Inside Australian Online Shopping - 2017 eCommerce Industry Paper - Online shopping trends in Australia
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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 +4bn 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 and globally. Here in Australia, items delivered we also know that it’s about to be 11.5m disrupted, and retail as we know it Ben Franzi won’t ever look the same. General Manager, So how do local retailers remain successful in the eCommerce & International 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. 16 % easier comparisons, more variety and just The Department & Variety Store and Fashion pure convenience. categories still sit in the top positions. Collectively, 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 ustralia Post Consumer Survey 2016 A 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 made between 7–10pm. A further 18% 52 % increase in occur between 2–5pm. purchases YOY via a mobile device Personalisation Demand for personalised 29 % of purchases are Trending devices Online shopping via a mobile products increased by 28.2% made between device is increasing at an 18 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 shopping is still done on add personal touches to their desktop or laptop computers. products and this is steadily of purchases are made between Desktop and laptop purchases increasing. 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 In 2016, Australian’s spent $21.65 billion shopping online across both physical goods and digital 10.4 % $17.7bn 10.2 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 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%. 21 Despite international access, domestic purchases % still make up the majority of online spending in Australia. At the end of 2016, domestic spend Spend on represented 79% of the online market, showing International a growth rate of 11% compared to 7.3% for products international spend.10 7.3% 79 % Spend on domestic Share of products Australia’s online 4 ll Online Retail statistics are sourced from the NAB Online Retail Sales Index A spend 11% (NORSI). 10 Online Physical Goods Index is a sub-set of NORSI. NORSI is sourced from NAB and Market Blueprint. NAB and Market Blueprint take no responsibility for the accuracy of the information shown. Inside Australian Online Shopping © Australia Post
Online physical goods trends National average 12.1% The bulk of spending in Australia 11.5% comes from the eastern seaboard 10.7% – with over three quarters of online 9.6% 8.8 % purchases made in New South Wales, Victoria or Queensland.4 6.8% While every state slowed in growth in 2016 compared to previous year, better economic conditions in New South Wales, ACT and Victoria helped these states secure their places as the Metro vs top three players for online shopping growth. regional growth Overall, metropolitan growth was stronger VERY REMOTE OUTER INNER MAJOR than regional. That said, the very remote REMOTE REGIONAL REGIONAL CITIES regions of Australia – such as Nhulunbuy (NT) and Onslow (WA) – almost doubled in growth compared to the previous year. 13.8% 13.4% 13.2% National average 11.0% 11.5% 9.8% 9.7% 8.6% 4.6% Growth by state NSW ACT VIC TAS QLD SA NT WA 4 ll Online Retail statistics are sourced A from the NAB Online Retail Sales Index (NORSI). Inside Australian Online Shopping © Australia Post
What are Australians buying online? Department & Variety Store items are the most popular purchases, accounting for 30% of all online purchases in Australia – followed closely Online purchasing by Fashion at 22%. growth rate 22.9% In terms of growth, Media takes out the top position, up by an impressive 23% in 2016. Fashion trails at 17%, followed by Health & Beauty and Hobbies & Recreational Goods, 16.7% 15.6% both up 16%. National 15.5% average Although buying behaviour has remained positive across most categories, this year’s 11.5% overall growth figures are more modest than in previous years. 7.0% 6.9% Flat Department Fashion Homewares Media Health Specialty Hobbies & & Variety & Appliances & Beauty Food & Liquor Recreational Stores Goods Share of online purchases 30.1% 22.2% 14.8% 12.9% 8.7% 6.1% 5.2% Inside Australian Online Shopping © Australia Post
Department & Fashion Health & Beauty Hobbies & Variety Stores Fashion continues to be one of Health & Beauty saw rapid Recreational Goods the major influencers in online growth in 2015, coming in with Department & Variety Stores The Hobbies & Recreational shopping, accounting for over an extraordinary 50% increase. experienced a higher growth rate Goods category covers an one in five online purchases in However, in 2016 we’ve seen this in 2016 than the previous year. extensive range of items – Australia last year. It’s the second growth start to stabilise. Regional More businesses are expanding including Games & Toys, biggest online category – growth residents are adopting online their product offers online and Automotive, Music and Outdoor in 2016 was 16.7%, just above channels for Health & Beauty migrating to digital channels. equipment. Games & Toys and previous year’s rate, marking purchases at the same rate as Those with limited access to Outdoor goods make up over half a third consecutive year of their city-based counterparts, conventional stores are of all purchases in the category. runaway growth. with regional growth sitting on increasingly shopping online. Looking to the future, Music par with metropolitan growth. This category was more popular Metropolitan shoppers purchased (instruments and accessories) regionally, up 8% compared to nearly 19% more fashion items will likely be the next sector to 7% overall. Over 60% of online online than they did the year see a major shift from bricks- purchases in this category come before, with growth peaking in and-mortar to online stores. from pure play online retailers. November and May, at 38% and 29% respectively. Their regional Specialty counterparts only saw an increase of 11% this year. Food & Liquor Specialty Food & Liquor – including Homewares wine, tea, specialty food, liquor, & Appliances hampers, unperishable groceries and coffee – accounted for 6.1% Metro growth was also higher than regional in the Homewares Media of all online purchases, but overall growth was flat when compared & Appliances sector, up 9.2% Books account for over 80% of to 2015. A major contributor to compared to 1.5% regionally. online Media purchases in the this slowdown was a significant New residential development category. The worldwide shift reduction in spend coming from has contributed to these figures, from physical bookstores to WA, reflecting the economic with homemakers shopping online retailers has made Media conditions locally. online to furnish their homes. the fastest growing category Demand in this category spiked this year, up an impressive 23%. in the warmer months, with January and February recording the largest year-on-year growth. Inside Australian Online Shopping © Australia Post
7 Rank Top buying locations Growth rate (%) 1 Point Cook, 3030 13.2 2 Toowoomba, 4350 7.6 3 Liverpool, 2170 15.0 4 Gosford, 2250 12.8 5 Cranbourne, 3977 17.6 6 Hoppers Crossing, 3029 16.8 2 7 Mackay, 4740 1.7 8 Mandurah, 6210 4.8 9 Baulkham Hills, 2153 21.1 10 Campbelltown, 2560 13.7 8 4 9 3 10 Where are Toowoomba, west of Brisbane, has come in runner up once again. As the second most Australians populous inland city, with a high concentration of households, it’s not surprising the town continues 6 buying online? to rank in the top three. Shoppers here are going online to access a wider range of products and for better value. 1 5 For the second year running, Point Cook in Victoria has topped the nation for online shopping Liverpool in Sydney’s west has also retained its – coming in ahead of Toowoomba in Queensland, position at third on the list – this area is also the Liverpool and Gosford in NSW. Limited access online Fashion capital of Australia. Liverpool has to physical shopping options in Point Cook and seen substantial growth in recent years, and it other regional areas is driving residents in these appears residents are looking online for value top buying locations to go online instead. and convenience. Above average Seven of the top ten postcodes recorded above Baulkham Hills in Sydney’s north-west was growth average growth, fuelled by the influx of young the fastest-growing suburb in the top ten, with Lower than families moving into the suburbs looking for more online purchases up 21% year-on-year. New average growth affordable housing. high-density zoning in the area has stimulated population growth and the online sales to match. Inside Australian Online Shopping © Australia Post
eCommerce Christmas highlights Events As expected, the Christmas period saw online shopping hit its peak. Extended delivery hours, 11% more vehicles Each year we see a strong correlation 2.2m on the road and more notifications via SMS and email between online shopping events and all supported the online shopping boom. buying behaviour. In 2016, May showed parcels the greatest annual growth – domestic delivered on Growth in 19 Dec 2016 events such as Mayhem and the Vogue 5.6m parcels and GQ online shopping nights. Merry Monday 13 November saw the second highest parcels from growth rates, with Australian retailers leveraging overseas shopping events % overseas 19 Dec 2016 The last Monday before such as US Black Friday and Cyber Christmas is typically the Monday sales. While consumers are making the most 34m domestic parcel 50% busiest day of the year for online shopping deliveries. In 2016, there was a 12% deliveries growth YOY in of both international and domestic parcel locker growth in parcels. promotions, Christmas remains the usage largest shopping event in Australia – and December the biggest buying month. Ahead of the game The Games & Toys sector sees a huge spike Games & Toys in the lead up to Christmas, with 41% of its share of online annual online purchases occurring across purchases Oct – Dec October, November and December (up 3% from the previous year). December is the 41 largest buying month for all online shopping % categories in Australia. Inside Australian Online Shopping © Australia Post
Department & Variety Stores Inside Australian Online Shopping © Australia Post
Department & Variety Stores The Department & Variety Stores category Online purchases again took out top place in online shopping, growth rate accounting for 30.1% of all online purchases. Year-on-year growth at 7% was strong, but more modest than other online categories. 7.9% 7.0 % Within the category, fashion apparel is the most popular purchase, making up the majority of sales.1 6.6% Share of online Traditional retailers still have purchases some work to do to win over the online market, with over 60% of Metro vs 30.1 sales coming from pure play regional online retailers. % growth Regional Australians are going online for their METRO REGIONAL Department & Variety Store goods slightly more than their city counterparts, with regional growth exceeding metropolitan growth by 1.3 percentage points (inner and outer regional Australia6 grew by 8%). 9.8% Online retailers are starting to remove online 8.8% shopping barriers by providing easier returns, 8.3% more delivery choices and better tracking National 7.3% 6.1% Average notifications.1 7.0 % All the eastern states, with the exception of Queensland, performed above the national 3.7 % average. 2.8% Growth 0.8% by state ACT NSW VIC TAS QLD SA NT WA Inside Australian Online Shopping © Australia Post
Within the top ten performing postcodes Top buying for Department & Variety Store purchases, locations seven were strongly influenced by growing populations – recording above-average growth rates in the category. Point Cook in Melbourne’s outer-west (one of the largest-growing suburb in Australia) has secured the top spot for online purchases. Limited access to physical shopping options in the area continues to drive online demand 4 across all categories. Liverpool in New South Wales came in a close second, with an above-average growth rate of 7.9%. With large developments and new infrastructure going into the area, it’s in a prime position for online buying growth. Another key 10 9 7 driver of online sales is the number of young 8 5 families settling in – over 53% of households 2 in the area are home to couples with children (compared to the national average of 44.6%). With fashion apparel making up 3 Rank Top buying locations Growth rate (%) the majority of sales, capturing 1 Point Cook, 3030 6.8 1 6 the attention of young Australians 2 Liverpool, 2170 7.9 is key in this category. Interestingly, 3 Hoppers Crossing, 3029 9.3 more than 54% of the youth segment have a favourite website that they’d 4 Toowoomba, 4350 -0.6 promote to others1 – so targeting 5 Wentworthville, 2145 8.8 this segment is a good approach 6 Cranbourne, 3977 8.9 for online retailers. 7 Campbelltown, 2560 9.6 Above Further north, Baulkham Hills tells a similar 8 Gosford, 2250 10.5 average story. In ninth position, the area had an growth impressive growth rate of 14.6% – more than 9 Baulkham Hills, 2153 14.6 Lower than double the national average. Supported by a 10 Mandurah, 6210 0.6 average boost in apartment living, and plans for a new growth train station, Baulkham Hills is in a great position to perform online across multiple categories. Inside Australian Online Shopping © Australia Post
Homes in Nairne, 40km south-east of Adelaide, Top buyers are big online shoppers too, receiving 17.9 by household parcels per calendar year (four times the national average). The area has a relatively National average 4.4 Parcels per household young demographic, with over 30% of the population under the age of 20 (compared Nairne to the national average of 26%). This youthful 5252 17.9 population has contributed to an online shopping growth rate of 15.1%, mainly from Tom Price discount online-only sites, influenced by 6751 14.2 television advertising here. Ceduna Nairne 5690 14.1 5252 Streaky Bay 5680 13.3 Crace 2911 12.7 The mining town of Tom Price in Western Australia’s Pilbara region receives an average of 14.2 parcels per household each year. The In 2016, Australian households purchased an It appears Crace’s new locals are population here is skewed towards males average of 4.4 parcels each in the Department & Variety Store category. heading online to save, with purchases (65.2% compared to the national average of in the area predominantly coming 49.4%), and the median household income is As in other categories, regional towns saw higher 2.2 times higher than the Australian average. from discount online-only sites. Being fairly isolated, the town is a high performer rates of online sales on a per-household basis. online, as locals turn to the internet for their Crace, located just 12km north of Canberra, everyday essentials. was one exception in 2016. Households here Households made received at least one parcel per month, double an average of Tom Price the national average. The suburb has been 4.4 Department 6751 through a major transformation over recent & Variety Store years, with new streets and homes being built at a rapid rate (there’s been a four-fold increase purchases last year. 4.4 in houses since the 2011 census). Inside Australian Online Shopping © Australia Post
Top growth Rouse Hill locations Schofields The Ponds At a state level, New South Wales and Victoria are Australia’s top growth performers, with purchases up 8.8% and 8.3% respectively. Both states have key growth pockets contributing Wollert Doreen to this increase. In New South Wales, the neighbouring areas of Schofields, Rouse Hill and The Ponds each recorded an online growth South rate over two times the national average. Morang The Ponds has a history of high growth across several categories, and continued to see an increase in 2016, with 25.7% growth in the category. Nearby Schofields has grown by Top growth locations Growth rate (%) nearly eight times the average at 54.4%, while Rouse Hill has grown by a more modest 14.5%. Schofields, 2762 54.4 The Hills District, These areas are all popular with young families. Sydney Couples with children make up 66% of the The Ponds, 2769 25.7 population of Rouse Hill, the largest of the Rouse Hill, 2155 14.5 three suburbs, compared with the national average of 44.6%. South Morang, Doreen and Wollert sit in Victoria’s City of Whittlesea, Wollert, 3750 48.9 Melbourne northern corridor. While growth in South Morang has been stable, Wollert and Doreen have seen Doreen, 3754 21.8 major urban developments that have contributed South Morang, 3752 5.3 to an online shopping boom. The number of homes in Wollert and Doreen has nearly tripled since the 2011 Census, generating steady growth for online shopping. Inside Australian Online Shopping © Australia Post
Future growth 7.5 Edmondson Park Clyde Edmondson Camden North Average household Park 3978 purchase rate 2174 Clyde North Officer In Victoria’s south-east growth corridor, Edmondson Park is a major land release the areas of Clyde North (47km from the CBD) area, 45km south-west of Sydney’s CBD. and Officer (54km from the CBD) have also The area has a new railway station, and sparked our interest. Both have experienced is expected to see significant development high rates of online shopping, and are under in the near future. major residential development – suggesting Camden is 20km further south, and like these numbers are set to rise. The area lacks Our top picks for future a range of shopping options, spurring residents Edmondson Park, has had consistent online shopping growth and an above-average growth are Clyde North and to head online for their Department & Variety household purchase rate – a trend that’s Store items. Officer in Victoria. And from expected to continue. NSW, the areas of Edmondson Officer also has access to the NBN service, creating even better online experience. Park and Camden are the ones to watch for future online growth in the category. Inside Australian Online Shopping © Australia Post
Fashion Inside Australian Online Shopping © Australia Post
Fashion Fashion continues to be one of the major Online purchases influencers in online shopping, accounting for growth rate over one in five online purchases in Australia. 18.9% It’s the second biggest online category behind Department & Variety Stores. Growth in 2016 16.7 % was 16.7%, just above previous year’s rate, marking a third consecutive year of significant growth. Share of online 10.7% Consumers are more comfortable purchases than ever buying online; footwear, fashion accessories and activewear Metro vs 22.2 items, in particular, are increasing regional in popularity. % growth While there was growth across the category, METRO REGIONAL footwear (32% growth), fashion accessories (18.7%) and activewear (17.4%) showed the biggest improvements. Australian metropolitan areas are leading the 21.1% way – up 18.9% on the previous year, nearly double that of regional areas (10.7%). 18.1% 18.1% With the exception of Western Australia, all National average 15.0% states recorded double digit growth. Growth 16.7 % 12.9% 12.8% was particularly strong in NSW, up 21.1%, with 11.8% ACT and VIC both up 18.1%. 7.1% Growth by state NSW VIC ACT SA TAS NT QLD WA Inside Australian Online Shopping © Australia Post
3 Top buying Rank Top buying locations Growth rate (%) locations 1 Liverpool, 2170 27.2 2 Point Cook, 3030 17.0 3 Toowoomba, 4350 9.5 4 Baulkham Hills, 2153 28.4 5 5 Rouse Hill, 2155 31.3 1 4 6 Wentworthville, 2145 29.6 6 7 Ballarat, 3350 17.7 10 Above 8 Grovedale, 3216 19.3 average growth Eight of the top ten biggest Fashion-buying 9 Launceston, 7250 10.8 Lower than postcodes were in New South Wales and 10 Campbelltown, 2560 24.5 average Victoria, spurred on by above-average growth. growth Toowoomba in Queensland and Launceston in Tasmania also made the list, despite growing 7 at a lower rate than the national average. 2 Liverpool is Australia’s online Fashion capital. 8 Located 32km west of Sydney, the area has undergone substantial demographic change in recent times. Residents here come from a wide variety of ethnic backgrounds; over 66% of the population had both parents born overseas 9 compared to 34.3% nationally. Growth in online shopping here has been driven in part by the influx of new families who’ve moved to the area to take advantage of new 1 housing developments. Similarly, Rouse Hill just 30km north, has a much Capturing the youth market is younger demographic than the national average An influx of key for Fashion retailers looking to – over 40% of the population is under 25 years young families accelerate growth. Over 54% of the old (the national average is 33%). With younger has driven Australians more likely to spend on fashion, and Liverpool’s youth segment have a favourite more partial to buying online, it’s not surprising website that they would promote that this area was one of the top performers growth. to others.1 in the category. Inside Australian Online Shopping © Australia Post
Top buyers by household In South Australia’s southern-most town, National average 3.2 Parcels per household Port MacDonnell, access to bricks-and-mortar shopping is limited, but access to the internet Port is not. Households here are making, on average, MacDonnell 11.0 eleven purchases a year in the Fashion category 5291 – the highest per-household rate in the country. Women’s apparel and footwear items were the Robinvale 3549 10.3 most popular purchases. Parkville Port 3052 8.2 MacDonnell 5291 Condobolin 2877 8.1 Oyster Bay 2225 7.8 Robinvale, situated on the south bank of Murray River in Victoria, is known for its table grapes. It’s a hotspot for footwear purchases too – households here received an average ten parcels containing footwear and apparel items last year. Australian households recieved Robinvale an average of 3.2 3549 parcels of Fashion items last year. 3.2 Inside Australian Online Shopping © Australia Post
Top growth locations Port Douglas Mareeba Edmonton Queensland as a whole has seen growth in the Fashion category of 11.8% – below the national Areas in the Gold average. Nevertheless, there are some areas in Coast region the state experiencing very strong growth. experienced high growth rates, There were pockets in the Gold especially in Coast and Northern Queensland Women’s Fashion. growing more than 20% in 2016. The areas of Tugan, Upper Coomera, Palm Beach and Varsity Lakes along the Gold Coast all experienced high growth rates, especially in Jimboomba Upper Women’s Fashion. This region has one of the Top growth locations Growth rate (%) Coomera fastest growing populations in Australia, spurred Mareeba, 4880 24.0 on by new investment and infrastructure. All the North QLD Palm Beach ingredients for strong online purchasing growth. Edmonton, 4869 23.6 Varsity Lakes Port Douglas, 4877 22.9 Tugun Tugun, 4224 30.3 Upper Coomera, 4209 29.6 Gold Coast, QLD Palm Beach, 4221 23.0 Varsity Lakes, 4227 21.8 Jimboomba, 4280 21.4 Inside Australian Online Shopping © Australia Post
Future Online fashion Online fashion purchases purchases growth growth rate growth rate Wellard 6170 27.8 % Byford 6122 24.3 % Byford Wellard Located on the southern Perth corridor, Wellard Byford, just 20 minutes east of Wellard, is the first Transit Oriented Development (TOD) has become an extension of the Perth on the Perth to Mandurah rail line. Home to metropolitan area, with new developments over 5,000 residents, the area’s online fashion springing up to accommodate new purchases have grown 27% over the past year. homebuyers and young families moving With a skew towards young families (50% of into the area. These characteristics, households are couples with children compared combined with 24% online growth in the Wellard and Byford in with a national average of 45%) and a median past year, has Byford positioned as a Western Australia are age (29) eight years below the national median, strong growth prospect for Fashion sales. Wellard is one to watch in Fashion. our hot picks for growth in online Fashion shopping in coming years. TOD is the exciting fast growing trend in creating vibrant, livable, sustainable communities – creation of compact, walkable, pedestrian- oriented, mixed-use communities centered around high quality train systems Inside Australian Online Shopping © Australia Post
Health & Beauty Inside Australian Online Shopping © Australia Post
Health & Beauty Once again, the Health & Beauty category Online purchases cemented its position with a further 15.5% growth rate uplift in 2016 following an extraordinary 50% growth rate in 2015. 15.4% 15.5% 15.5 It’s now the fifth largest category overall, accounting for 8.7% of the total online % retail market. Consumers are becoming more comfortable Share of online with buying their health and beauty essentials purchases online. In fact beauty products (including perfume) are now some of the most popular items purchased online – sitting in fourth place Metro vs 8.7 overall behind apparel, consumer electronics regional and books. Vitamins and health supplements % growth aren’t far behind, becoming the seventh most popular online purchase in 2016 after METRO REGIONAL homewares and toys. The segment’s big buyers are spread over different demographics. 20.0% Young people, women and young 17.1% 16.5% professionals are buying up beauty 16.3% 16.0% National 15.0% 14.8% products, while health supplements average and vitamins are more popular with 15.5% retired Australians.1 9.3% Growth has been fairly even across metropolitan and regional areas. But the biggest impact has come from very remote areas of Australia6, like the mining towns of Onslow and Port Hedland Growth in WA, where health supplements and vitamins by state are particularly popular. ACT SA VIC NSW QLD NT TAS WA Inside Australian Online Shopping © Australia Post
10 In the list of top ten locations for Health & Beauty Top buying purchases, growth rates have been uneven. While locations each of these areas experienced a rise, only three recorded above-average growth. 4 Online shopping hotspot Point Cook in Melbourne’s outer west took out the top place. The area has seen a housing boom in recent years, and with 8 physical shopping options still catching up, homeowners are heading online to buy their essentials. Health & Beauty purchases in the area have grown by 21%, with the main 2 contributors being pharmacy items. Consumers in regional towns like Wagga Wagga (NSW) and Ballarat (VIC) are enjoying the large range of health and beauty products 5 that are available online. These areas have a comparatively young population (15.8% 3 are aged between 15-24 years, compared to 13.3% nationally), which is likely to be a 7 contributing factor. Beauty retailers with an online Rank Top buying locations Growth rate (%) 9 presence are catching on to 1 Point Cook, 3030 21.0 1 6 growing demand, and using videos 2 Toowoomba, 4350 15.4 and reviews to improve the online 3 Mandurah, 6210 9.9 shopping experience. 4 Mackay, 4740 5.0 5 Success, 6164 15.2 1 6 Glen Waverley, 3150 5.7 7 Wagga Wagga, 2650 25.2 Above Point Cook’s 8 Bundaberg, 4670 11.7 average lack of physical growth 9 Ballarat, 3350 25.0 shopping Lower than options is driving 10 Cairns, 4870 7.5 average growth residents online. Inside Australian Online Shopping © Australia Post
Top buyers by household Tom Price, a mining town in Western Australia’s National average 1.3 Parcels per household Pilbara region, received an average of five Health & Beauty parcels per household in 2016. Tom Price Interestingly, the nearby towns of Karratha 6751 5.0 and Newman had an average of around three parcels per household – which was significantly lower, but still more than double the national Charleville 4470 4.0 average. These towns have comparatively large male populations (65.2% of residents in Tom Price, Kingscote 60.6% in Karratha and 66.4% in Newman, 5225 3.8 compared to the national average of 49.4%). In addition, the median household income is at least 2.2 times the Australian average. Ceduna 5690 3.8 It’s likely that this high-earning male population is heading online to buy up pharmacy items, health supplements and vitamins. Karratha 6714 3.5 Karratha 6714 Katanning 6317 3.4 Tom Price Newman 6751 6753 3.2 Households made an average of 1.3 online Health & Beauty purchases this year. 1.3 Inside Australian Online Shopping © Australia Post
Top growth locations Albury On the border of NSW and VIC, the townships Yarrawonga of Wodonga, Albury and Yarrawonga are some of the fastest growing regional areas for Health Wodonga & Beauty purchases. While there’s good access to physical retail stores, many of the residents are looking for more variety – and they’re going online to find it. They’re buying health related products, which is contributing to the growth rate in the area. While Tasmania has seen a below average growth rate in the category (14.8%), there are Top growth locations Growth rate (%) areas of the state that are experiencing strong NSW and VIC border Wodonga, 3690 46.8 growth. In the city of Hobart, along the River Derwent, the towns of Blackmans Bay, Howrah Albury, 2640 44.0 Bridgewater Howrah and Bridgewater have all grown by more than 24% this year – with beauty purchases having Yarrawonga, 3730 43.7 the biggest impact on this figure. Blackmans Bay The River Derwent Blackmans Bay, 7052 30.9 region, TAS Howrah, 7018 30.7 Bridgewater, 7030 24.1 Inside Australian Online Shopping © Australia Post
Future 58 growth Yanchep 6035 Alkimos 6038 Stratford 3862 43 years years Paynesville Yanchep Stratford’s Paynesville’s 3880 median age median age Paynesville Alkimos Stratford Both Yanchep and Alkimos are part of the Located in Gippsland Victoria, the towns of State Government’s future urban development Stratford and Paynesville have also caught plans. Yanchep in particular is an area to our attention. watch. It’s one of the most rapidly developing Stratford sits on the Avon River, over 200km east resort towns in Western Australia, and of Melbourne. The principal industries in the area according to the ABS, one of the fastest are dairy, sheep, beef cattle and grain farming. growing suburbs, with the biggest population As for future growth, we’re increase in FY16 Australia-wide. Paynesville, a further 60km east, is a charming looking at the coastal With beautiful beaches, two golf courses village with canals and inlets that have earned it the title ‘boating capital’ of Victoria. suburbs of Yanchep and and a modern shopping complex, it appears Alkimos in Western Australia. an increasing number of Australians are Both areas have a relatively old demographic choosing to make the sea change. Home – Stratford’s median age is 43 and Paynesville’s Located just 56km north of to 18,900 people, the area already has an is 58, taking them well above the Australian Perth, these areas are set online growth well above the national average of 37. average – and we’re expecting Yanchep to make waves in the Health to grow into an even bigger player in the The towns have a strong demand in the Health & Beauty space. Health & Beauty space. & Beauty category already, and based on the age profile, we predict demand for pharmacy goods, health supplements and vitamins to continue increasing. Inside Australian Online Shopping © Australia Post
Hobbies & Recreational Goods Inside Australian Online Shopping © Australia Post
Hobbies & Recreational Goods It’s one of the smaller online categories – Online purchases accounting for just 5.2% of all online sales – growth rate but Hobbies & Recreational Goods is growing fast, up 15.6% last year. 16.0% 15.1% 15.6 It’s a diverse category covering everything from Games & Toys, to Music, Automotive and % Outdoor Equipment. Games & Toys and Outdoor equipment make up over half the purchases. Share of online purchases It appears music is the next category to be disrupted by the consumer shift to online channels. Metro vs 5.2 It has seen the biggest growth regional of all the sub-categories in the % growth past year. METRO REGIONAL Metro areas slightly outgrew their regional counterparts – up 16% compared with 15.1%.6 Australia’s major cities and inner regional 18.7 % 18.0% areas6 grew 16% and 15.8% respectively. 17.7 % National 16.6% There was impressive double-digit growth average 14.2% across all states, with NT, NSW, VIC and ACT leading the way. 15.6% 13.2% 10.9% 10.7 % Growth by state NT NSW VIC ACT QLD TAS WA SA Inside Australian Online Shopping © Australia Post
Regional towns in Queensland Top buying took out the top four spots for locations overall purchases in the category, 4 led predominately by a demand for automotive supplies. 2 People in Queensland’s urban areas, outside of Brisbane, travel an average of 1,400km (or 3 20.3%) further by passenger vehicle than the average Australian7 – a likely reason for the 1 high sales in this category. Toowoomba, west of Brisbane, is the number one area for online Hobbies & Recreational Goods sales. It’s Australia’s second most populous inland city and home to over 6 102,000 residents. The population includes 10 8 7 a high proportion of residents with both parents born in Australia (76.3% compared 9 to 53.7% nationally). Point Cook in outer-western Melbourne placed fifth overall, with the largest growth rate in the Rank Top buying locations Growth rate (%) top ten, up 25.2%. Limited access to shopping 1 Toowoomba, 4350 13.4 5 options has driven the online demand here, mainly for toys and outdoor equipment. 2 Gladstone, 4680 -2.1 Point Cook also has a large number of young 3 Bundaberg, 4670 13.5 families with children (53.2% compared to 44.6% nationally), a potential factor in the 4 Mackay, 4740 5.9 high toy sales. 5 Point Cook, 3030 25.2 6 Wyong, 2259 24.7 7 Gosford, 2250 18.5 Above 8 Campbelltown, 2560 17.7 average growth 9 Sanctuary Point, 2540 17.2 Lower than 10 Mandurah, 6210 7.1 average growth Inside Australian Online Shopping © Australia Post
Due to the lack of bricks-and-mortar shopping Top buyers options, the category is particularly popular in by household regional and remote towns of Australia. National 0.8 Parcels per Cobar in central New South Wales relies heavily average household on metal ore mining, with 29.4% of people Tom Price employed in the industry. The area’s isolated 6751 3.3 location is prompting residents to look online, particularly to buy outdoor sporting and leisure equipment. Households here also Cobar receive three times more parcels a year 2835 2.5 relating to automotive and cycling activities, than the general population. Roxby Downs 5725 2.3 Cobar 2835 Newman 6753 2.2 Jindabyne 2627 2.1 Jindabyne, south of Canberra, is a popular holiday destination due to its proximity to the Kosciuszko National Park. The area is famous for skiing in winter and abseiling, rock-climbing, mountain biking, horse riding and fly fishing in summer. So it’s not surprising that households here receive an average of two Hobbies & Households made Recreational Goods parcels a year – almost an average of three times the national average. 0.8 Hobbies & Recreational Jindabyne Goods purchases 2627 for the year. 0.8 Inside Australian Online Shopping © Australia Post
Top growth locations Eagleby Ormeau Upper Coomera There’s a cluster of high growth areas in Melbourne’s north. Essendon, Strathmore and Pascoe Vale each recorded growth of almost double the national average for Hobbies & Recreational Goods. Popular online categories in these areas were Toys and Outdoor Equipment. The growth is likely being driven by couples with children – 50.8% of families here fall into that category, compared with the national average of 44.6%. Top growth locations Growth rate (%) While overall growth in Queensland is just below the national average at 14.2%, there are areas Eagleby, 4207 33.8 QLD South in the state experiencing good growth. Strathmore Upper Coomera, 4209 24.6 Eagleby, Ormeau and Upper Coomera in Pascoe Ormeau, 4208 21.4 Queensland’s south are seeing growth rates Essendon Vale above 21%. Not surprisingly, Games & Toys purchases are popular here, given 25% of the population is under the age of 15 (compared Pascoe Vale, 3044 31.5 North Melbourne to 19.3% nationally). Essendon, 3040 29.2 Strathmore, 3041 28.0 Inside Australian Online Shopping © Australia Post
Future Online hobbies Online hobbies and recreational and recreational growth goods purchases goods purchases growth rate growth rate Morayfield 19.7 % 25.6 % North Lakes Mount Morayfield Barker 4506 5251 Mount Barker Mount Gambier A boom in new housing is attracting young They’re four hours drive apart, but Mount families to Morayfield and North Lakes, in the Barker and Mount Gambier in South Moreton Bay Region of Queensland. With a Australia share similar online shopping medium age of 31 – six years below the national habits – with both areas seeing strong average – we predict a surge in online purchases growth in Music and Outdoor items. for games, toys and outdoor leisure items here. Nestled in the south-east corner of South Our hot picks for future Australia, Mount Gambier is the second most populous city in the state. It’s well growth are Morayfield and known among tourists, with its captivating North Lakes, both in the maar cobalt Blue Lake and volcanic Moreton Bay region of landscape, and attracts hundreds of young jazz musicians from across Australia each Queensland – as well as year for the Generation in Jazz Festival. Mount Barker and Mount Mount Barker, 33km east of Adelaide’s city Gambier in South Australia. Situated just 40 centre, is one of the fastest growing areas minutes north of in South Australia. With plenty of young Brisbane, the families moving in, and a range of outdoor picturesque Moreton facilities – like skate parks, walking trails Bay Region is a fast and golf – we believe this area has strong growing area in potential for future growth. Australia Inside Australian Online Shopping © Australia Post
Homewares & Appliances Inside Australian Online Shopping © Australia Post
Homewares & Appliances One of Australia’s most recognisable retailers Online purchases for consumer electronics, closed its doors in growth rate 2016. The result has been an increasingly competitive landscape in the Homewares & 9.2% Appliances sector – as the pressure builds to 6.9 % adapt and innovate, or follow the same path. As more and more retailers are expanding their product lines to play in this space, keeping any kind of competitive edge is a challenge. Share of online purchases Successful retailers are finding 1.5% ways to differentiate their offering, Metro vs 14.8 and improve the online experience. regional % growth The category accounts for 14.8% of the total online market and has seen a moderate 6.9% METRO REGIONAL growth over the year. Small appliance purchases have made the biggest impact, growing 23% – double the overall online growth rate of 11.5%. Homewares trail at 11.6%, and consumer 10.5% electronics fall further behind with a growth rate of 3.8%. 8.5% National Consumer electronics and manchester items are average 5.9% in the top five most tracked products by online 6.9% shoppers1, making it easy for these customers 5.0% to keep an eye on their orders is important. 3.3% 2.9% Metropolitan areas have seen the most growth, particularly in New South Wales and Victoria, 1.0% with purchases up 12.9% and 9.7% respectively. -2.2% In contrast, regional areas have experienced Growth a relatively small increase of 1.5% over the by state same period. NSW VIC SA TAS QLD ACT WA NT Inside Australian Online Shopping © Australia Post
Across the ten biggest-buying postcodes for Top buying Rank Top buying locations Growth rate (%) Homewares & Appliances, growth has been locations 1 Point Cook, 3030 10.9 fairly uneven – with only half of these areas recording an above-average growth rate. 6 2 Toowoomba, 4350 3.9 3 Liverpool, 2170 11.8 With new developments going 4 Hoppers Crossing, 3029 5.3 up in the area, we’ve seen families flocking to Melbourne’s 5 Gosford, 2250 9.5 outer-western suburbs to settle 6 Mackay, 4740 -3.8 down – creating an online 7 Cranbourne, 3977 6.5 shopping boom in the process. 8 Wyong, 2259 8.1 Point Cook, one of the largest-growing 2 9 Campbelltown, 2560 5.4 postcodes in Australia – remains the 10 Greystanes, 2145 17.0 country’s number one buyer of Homewares and Appliances. Sales have grown at an impressive rate too – four percentage points above the national average. The area has a high percentage of homeowners (over 71% compared to the national average of 67%) – and with few bricks and mortar shopping 8 options, they’re heading online to furnish 10 5 their homes. 9 3 Nearby suburb Hoppers Crossing has a similar demographic, and came in a close second in Victoria. The 2145 postcode, west of Parramatta, 1 jumped into the top ten largest buying areas 4 for the category with an impressive 17% 1 7 growth rate. The Greystanes suburb was the biggest contributor, making up 39% of online Point Cook, one purchases in the postcode. Like Point Cook Above of the largest- the area has a high number of homeowners average growing suburbs (81%), and evidently they’re choosing to shop growth in the country, online for home comforts. Lower than average recorded 10.9% growth growth. Inside Australian Online Shopping © Australia Post
Top buyers by household Crace, a suburb located 12km north of National average 2.2 Parcels per household Canberra, purchased an average of 5.4 Homewares & Appliances parcels per household Bridgetown in 2016 – twice the national average. A number 6255 5.5 of factors could be attributed to the spike in purchases, including Crace’s relatively young demographic. With a median age of 27, this age Crace 2911 5.4 group is technology savvy and always on the lookout for the best bargain. Jindera 2642 5.1 Crace 2911 Marulan 2579 4.8 Jindabyne 2627 4.8 Jindabyne in south-east New South Wales is close to several ski resorts in the Kosciuszko National Park, making it a popular spot for winter holidaymakers. With the area receiving an average of 4.8 parcels per household – more than double the national average – it’s possible On average, that residents are going online to fit out their Australian homes for guests and visitors. households made 2.2 online purchases Jindabyne for Homewares & 2627 Appliances in 2016. 2.2 Inside Australian Online Shopping © Australia Post
Top growth locations New South Wales leads the way with a growth rate of 10.5%, followed closely by Victoria at 8.5%. New housing developments still Riverstone have the biggest impact on the Kingswood Homewares & Appliances category, as new homemakers shop online Plumpton for all the home comforts. Mount Druitt The north-west and south-west corridors of New South Wales are housing hotspots, and have Glenfield had some of the largest online growth rates for Austral Homeware and Appliance purchases. Given the construction plans still in the pipeline, growth in West Hoxton these areas is expected to continue in 2017. Top growth locations Growth rate (%) Plumpton, 2761 30.0 North-West corridor Mount Druitt, 2770 20.9 Riverstone, 2765 19.9 Kingswood, 2747 19.8 South-West corridor Glenfield, 2167 31.9 Austral, 2179 22.2 New South Wales West Hoxton, 2171 17.7 priority growth areas contribute to some of the largest growth in online purchases. Inside Australian Online Shopping © Australia Post
Future Greater Geelong’s growth estimated population growth 2006-2016 Online purchases growth rate 41.2% 30.5% 12.2 % Mount Duneed Barwon Heads 19.8% Ocean Grove Mount Barwon Ocean Duneed Heads Grove As for future growth, we’re 3217 3227 3226 looking at Greater Geelong – Victoria’s second largest city. With a growing population (an estimated Many areas have already increased 12.2% growth from 2006 to 2016), and the significantly. Mount Duneed and future development portfolio to match, Armstrong Creek have seen a huge the City of Greater Geelong is set to make 41.2% growth in online shopping. And as a big impact online in the coming year. these pristine seaside locations continue 26 to attract more young families looking for affordable housing options (median age here is 26, eleven years below the years national average) this figure is only Mount Duneed’s expected to keep growing. average age of 26, eleven years below Other high growth areas include Barwon the national average, Heads at 30.5%, and Ocean Grove at has helped drive online 19.8% – both also showing great potential shopping growth. for the future. Inside Australian Online Shopping © Australia Post
Media Inside Australian Online Shopping © Australia Post
Media The Media category which includes books, Online purchases music, software and magazines had a huge growth rate increase in popularity last year. In fact, it achieved the highest growth rate of any category up 22.9% from 2015, accounting for 22.7% 23.4% 22.9 % 12.9% of all online purchases in Australia. Books alone made up over 80% of online Media purchases and is growing at 24% year-on-year. Share of online purchases The channel shift from physical to online stores in recent years has propelled Media to the third most Metro vs 12.9 popular online category overall. regional % growth Australians across all consumer segments have METRO REGIONAL contributed fairly evenly. Interestingly, one in every ten online Media sales is coming from the Youth segment.1 There’s been strong growth in all states, with 27.0% Northern Territory and Victoria leading the way. 25.3% 25.2% 24.7 % National 24.0% 24.0% Growth in regional areas was up 23.4%, average slightly topping the metropolitan growth rate 22.9% 20.8% of 22.7%. Very Remote Regions of Australia6 had a significant impact on the figures, with 16.4% a growth rate of 30%. Growth by state NT VIC SA TAS NSW ACT QLD WA Inside Australian Online Shopping © Australia Post
There’s no typical Media buyer. Top buying The category attracts people locations from all segments, with the top 5 ten performing areas displaying a diverse range of demographic 8 characteristics. 9 The Gosford postcode, on the NSW Central Coast, took out top spot for online Media, with 4 the suburbs of Wyoming, Erina and Narara 2 making up 38% of purchases there. Families with children are under-represented here, with the median age sitting somewhere between early 40s and mid-50s. Coming in tenth place, and with quite a different demographic, Cranbourne and Cranbourne 6 1 East in Melbourne have the fastest-growing populations in Victoria. They’ve also been the fastest growing areas for online Media, with a growth rate of 9.8 percentage points above the national average. As the suburb continues to Rank Top buying locations Growth rate (%) expand, young couples and families are settling 3 in – with the median age sitting in the early 30s. 1 Gosford, 2250 16.4 7 10 2 Toowoomba, 4350 27.3 3 Point Cook, 3030 25.9 4 Nambour, 4560 11.4 5 Mackay, 4740 11.0 1 6 Mandurah, 6210 10.8 7 Grovedale, 3216 23.9 Above Gosford’s median 8 Rockhampton City, 4700 -7.8 average age is between growth 9 Gladstone, 4680 3.4 early 40s and Lower than mid-50s. 10 Cranbourne, 3977 32.7 average growth Inside Australian Online Shopping © Australia Post
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