Australia lagging behind in digital, despite being one of the most digitally connected countries in the world

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Monday, 24 November 2014: Forty per cent of consumers believe Australia’s status as a digital nation is less advanced than other developed countries, while only 14% of Australians say we are more advanced.

  • Sixty-seven per cent of Australia’s ‘digital opinion leaders’ claim we are in danger of being left behind due to government policy on digital
  • Australians are ‘addicted’ to their smart devices. Sixty-nine per cent of smartphone users check their device as soon as they wake up in the morning
  • Forty-six per cent say their smartphone/tablet improves their happiness, while one in five say it impacts their sleep
  • Consumers say entertainment, TV, films and media sites offer the best digital experiences, while government and utilities sites rank the worst
  • Privacy around personal data and security rank as top concerns for consumers online
  • Eighty per cent of Australians believe government should force organisations to be more transparent about how they use customer data

The findings were revealed today in EY’s inaugural Digital Australia: State of the Nation 2014 report which surveyed 1,500 consumers and 167 of Australia’s “digital opinion leaders”1. The research, conducted by EY Sweeney2, explored views about Australia’s digital status compared to its global competitors, the best and worst sectors online, smartphone and tablet use and behaviour, and social media.

The digital opinion leaders surveyed for the report believe the picture is even bleaker for Australia, with 59% agreeing we are trailing our global peers. Nearly half cite a lack of investment by organisations in digital as a “major concern” and 67% claim we are in danger of being left behind as a result of government policy on digital.

EY Customer Leader Jenny Young said Australians readily differentiate between good and bad digital experiences and were taking a harder line when assessing organisations online.

“It is widely accepted that we’re in an era where the consumer has ultimate power. This is especially true in the digital world. Consumer demand is driving fierce competition and innovation while at the same time clever technologies and media platforms are changing the way consumers behave,” Ms Young said.

“While it is true we are a nation of fast adopters, it is not about digital for digital’s sake. Our digital interactions aren’t just about jumping on the latest platform or buying the latest technology. Australians view digital technologies and channels as a means to claw back control and make life easier and more enjoyable.

“When organisations begin to really understand consumer motivations and how they differ across the Australian population and per segment, then they can move past generic experiences to really engaging with their market, and begin converting those who research online to those who buy online – regularly,” Ms Young said.

The research identified seven different consumer segments represented in the Australian population, based on digital use and behaviour. They have been grouped based on each segment’s major attributes and defining characteristics, and range from youngest to oldest: Natives (female 57%), Lifestylers (male 66%), Inadvertents (male 70%), Cruisers (female 58%),  Connectors (female 65), Workaholics (male 79%), and Drifters (female 57%).

Smart devices impact
The report found that Australians’ relationships with their smartphone or tablet are largely positive, and the devices are valued most for the benefits they bring to their personal lives:

  • 46% say their mobile device has a positive impact on their personal happiness
  • 40% say their smartphone has a positive influence on their work productivity
  • Almost two out of five say smartphones have a positive impact on their ‘sense of belonging’ and half believe they help them feel ‘in control’
  • 64% admit they are multi-tasking while using their smartphone or tablet
  • Just over half claim smartphones have improved their ability to complete personal tasks and errands more efficiently
  • Three-quarters say search engines such as Google are ‘an important part of their lives’

However, Australians could be perceived as being ‘addicted’ to their smartphones with one in five saying it negatively impacts their sleep - this figure doubles for younger people aged between 18 and 24. A fifth of Australians also admit they spend more time on their smartphone or tablet than they do talking with their partner or friends. This rises to almost one in three for males aged between 25 and 34.

“Australians have a love-hate relationship with their smartphone. They appreciate the convenience and control it brings to their lives both personally and at work as they can be connected ‘anywhere-anytime’. But this can create a ‘paradox of connection’ that can actually make them feel disconnected to the real world,” Ms Young said.

“While multi-tasking is hailed as a benefit, it’s a phenomenon of constant disruption combined with a ‘fear of missing out’. This is likely why smartphones offer a ‘do not disturb’ mode to provide a time-out for people who need a break from the digital overload.

“Organisations need to consider the context within which people are engaging with them via their smartphone as it’s unlikely to be their sole focus,” Ms Young said.

Ms Young said social media is one of the likely causes of many people’s ‘addictions’ as it represented one of the most popular online activities, with 69% of Australians accessing various social media platforms at least once a week. Sixty per cent also admitted they check social media at work. Facebook remains the number one platform.

Sector vs sector
The research revealed significant differences between where consumers and digital opinion leaders ranked each sector based on the quality of their digital experiences.

EY Technology, Media & Entertainment and Telecommunications Leader David McGregor said the research showed consumers believe that entertainment and TV, films and media sites offer the best digital experiences, while digital opinion leaders claim the travel industry and financial services lead the way. Both groups agreed that government, utilities and gambling are currently providing the least positive online experiences.

“This is a pressing issue for government. Citizens expect the same, if not better, online experiences than the private sector when dealing with government agencies. Governments need to better understand citizen needs and behaviours to be able to optimise delivery channels and provide the experience that Australians now expect,” Mr McGregor said.

Customer experience online
Mr McGregor said when asked about their ‘poor experiences’ online, the most common problem consumers cited was that sites were not intuitive or user-friendly.

Similarly, ‘ease-of-use’ ranked as the second ‘most important factor’ for consumers when interacting online behind ‘safety and security’ which was the clear number one. Sixty-one per cent of Australians are concerned about organisations accessing details about their behaviour online and 65% are worried about what personal information organisations can access.

“High profile global security breaches and ongoing public debate around the use of customer data have clearly pushed privacy and security to the front of consumers’ minds. In fact, the vast majority of Australians - 80 per cent - believe the government should force organisations to be more transparent about the data they use,” Mr McGregor said.

Smart devices at work
Mr McGregor said given the proliferation of smartphones would continue and people would increasingly use their devices at work, organisations needed to not only manage the associated risks but begin actively leveraging the benefits.

“It seems an obvious next step seeing the impact smart devices have in our personal lives that they be progressively integrated into business processes. Despite this, Australian businesses have been generally slow to embrace the opportunities smartphones have on offer.

“The connectivity, mobility and flexibility gains that become available for organisations and their people when they can access systems, databases or other professional applications via mobile devices in real time have the potential to transform business for this age,” Mr McGregor said.

“Organisations that seize this opportunity now will reap the rewards of a digitally connected, high-performing and engaged workforce – and avoid falling behind others who go first.”

The role of government and industry
Ms Young said the research clearly pointed to two key areas where the digital economy in Australia required swift action:

  • Addressing and moving beyond ‘business-as-usual’ online experiences, and,
  • Driving stronger and more competitive market conditions for consumers and business.

Ms Young said the research confirmed the National Broadband Network (NBN) had broad support from Australians as well as digital opinion leaders.

“Australians want their government to get involved in issues of data privacy, and to continue building infrastructure such as the NBN. But having the right infrastructure is a foundation step in securing Australia’s digital future and should not be seen as the panacea.

“We need to fast-track work already being done to improve online cost, speed and access. Government has a critical role to play in driving new policy and investment, and creating a national culture of innovation. But the onus is also on industry to drive competition and innovation - while elevating customer experience in digital,” Ms Young said.

Mr McGregor said: “For Australian businesses who aren’t nimble enough to respond to a rapidly-changing consumer reality, significant transformation is needed now for their business models to be able to flex and adapt.

“Digital should be part of a seamless multi-channel offering to meet customers’ anytime, anywhere demands, and firmly integrated into business strategy.

“The good news is that the transition is underway for many organisations, but there is hard work ahead for both industry and government if we are to shift the needle for Australia and become one of the top ten digital nations in the world,” Mr McGregor added.

The Digital Australia: State of the Nation 2014 report comprises: primary research including consumer and digital opinion leader quantitative surveys conducted in October 2014, a series of in-depth interviews with some of Australia’s top digital decision-makers, and an aggregate research report of digital data published over the past three years.

For a copy of the report, the aggregate research report and to view all the data from the primary research, available in filterable tables, visit EY’s interactive online portal at digitalaustralia.ey.com

Fast facts – The Australian Digital Nation at a glance
Australia vs Global:

  • Australia is ranked just 18th in developed nations for “network readiness” by the World Economic Forum3. However, when it comes to affordability for digital access, Australia’s ranking plummets to 49th in the world4.
  • Australia is still outside the top 20 when considering the business and innovation environment, coming in at number 21 globally5.

Internet – access and use

  • Australia has the world’s seventh-highest internet penetration at 81%6.
  • More than a third of Australians download movies or TV shows from the Internet.

Smart devices:

  • In 2014, Australians are more likely to use a smartphone than a laptop, and more likely to use a laptop than a desktop.
  • Apple was the number one smartphone brand for people in households with an annual income of more than $120,000. But only 37% of people with an annual household income under $60,000 chose Apple.
  • Apple retains a lead in tablets. However tablet use is less widespread than smartphone use, currently at about half the Australian population7.
  • 44% cent of smartphone users only use between one to five apps regularly (other than phone, messages and mail apps).
  • 37% of people agree that they struggle to keep up with the rapid increase in digital device capabilities.
  • 67% of 18-24 year olds admit to using their phone in the toilet. This falls to 18% among 55 to 64 year olds and just 9% among 65 to 69 year olds.
  • A fifth of Australians with smartphones and tablets admit they spend more time on their device than talking with their partner or friends. NSW respondents were significantly more likely to agree that their social lives would be non-existent without a smartphone or tablet (23% vs. 16% for the rest of Australia).
  • Smartphones are the number one device for accessing social media, followed closely by laptops. This represents a clear distinction between smartphones and laptops / desktop computers from other devices which are used more for web browsing, online banking and work purposes.

Digital at work

  • On average, 18% of smartphone usage occurs at work, with 77% occurring at home.
  • Of those who go online for work or business purposes, 43% do so on their smartphone.
  • 93% of Australians personally own their smartphone, and just 7% have it supplied by their employer.
  • 25% of regional Australians said smartphones and tablets made them more productive at work, compared to 36% of metropolitan residents.
  • Six in 10 admit they check social media at work and 74% say they use digital devices for personal tasks at work.

Social media

  • Facebook remains the number one social media site.
  • 85% of Australians have used Facebook and 62% access it daily.  Research suggests Australians spend eight hours on Facebook per month, far more than more popular websites like Google8.
  • Nearly two-thirds of people are using Facebook the same amount or more often, 15% have never used it, and 19% have quit or are using it less often.
  • 68% of women use Facebook daily, compared to 57% of men.
  • Twitter is less popular among Australians surveyed but has greater growth potential. More users have cut their usage or quit than are using it more frequently. 6% are using more frequently, 12% are using about the same amount or more often, 9% are using it less frequently or have stopped, while 64% weren’t using it 12 months ago or had never heard of it.
  • Professional social network LinkedIn exhibits similar but less patronage. 9% use it more frequently, 16% use it about the same amount, 10% less frequently, 6% have stopped using it while 58% weren’t using it 12 months ago or had never heard of it.

Privacy and Security

  • Many consumers are worried about their privacy and security with 61% concerned about what digital behaviour organisations can access and 65% worried about their available personal information.
  • Concerns about online privacy and data security are strongest in the youngest (18-24) and oldest demographics (aged 65-69), while 25-34 year olds are the least worried about who accesses their information.

E-commerce

  • Consumers aged 18-39 are most likely to purchase online, and men are only two per cent more likely to buy online than women (79 per cent versus 77 per cent).
  • 53% of digital opinion leaders believe consumers prefer to buy online than in a physical store while only 35% of consumers would choose online over other ways of shopping.

Government and NBN

  • Only 33% of Australians want the government to take an active role in monitoring online activity, while only 12% of the digital opinion leaders surveyed agree. 33% of consumers oppose government becoming involved and the vast majority of digital opinion leaders (69%) are against it.
  • Australians are fans of the NBN. Far more agree than disagree that it will ensure Australia has a world class digital economy.
  • More than 80% of digital opinion leaders and 61% of consumers support the NBN, While only 9% of digital opinion leaders and 6% of consumers oppose the NBN.
  • Of the consumers who have been connected to the NBN, 89% say it meets or exceeds their expectations. However, 23% of Australians report being unaware if the NBN was available in their area.

About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

This news release has been issued by Ernst & Young Australia, a member firm of Ernst & Young Global Limited.

Liability limited by a scheme approved under Professional Standards Legislation.


1. The ‘Digital Opinion Leaders’ identified in this survey were self-selected after being invited to participate in the survey by EY and AIMIA (The Digital Industry Association of Australia). They met specific criteria including being in senior management and directly responsible for digital strategy in their organisations, and represent leaders from both the private and public sectors.
2. Sweeney Research was acquired by EY in October 2014.
3. World Economic Forum – The Global Technology Forum 2014
4. World Economic Forum – The Global Technology Forum 2014
5. World Economic Forum – The Global Technology Forum 2014
6. A US Census Bureau, Internet World Stat, CNNIC – January 2014
7. NB: This research does not specifically include data on the iPod Touch which may alter the operating platform results. Some consumers for the purposes of this study may have defined the iPod Touch as a small tablet.
8. The Australian Online Landscape Review, Nielsen February 2014

Contact

Katherine Rellos
Ernst & Young Australia
03 9288 8322 / 0411 245 099

Katherine Meier
Ernst & Young Australia
03 9655 2620 / 0417 859 323