Retailers should arm themselves with data about customers’ shopping habits to stay ahead in a competitive landscape and survive the next wave of market disruption.
That’s the view of Australia Post’s General Manager of eCommerce & International, Ben Franzi.
“Here in Australia we know the online shopping industry is about to be disrupted, and retail as we know it won’t ever look the same,” Franzi said.
Franzi’s comments accompany the release of Australia Post’s second annual Inside Australian Online Shopping Report – an overview of eCommerce in Australia. Identifying who is buying what and where online, the report aims to help retailers understand their existing and potential customers better, so they can create more targeted offers.
The report, which draws on all of Australia Post and StarTrack’s customer and delivery data, showed online shopping sales are up 11.5 per cent in 2016 compared with 2015, outperforming traditional retail spending, which grew 3.3 per cent.
According to the NAB Online Retail Index, Australians spent a total of $21.7 billion online in 2016.
In 2016, domestic retailers accounted for 79 per cent of the total online spend, showing a growth rate of 11 per cent, compared to 7.3 per cent for international spend, according to figures from NAB’s number crunchers.
Wants over needs
Shoppers are more inclined to buy goods they want online, rather than things they actually need. Just think about the last thing you bought online.
Fashion and department/variety store items are the two largest categories, accounting for more than half of all online sales.
Demand for personalised of semi-customised products increased by 28 per cent in 2016, as more retailers are allowing consumers to co-design their products.
“Price, range and convenience are the three main reasons why consumers shop online, and why growth rates remain strong,” Franzi said.
“Almost one third of all online purchases were made from 7pm-10pm, while 18 per cent were made from 2pm-5pm. Australians are increasingly using their smartphones to shop online, with purchases made from a mobile device growing 52 per cent.”
However, most online shopping is still done on desktop or laptop computers. Desktop and laptop purchases have declined at 10 per cent and 6 per cent respectively, while shopping via mobile is building from a low base.
Christmas remains the most important sales period for Australian online retailers – with the December 19 the busiest day for parcel deliveries. However online sales events also gave retailers a boost in May and November.
In 2016, May showed the greatest annual growth, fuelled by Australian events such as Mayhem and the Vogue and GQ online shopping nights.
November experienced the second highest growth rate thanks to Australian retailers successfully leveraging overseas shopping events such as Black Friday and Cyber Monday.
Online shopping hot spots
Point Cook in Victoria was the Number one buying location for the second consecutive year, reporting 13.2 per cent growth, followed by Toowoomba in Queensland (7.6 per cent growth) and Liverpool in NSW (15 per cent growth).
Top 10 online shopping buying locations and per cent growth:
- Point Cook, +13.2 per cent
- Toowoomba, +7.6 per cent
- Liverpool, +15 per cent
- Gosford +12.8 per cent
- Cranbourne, +17.6 per cent
- Hoppers Crossing, +16.8 per cent
- Mackay, +1.7 per cent
- Mandurah, +4.8 per cent
- Baulkham Hills, +21.1 per cent
- Campbelltown, +13.7 per cent