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The Phenomenal Rise of Australian Online Shopping

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Australian eCommerce Outlook 2021

In 2020, eCommerce experienced an abrupt surge of growth due to the COVID-19 pandemic. As consumers avoided crowded areas and risk-laden trips, digital shopping quickly became the de facto shopping method for millions of Australians. But what does this mean for 2021? Will eCommerce continue to accelerate? Is the globalised nature of digital shopping threatening mid-market retailers? And how can your business capitalise on this trend to build resiliency and growth in the coming days, months, years, and decades? Welcome to the future of commerce. There will be winners, losers, and stalemates. But businesses with an eye for trends and a robust marketing playbook can capitalise on eCommerce to drive rapid and long-term growth into their core.

Australian eCommerce Outlook 2021

Despite the already-bullish eCommerce predictions in the Australian retail landscape, no one could have predicted last years’ black swan event. COVID-19 completely changed the dynamics of online shopping — pushing customers to leverage digital tools to secure critical needs like food, clothing, and entertainment. According to KMPG research, eCommerce in Australia experienced five years’ worth of growth in a mere six months. One million new households joined the digital shopping revolution last year, and many more are expected to explore the digital ocean of consumer goods in 2021. In fact, across all of Australia, 82% of households used eCommerce in 2020.

Of course, every country experienced an explosion in digital shopping. So, there’s a tangible sense of concern over the globalisation of eCommerce and its impact on Australia-centric companies. Will the rise of eCommerce shrink local purchasing and push consumers into the grasps of multi-billion-dollar digital Goliaths? Not likely. According to research, 92% of Australian consumers prefer Australian retailers, with 33% admitting they will abandon a purchase altogether if they can only use USD. Furthermore, shipping and logistics concerns (many overseas suppliers’ shipments were delayed for weeks) also turn customers towards local options. Regional and metro eCommerce shopping was up 50% and 60% respectively last year.

Despite lockdown measures, 42% of local retailers admit their revenue increased significantly due to COVID-19 — mainly through eCommerce channels. In other words, eCommerce is booming. And it’s likely to stay this way. A recent report suggested that over 33% of Australians plan to keep their current, digital-centric shopping habits in a post-pandemic environment. Once consumers taste the convenience of online shopping, many make digital their primary purchasing avenue.

Trends in Australian eCommerce

The avalanche of digital commerce won’t be distributed evenly. Companies that leverage the right strategies and methodologies will ride the wave; others will sink. In total, we’ve identified five key strategies that will define 2021’s eCommerce landscape.

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Sustainability

Eighty-eight per cent of Australian’s want to purchase products from companies that emphasise sustainability and ethical practices. And 85 per cent want companies to be more transparent about their products’ sustainability and internal ethics practices. Now is the time to shed those layers of mystery and focus on transparency, ethics, and sustainability. It’s a buyers’ market. When consumers look for goods online, they have nearly unlimited options.

While over a third of Australian businesses describing their current financial situation as “good,” a significant number of companies are struggling to win over customers. If you’re a late digital bloomer, your competitors have a serious advantage. Their commerce store ranks and has recognition. You’re just starting your journey. Ethical practices can help spark growth in the near term, while your agency focuses on the long-term marketing strategy.

Sustainability isn’t only top-of-mind for Australian consumers. Fifty-seven per cent of consumers worldwide are willing to change their shopping habits for environmental reasons, and 81 per cent say sustainability is massively essential. In other words, both your local and global audience craves sustainability. Now is the perfect time for sustainability initiatives and eco-friendly habits.

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Omnichannel Experiences (Click & Collect)

Twenty per cent of leading eCommerce brands believe omnichannel is the single most critical component of eCommerce. Bridging the gap between physical and digital storefronts is crucial for brands looking to both take advantage of this digital boom and keep success at the heart of any existing brick-and-mortar locations they have. So-called “click & collect” services (also called “by online pickup in-store”) allow consumers to access online purchases from a physical location near them. This trend isn’t feasible for eCommerce brands without a physical presence, but it’s a must-have for blended environments. Omnichannel experiences almost always require ERPs, CRMs, and other technology. So, we understand the complexity of omnichannel investments. You have to put forward semi-significant short-term investments for a long, drawn-out gain. But let’s be clear: you don’t invest in omnichannel to gain customers. Failure to adopt click & collect may lead to lost customers. As omnichannel grows, it’s no longer a differentiator: it’s a staple.

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Resiliency

Supply chain frictions highlighted the year. Thirty-four per cent of Australian companies admitted “supply chain issues” caused them significant pain last year. With overseas suppliers sluggishly moving goods, meeting those next-day shipping goals was challenging. Unfortunately, almost 50 per cent of retailers admitted rapid online delivery was a crucial component of success in the digital landscape. The disconnect between understanding customer preferences and delivering rapid-fire services in a pandemic-soaked supply chain certainly caused strife. And we doubt the supply chain will entirely correct itself in 2021. However, there is plenty of opportunity for resiliency-building. Connecting supply chain managers with best-in-class technology (e.g., AI, forecasting, vendor management tools, etc.) is crucial for inventory control, vendor relationships, and overall supply chain health. Across the globe, retailers lose $1.1 trillion in stock-outs and overstocks each year. So, supply chain resiliency is more than simply ensuring the right product is available. You need to minimise overstocks, expirations, and dead stock.

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Branding

Over the past few years, brand value has grown among Australian retailers compared to other industries (e.g., banking, manufacturing, etc.) Household names like Woolworth’s and Coles continue to gain branding traction, but there’s plenty of room for growth for small and mid-market retailers. And the value of branding can’t be understated. Not only does proper branding drive trust, create lukewarm sales conversations, and maximise sales across channels, but successful branding builds the resilience necessary to withstand further crises. For eCommerce brands, content marketing and social media marketing continue to lead the charge in branding investments. When it comes to content, quality, consistency, and volume are essential. Consistent experiences across channels boost bottom-line revenue by 33%, eCommerce brands that post at least 16 blog posts per month see 3.5x more traffic, and high-quality content increases blog traffic by 2,000% compared to low-quality content. For eCommerce brands looking to gain trust and brand power quickly, content marketing should be a significant part of your game plan.

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Social Media Marketing

Seventy-three per cent of Australian eCommerce brands use Facebook, and 62 per cent leverage Instagram. Over the past year, 70 per cent have invested more in these platforms, leading to a hyper-competitive social media landscape. The truth is, social media marketing is standard. Most retailers have dipped their toes into the basics of eCommerce (e.g., digital storefronts, content, social media, click & collect, etc.) The trick is making a meaningful impact in the dense social landscape. A massive ~80% of Australians use social media regularly, and reaching them with impactful content, emotional ads, and purchase-inspiring posts isn’t always easy. This year, we expect eCommerce to rally around social media with tremendous enthusiasm. Brands that are looking to compete for need pitch-perfect strategies and world-class creatives to make a dent.

Are You Ready to Win With eCommerce?

The truth is: digital shopping is here to stay. Savvy companies will capitalise on these trends and build impenetrable towers of long-term growth and resiliency, while others will drown in the ever-changing digital ocean. At Maxemus, we help retailers adapt to the modern digital environment, prepare for upcoming disruptions, and ease the new market pressures. Our team of hyper-experienced digital natives leverage world-class strategies and winning creatives to drive value and growth into your digital storefront.