonate CX to help you better align your customer experience strategy.

An Overview of Customer Shopping Patterns and Preferences in the Australian Retail Market

Despite predictions of a digital retail takeover, physical stores continue to play a dominant role in the customer journey. In fact, according to the Resonate CX study, three in five Australians still prefer shopping in-store for non-essential items. (PDF p. 7) They’re also doing it more frequently, with 65% of respondents visiting physical shops weekly compared to just 31% who shop online with the same regularity. (PDF p. 8)

Economic uncertainty has influenced more than just channel preference. Around 74% of consumers surveyed say their shopping habits have changed in the past year (PDF p. 9), with most becoming more cautious. For most, this means reducing non-essential purchases, opting for lower-cost alternatives, and looking for better value overall. The implication for most retailers is that while traditional foot traffic may still be strong, today’s customers will tend to expect more before they can be convinced to part with their money.

What Drives Unplanned Purchases Among In-Store and Online Shoppers in the Australian Retail Market?

Most people’s purse strings may be tighter nowadays, but impulse buying hasn’t disappeared; it’s simply shifting in context. Consumers are nearly twice as likely to make unplanned purchases in-store (23%) compared to online (12%).

 (PDF p. 23)

Several factors lie at the root of this phenomenon. Promotions and limited-time offers are reliable ways to drive impulse buys, but they do cut into retailers’ margins significantly. In physical stores, retailers have the ready opportunity to use emotional and sensory cues, such as layout, product displays, and limited-time offers, which can make a purchase feel more urgent or rewarding. Human-driven factors like mood and curiosity also drive impulse behaviour, especially among younger shoppers and those in higher income brackets. (PDF p. 15) Though these latter factors are ultimately less influential than outright promotions, they’re consistently effective for boosting unplanned spending without compromising profits.

What Customer Experience Factors Impact Conversion and Churn?

In-Store Friction Points

A customer’s decision to buy or walk away often comes down to how easy and reassuring the experience feels. In-store, high prices top the list of reasons for basket abandonment, but they’re closely followed by more controllable issues: difficulty locating products, out-of-stock items, or finding better deals at other stores. (PDF p. 18) These are pain points that can push even motivated buyers to leave empty-handed.

Online Abandonment Triggers

Online shoppers face a different set of friction points. Delivery fees, slow shipping times, and concerns about product quality are common causes of cart abandonment. Notably, 60% of respondents reported that follow-up communication after cart abandonment was ineffective. This suggests that many retailers miss out on recovery opportunities due to unclear or poorly timed messaging. (PDF p. 19)

CX as a Growth Driver

Customer experience (CX) isn’t just about fixing problems; it’s also a lever for growth. The report found that while only 21% of consumers are highly willing to increase their basket size, another 44% fall into a “moderate willingness” group (PDF p. 17). With the right CX touchpoints—such as clear product availability, helpful staff, and transparent pricing—it’s possible for retailers to nudge this group toward greater engagement and higher spend.

How Do Returns Policies Affect the Basket Sizes of Australian Retail Customers?

Returns may seem like a backend process, but they’re more closely tied to purchase decisions than many businesses realise. Four in ten shoppers consider ease of return to be very or extremely important when deciding whether to add extra items to their basket (PDF p. 22). Customers who feel confident about returning any items that don’t work out will feel better about buying more in the first place.

The most valued elements of a return experience are fairly consistent: hassle-free processing (e.g. not requiring original packaging), fast refunds, no hidden fees, and prepaid shipping labels (PDF p. 22). These features signal reliability and build trust, both of which are essential in retaining customers beyond a single transaction.

Why the Delivery Experience Matters for Australian Retail Customers

Delivery is no simple logistical detail in the world of online shopping; in many cases, it’s often a dealbreaker. Poor delivery experiences affect both immediate conversion and loyalty. Even small delays or miscommunications can erode trust, particularly among high-value segments who are already willing to spend more for seamless service.

According to the Resonate CX report, 75% of consumers say they’ll switch to in-store shopping if delivery takes longer than five days (PDF p. 27). This shows just how central speed and convenience have become to contemporary customers’ purchasing decisions.

But speed is only part of the equation. Customers also value transparency and control. Top delivery priorities include cost tracking, accurate updates, safe handling, and flexible delivery windows (PDF p. 28). While click-and-collect options have seen investment, only 16% of customers prefer them (PDF p. 25). Home delivery remains the preferred choice for most shoppers (60%), provided it’s fast, predictable, and clearly communicated (PDF p. 25).

Creating Ideal In-Store Experiences

As the above findings show, physical retail still has unique advantages when done right. Customers who continue to shop in-store do so for reasons digital platforms can’t easily replicate: direct interaction with products, immediate access, hands-on service, and the opportunity to make tangible comparisons (p. 10). Yet even these strengths can be undermined by friction points like unclear layouts, unengaged staff, or limited hours.

When asked to describe their ideal in-store experience, consumers pointed to several standout features. These included more convenient store hours, more deals and promotions, and greater product variety. Loyalty programs are also a major want, but customers are most motivated to engage with those that promise clear benefits (PDF p. 45). When they can easily grasp how the program works and see clear value in participating, they’ll be that much more eager to sign up.

Conclusion: Putting Insight into Action with Forward-Thinking CX Strategy

For CX and retail decision-makers in Australia, these insights reinforce a clear message: conversion and loyalty are two sides of the same coin, both driven by customer experience. A frictionless purchase journey converts shoppers into buyers, and a satisfying overall experience turns those buyers into repeat customers. By focusing on what consumers in the market truly value beyond price – product availability, convenience, responsive service, and feeling valued – retailers can boost immediate sales and cultivate long-term loyalty.

In practice, this means investing in the fundamentals of customer experience. Make it easy for customers to find what they want, whether on a shelf or on a website. Deliver on promises with reliable fulfillment and helpful after-sales support. And show customers you appreciate them, through meaningful rewards or simply by listening and adapting to their feedback. The 2025 consumer is savvy and selective, but also open to forming lasting relationships with brands that consistently meet or exceed their expectations.

Retailers that understand and act on these key drivers of conversion and loyalty will not only see more transactions in the short term, but also stronger customer lifetime value and advocacy in the long run. In a competitive retail market, those who put the customer at the center of their strategy will ultimately win the loyalty that drives sustainable growth.

This blog is based on the 2025 Current State of the Omni-Channel Retail Market Insights Report. Get your copy here.