Home Strategy Aussies increasingly turn away from retail stores to online shopping: report

Aussies increasingly turn away from retail stores to online shopping: report

Australians are turning to online shopping after disappointing experiences with bricks and mortar stores and the inability to find a product while shopping instore, according to a new study.

The study by global IT services company Pitney Bowes reveals that 72% of Australian shoppers were unable to find the product they wanted, with 19% then ordering the item online at home, while 21% turned to an alternative retailer or online retailer.

And the report still has Australian shoppers leading the world in cross-border online shopping (by percentage), although the strong influence of shipping and delivery options is now changing the way Australians make online purchases domestically and from retailers around the world.

According to the report, an overwhelming 82% of Australian shoppers revealed they prefer free shipping with a longer delivery time, as opposed to shipping at a cost with shorter delivery time (18%).

And the study identified the top three reasons for Australians shopping online cross-border were price (64%), selection (42%) and quality (24%).

Only equal to Hong Kong, 88% of Australians purchased products from retailers in a different country within the last year, almost double the percentage of United States shoppers at 47%.

Pitney Bowes says, however, that while many Australians are shopping online, nearly half (40%) have experienced challenges with their online orders during the holidays.

Top challenges with online orders in Australia included shipping tracking inaccuracies, which rose to 12% from 7% last year; and having items shipped to the wrong address or lost in mail which doubled to 8%, from 4% last year.

“Australian shoppers have an entire global marketplace at their fingertips. The demand for a seamless customer experience means customers expect that there is always a way to get the product they want, shipped wherever they want, whenever they want it. This creates both opportunities and challenges for retailers,” said Lila Snyder, executive vice-president and president, Global Ecommerce and Presort Services, Pitney Bowes.  

“With even more purchases expected to be online this holiday shopping season, retailers need to double-down on the elements of the consumer experience that matter most – delivery, returns, tracking and world-class customer service.”

And here’s Pitney Bowes’ snapshot of other key Australian retail trends:  

How Australian customers research and shopping is changing

  • Australian shoppers are turning to marketplaces more frequently.  This year, 52% of Australians polled looked at a marketplace for research compared to only 41% last year. And 50% say they look at retail websites directly for new products, down 2% from last year.
  • When it comes to buying online, domestic retailers still dominate in Australia. Fifty-five percent of purchases were made directly from retailers and 45% from marketplaces, a 3% point increase for marketplaces over last year.

 Shipping and delivery options are critical to online shoppers

  • While the majority of shoppers said they prefer free shipping to fast delivery, 64% of Australian online shoppers are using click and collect--ordering online and picking up in-store.
  • Nearly half of Australians (48%) have their purchases shipped to a location other than their home, such as a workplace or parcel locker.
  • Even during cross-border transactions, Australians are encouraged to buy from retailers who offer tracking of purchases and packages (42%) and local delivery options (32%).

According to Pitney Bowes, all this shopping is fuelling a boom in global parcel volumes. Parcel volumes in Australia grew by 13% from 2015-2016 year-on-year and it is projected that the Australian parcel market will grow to more than 1 billion parcels a year in 2021. That’s estimated growth of between 9% and 12% from 2017 to 2021 (CAGR).

Paul Greenberg, the founder of the NORA Network and strategic adviser to Pitney Bowes Global Ecommerce in Australia, says local retailers need this kind of data to strengthen their global brand.

“The Pitney Bowes Global Online Shopping Study shows the tremendous opportunity ahead for Australian retailers looking to embrace global shoppers. Australian retailers need to go global. The opportunity is here and now, and so are the increasingly valuable shipping solutions needed to be successful,” Greenberg said.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).