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Inside Australian Online Shopping 2017

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Inside Australian Online Shopping 2017 Inside Australian Online Shopping 2017 eCommerce Industry Paper Contents About this paper About this paper 2 Industry overview This Inside Australian Online Shopping report offers insights Department & Variety Stores 13 Contents 2 into the delivery of goods bought Fashion 19 online in 2016 – it’s based on: Foreword 3 Health & Beauty 25 Hobbies & Recreational Goods 31 A subset of Australia Post Executive summary 4 data, collected between Homewares & Appliances 37 January 2015 and December 2016, from across our nation- eCommerce overview 5 Media 43 wide network of 11.5 million delivery points, aggregated What’s making us buy online? 5 Specialty Food & Liquor 49 to postcode level. Consumer trends 5 Methodology & references 55 The state of Australian eCommerce 7 Reported figures Contacts 58 are for the 2016 What are Australian’s buying online? 9 calendar year. YOY Where are Australian’s buying online? 11 figures compare to 2015 calendar year. eCommerce events 12 Inside Australian Online Shopping © Australia Post Foreword The Australian economy has broken a world Together, Australia Post and StarTrack deliver record. We have claimed the title of 104 quarters more than four billion items to 11.5 million of growth without a recession. This achievement addresses across the country annually. Our vast, of long term economic expansion has created a nationwide processing and delivery network has strong retail environment, where demand for a enabled us to deliver the data-driven insights broad range of products at a competitive price contained in this paper. The 2017 report provides has benefited online retailers across the country. an in-depth look at online shopping and delivery trends across Australia; growth patterns and Australian consumers’ expectations around insights on popular products to buy online, convenience, value and choice have driven a where the nation’s top online shoppers live higher proportion of the population to shop and predictions for future growth areas. online more frequently. This is a world where people simply expect to access information, We’ve created this report to act as a powerful products and services, at the touch of a button. tool for you and your business, by aligning eCommerce data and insights with our growing The online shopping industry and transforming economy. continues to grow both domestically + bn and globally. Here in Australia, 4 items delivered we also know that it’s about to be disrupted, and retail as we know it won’t ever look the same. Ben Franzi General Manager, So how do local retailers remain successful in the eCommerce & International 11.5m lead up and during this transition? The second delivery addresses edition of Inside Australian Online Shopping will arm your business with information, data and insights, which are the most powerful asset to ensure you maintain your competitive advantage in the marketplace. Understanding the changing expectations around customer experience and differentiating your business in the market will help keep you ahead of the competition. Inside Australian Online Shopping © Australia Post Executive Summary Ever checked out a product in-store before demographic. But millennials, specifically those heading home to buy it online instead? 25 to 35, now make up a large proportion of the You’re not alone. Our insatiable appetite for population. Growing up with the internet, millennials online shopping continues to grow, with online will heavily influence the future of online shopping. purchases up 11.5% compared to last year. Retailers are evolving quickly to cater for this Australian shoppers are making the switch demographic shift and the expectations that for many reasons – including better prices, come from these savvy shoppers. easier comparisons, more variety and just The Department & Variety Store and Fashion pure convenience. % categories still sit in the top positions. Collectively, 16 Australians already familiar with shopping online they make up more than half of all online purchases are also doing it more frequently. Over the last and both recorded solid growth rates of 7% 12 months, we’ve seen the number of parcels and 17% respectively. The Media category The number of parcels generated by an online transaction increase has seen notable growth this year too, up 23%. generated by an online by an average of 16% per shopper.1 It’s likely The continuing shift from physical bookstores that a major driver of this acceleration has been to online book purchases appear to be the transaction has increased the increased sophistication of online retailers. major driver here. by an average of 16% Businesses are creating strong brand loyalty In terms of the geographic split, metropolitan per shopper and product familiarity, while providing better areas contributed to the majority of growth. And services, improved online experiences, and thanks to strong economic conditions, Victoria more convenient return and delivery options. and New South Wales had the highest rates of Growth in online spending outperformed growth in the country. bricks-and-mortar retail by 6.9 percentage Although buying behaviour has remained points last year. While this is a significant positive, overall growth figures have tapered difference, it’s worth noting that traditional retail when compared to 2015. The online shopping is still a huge industry in Australia, bringing in sector has reached a level of maturity and is $261 billion2 in 2016 compared to online retail’s now widely considered an established channel. $18 billion in physical goods.10 However, the imminent entry of a new player Research shows that over a three month period, into the Australian domestic market is likely 9.7 million Australians shopped online.3 Baby to raise the standard and demand for online boomers still hold the spending power, enjoying shopping. the highest disposable income of any 1 Australia Post Consumer Survey 2016 2 Australian Bureau of Statistics (ABS) Retail Turnover 3 ABS Household Use of Information Technology, 2014-15 10 Online Physical Goods Index is a sub-set of NORSI. NORSI is sourced from NAB and Market Blueprint. NAB and Market Blueprint take Inside Australian Online Shopping © Australia Post no responsibility for the accuracy of the information shown. eCommerce overview What’s making us buy online? Consumer trends Online retailers are a blessing for many So what are we buying? In general, online Are there still barriers to online shopping? Australians – especially those living remotely, shoppers tend to pick up goods based on wants, Research conducted in 2016 shows that many or in areas with limited access to conventional rather than needs. This kind of discretionary of the issues once considered barriers to online bricks-and-mortar stores. Increasingly, customers spending has a range of influences. Two major shopping are becoming less significant.1 are heading online to find their everyday motivations are the broader range of products essentials at better prices, with buyers in remote available and the convenience of shopping where Since buying online often means not seeing regional locations and tourist towns shopping and when it suits best. products until they’re delivered, returns was online the most. cited as the main barrier. Retailers are Retailers who are investing in digital innovations responding with well-defined return options, Similarly, new housing estates make a big and focusing on customer experiences are seeing giving customers more confidence when impact online. As new families move into these their efforts pay off. Shoppers are more informed shopping online. areas, they often head online to furnish their new than ever – with information, reviews, and home. Point Cook in Melbourne’s outer-west is a comparisons at their fingertips – making it crucial Some consumers also cite delivery as a problem prime example. It’s one of the largest-growing for retailers to deliver on their expectations. – since it can be difficult to arrange a home suburbs in Australia, and tops many of the lists Strong returns policies and improved delivery delivery time that’s convenient. Carriers and in this report. options have further encouraged the uptake of retailers are responding by providing alternate online shopping, offering consumers peace of delivery options, including in-store and other mind and convenience. collection points. An increase in tracking notifications has also been well received by consumers, with over two-thirds rating this service either valuable or extremely valuable. Inside Australian Online Shopping © Australia Post Key consumer trends Buying behaviour Consumers are tending to shop online % later in the day, with 29% of purchases 52 made between 7–10pm. A further 18% increase in occur between 2–5pm. purchases YOY via a mobile device % Personalisation 29 Trending devices Demand for personalised of purchases are Online shopping via a mobile products increased by 28.2% made between device is increasing at an in 2016. More and more online 7–10pm impressive rate, up 52% from retailers are offering consumers % 2015. However, most online the ability to co-design and 18 shopping is still done on add personal touches to their desktop or laptop computers. products and this is steadily of purchases are Desktop and laptop purchases increasing. made between 2–5pm have declined at 10% and 6% respectively, while shopping via mobile is building from a low base. 28.2% growth in personalisation Inside Australian Online Shopping © Australia Post The state of 2016 total online spend Australian $21.7bn Total spend on eCommerce physical goods % $17.7bn In 2016, Australian’s spent $21.65 billion shopping online across both physical goods and digital 10.4 services (music and video streaming, and takeaway food services). This is a total increase % spend of 10.4% compared to 2015.4 Spending online on physical goods (excluding digital 10.2 services) rose by 10.2% to $17.7 billion, an 82% share of the total online spend.10 Growth in online spending significantly outperformed traditional retail spending, up 10.2% compared to 3.3%.
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