Lightspeed Blog

The Australian ecommerce divide

Posted by Lamia Lee on Apr 28, 2015

Australia may have been a slow starter in ecommerce, but the pace is definitely picking up. Consumers are regularly buying goods and services via the internet, with 20% of our Australian panellists having made a purchase online in the last 24 hours. And with 79% of Australians using the internet, meaning a massive 18 million consumers are active online across the country. It is no wonder that marketers, businesses and researchers alike are taking notice.

Australia a leading ecommerce nation
Three out of four Australian internet users shop online, with reports showing 15.4 million internet users purchased something over the internet in the 2012-13 financial year.

Growth has been exponential in the past four years, with Australia leading the world in regards to the number of new ecommerce-only businesses opening. Between 2010 and 2012, the rate of new online business launches climbed by 200% .

At the same time, local consumers are increasingly interested in connecting with ecommerce stores via devices other than their personal computer. In fact, mobile ecommerce revenue reached $22 billion in 2014, as 59% of Australian consumers aged 15-65 made at least one online purchase via their smartphone or tablet.

However, the desire to buy online is not felt by everyone. While the number of purchases made online is growing, there are still those who favour tradition.

Online or off?
Despite online purchases growing at around 20-30% each year, the overall retail market share is still only around 5-7%. This means traditional media channels and physical stores are still leading the way in regards to retail, accounting for more than 90% of commerce in Australia.

There are a few key factors that could be influencing the preference for offline shopping. While convenience and prices often drive buyer decisions, 68% of Australian consumers primarily use physical stores as an integral part of the shopping process. For 37% of these respondents, the 'inability to touch and feel a product' is the main issue that discourages them from online shopping.

"With uptake of digital mobile technology, Australian consumers are now 'always on'," PwC's Digital Change leader John Riccio said. "In the not-too-distant future consumers will expect the products they research online to be available in their local store, immediately. Even something as seemingly simple as this requires a significant investment in areas like predictive analytics and smart sourcing."

Tick all that apply
The consumer is across both channels, therefore businesses should hold both with high regard and application. As Harvey Norman’s Gary Wheelhouse explained at the BIA Digital Leader’s Summit last month, it is all about balance. If you build a strong lone experience, this needs to be replicated in-store. Likewise, a brand should understand that the consumers want "humans when you need them, technology when you don’t”. The same customer might use both channels and therefore needs consistency and choice.

Above all, the consumer needs to be understood. When it comes to segmentation and looking at the data held on an audience, great care should be taken in not assigning the customer to one group based on their last activity. This behaviour can be an indicator but a full view is required to understand the full relationship with each customer. It is not a case of which channel but what motivates a purchase across either channel. Without this, brands are at risk of missing a significant chunk of their market.

Topics: Mobile Purchasing, Ecommerce

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