We live in a lucky country – especially if you’re a business owner. Australia has had 104 quarters of growth without a recession.

It’s also true that over some of those 104 quarters (which is 26 years) things have gotten tight, but when you look overall, we’ve done pretty well.

That’s driven a reasonably strong retail environment – but as we’ve also seen in that time, the way Australians buy products and services is changing. Online shopping has seen massive growth, especially over the last 3-5 years and if a particular product niche hasn’t been disrupted yet, chances are it will be in coming months – especially with the very recent launch of Amazon in Australia.

Yes, Amazon’s offerings might still be a bit clunky – it’s early days. But when you look at the behemoth it’s become in the US and around the world, no doubt, the Australian shopping space is in for a shake up.

Online Shopping Is Not A Fad But Retailers Don’t Have to Worry

Online shopping isn’t a fad and it’s not going away anytime soon. At the moment, when you look at Australia Post and Star Track deliveries combined, they’ve delivered more than 4,000,000,000 (if you’re not good with zeros, that’s 4 billion) items to 11.5 million addresses – that’s about half the nation’s households (not quite, when you factor in post office boxes, etc – but you get the point).

It’s certainly not all been doom and gloom for retailers. Many have made their names on the back of all those quarters of growth. It’s a still a huge chunk of the Australian economy worth $261Billion (whereas online spending for physical goods was only $18B).

However for the first time, growth in online spending in 2016 outperformed growth in bricks and mortar retail by 6.9%. Now that doesn’t mean retailers should shut up shop and call it a day, but it does herald warnings that retailers need to be across.

Online Shopping Shopper Demographics

Shopper demographics are about to very noticeably change. Yes, the baby boomers (currently aged 55+ plus) still hold the majority of Australia’s spending power – they’ve got houses and cash. However, they’re more conservative in their shopping habits, still preferring bricks and mortar stores for the majority of their purchases.

However the youngest members of Generation Y are now out of uni and hitting the workforce in record numbers (almost 40% of Australia’s workforce is GenY). But with housing affordability at all time lows, these guys have cash to spend AND they’ve grown up with the internet – it’s what they know. They ARE the future of online shopping AND they buy differently. So retailers had best be aware of what’s to come.

GenY are savvy shoppers who will shop around for price. But they will also pay what might look like outrageous sums of money for the latest trend or something they ‘just have to have’ if it’s meaningful to them. Hence the days of stocking the same product (or even just a slight variation) that the store down the road stocks are gone. Your product simply must stand out. And it must be designed to stand out on a mobile device (growth of shopping on a mobile is increasing 52% year on year).

GenY are also the ‘instant’ generation. They expect super quick deliveries – no waiting weeks and weeks for deliveries. Savvy sellers will cater to those needs. Swift turnaround is also something that Amazon requires of its sellers too – such is the customer expectation these days. Delivery options, tracking options, extra collection points – these are all things that you need to think about.

Y’s go to the shops for essentials. But online is more about discretionary spending – in other words – it’s their own 24×7 shopping adventure – that can happen where (with 29% of all purchases taking place between 7-10pm) and whenever they’d like it to. Online is where the things of their dreams live. Your site (and your social) need to make it feel like that. And if you can personalise/mass customise their products so much the better with personalisation growing at almost 30%.

And if that ‘dream’ isn’t quite right when it arrives, Yers (actually everyone else too) want a returns process that’s easy. That might mean a reverse shipping solution or something as simple as returning to store (if that’s easy for the customer).

It’s not just fashion and accessories though, that are driving e-tail. As Gen Y move into their own homes or start families (we’re just on the cusp of yet another baby boom), they’re just as likely to furnish their home or fit out their entire nursery based on recommendations from family and friends. Retailers need to think how they can influence those friends and family – brand isn’t just about a great ad campaign or direct marketing any longer.

That should give you some things to seriously think about. Over the coming weeks, we’ll be writing a series on things you can do to exploit these changes in the shopping environment for your benefit – both now and into the future.

If you’re ready to embrace ecommerce in a more meaningful way, we’d be delighted to talk to you. You can always give us a call on +61 2 9828 0111 (Sydney)+61 3 9240 300 (Melbourne) or +64 9 263 8855 (Auckland) or drop us a note via the form below. Alternatively, you can find a full list of available services here.


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