Inside Australian Online Shopping - eCommerce Industry Report - Australia Post
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Inside eCommerce Industry Australian Report Contents Online State of Shopping eCommerce Online shopping trends Variety Stores Fashion & Apparel 20 21 Home & Garden Health & Beauty Hobbies & Recreational Goods Specialty Food & Liquor The delivery experience
About this report Contents Welcome to the sixth edition of the Inside Australian Online Shopping Industry Report, an in-depth study State of into consumer online buying eCommerce behaviour and trends. Online The report has been prepared using 2019 and shopping 2020 deliveries data recorded by the Australia trends Post Group, unless otherwise stated. Commentary in this report relating to online Variety shopping is based on an extrapolation of this data. Stores Year-on-year (YOY) growth numbers are based on actual or extrapolated transaction volumes. Fashion & Apparel For more eCommerce insights, access our monthly market updates at auspost.com.au/einsights Home & Garden Health & Beauty Hobbies & Recreational Goods Specialty Food & Liquor The delivery experience 2 Inside Australian Online Shopping 2021
Contents Contents Foreword 4 Online shopping trends 14 Specialty retail categories 29 Sustained participation 15 Australian retailer perspective 30 Executive summary 5 Shopping intent 16 Variety Stores 31 State of eCommerce Australia's new online shoppers 18 Fashion & Apparel 34 Home & Garden 37 State of eCommerce 6 A closer look at April 19 Online Health & Beauty 40 shopping Australia's regular online shoppers 20 trends A monumental year of change 7 Hobbies & Recreational Goods 43 International supply chains disrupted 22 Phenomenal eCommerce growth 8 Specialty Food & Liquor 46 eCommerce across the globe 23 Variety The lockdown effect 9 Stores Aussies shopped around 24 Shopping frequency 10 The buy local trend 25 The delivery experience 49 Online shopping participation 11 How Aussies buy online 27 Fashion New eCommerce priorities 50 Locations of Australia's 13 & Apparel biggest shoppers Payment methods 28 Preferred delivery points 52 Home Methodology 54 & Garden References 55 Health & Beauty Hobbies & Recreational Goods Specialty Food & Liquor The delivery experience 3 Inside Australian Online Shopping 2021
Foreword Contents 31 March 2021 Welcome to the 2021 Australia Post eCommerce Industry report. State of eCommerce A year unlike any other before it, Beyond supporting businesses, Whether it was helping a business to scale their 2020 was not only full of tremendous the local Post Office became more operations to meet increased demand, or helping Online shopping a small business come online for the first time change for how we live, work and important than ever before; staying through our MyPost Business platforms, it has trends interact, it also altered the trajectory open and acting as a vital local hub been a privilege to use the scope of our national of the Australian eCommerce industry. for Australians, particularly in rural processing and delivery network to deliver Variety for Australia. and regional Australia, helping Stores As social distancing, border closures and Beyond supporting businesses, the local Post lockdowns became commonplace, Australians communities stay connected. Office became more important than ever before; turned online for the things they needed. And they staying open and acting as a vital local hub for Fashion did so in record numbers with over four in five Border restrictions, reduced flights and in some Australians, particularly in rural and regional & Apparel Australian households (almost 9 million) making instances the closure of some international lanes Australia, helping communities stay connected. an online purchase at some point during the year. created an additional barrier for shoppers looking Included in that number was more than 1.3 million to purchase from overseas, and ‘buy local’ trends As the industry begins to settle and find a new normal, it will be important retailers take the Home households that purchased in 2020 that did not and hashtags gained popularity as shoppers & Garden buy online in 2019. looked to support local businesses through the opportunity to re-group and look to the year ahead. difficult times. I trust business owners can use the insights in This increased engagement resulted in online this report, in conjunction with the learnings they purchases in 2020 growing by 57% YOY, and Though 2020 was a year full of challenges, have gained over the past year, to inform future Health Australians spending a record $50.46 billion it was also one brimming with opportunity for investment, improve resilience and strengthen & Beauty online.1 As a percentage of total retail, online Australian retailers. While businesses had to pivot their business – ensuring they are well placed to sales accounted for 16.3%2 – a figure we did not early and quickly change how they continued take advantage of future opportunities. expect to see until about 2023. While this sharp to serve their customers, research conducted Hobbies & Recreational acceleration in the eCommerce market brought by Deloitte Access Economics found those Goods Australians in line with where our international that invested in eCommerce were significantly peers such as the United States and the United buffered from the impacts of COVID-19, limiting Kingdom were pre-pandemic, those markets have overall revenue losses to 7% between March and Specialty Rodney Boys Food & now also accelerated, and the Australian market August 2020.3 Liquor still has some ground to cover. During the challenges, Australia Post continued to Acting Group Chief As local eCommerce grew strongly, significant support Australian businesses, and demonstrated Executive Officer and international disruption led to a contraction in agility to help those businesses find new ways to Managing Director The delivery experience cross-border eCommerce. reach their customers. Australia Post 4 Inside Australian Online Shopping 2021
Executive summary Contents 31 March 2021 The events of 2020 and ongoing Online shopping was initially driven by necessity The events of 2020 gave rise to a sudden and while bricks and mortar stores were closed, and permanent shift in buyer behaviour. Shoppers’ effects saw a shift in the industry this habit became ingrained even as restrictions habits have changed and while they are more State of eCommerce that we could never have foreseen. eased. Other factors were also at play, such as engaged than ever, they are also more comfortable One thing is clear, the resulting social distancing and the shift to working from buying from a broader cross-section of retailers home, adding to the sustained engagement and categories. This poses a question for retailers: Online transformation has brought about with online. how can they improve the experience they deliver shopping a significant step-change for for their customers and by extension, continue to trends be competitive? eCommerce in Australia. Each month saw an average of In my view, it needs to be a collaborative effort. Last year, 9 million Australian households shopped 1 million additional households A seamless end-to-end experience is critical, Variety Stores online – that’s 82% of all households. We saw this buying online when compared to and the power of partnerships between retailers, play out in real-time, and you’ll see as you read supply chains, and delivery partners is even through this report the exciting implications of this 2019. This can be attributed to more important, in order to continue meeting the as we plan for the months and years ahead. two key factors: regular shoppers evolving needs of our customers. Fashion & Apparel At the height of the first COVID-19 wave, the buying more frequently and new Through the early months of 2021 we’ve continued to see around 5 million households shopping national lockdown saw online purchase growth shoppers entering the market for online each month. While the effects of the rise to a level which had not been seen before outside of a key sales period. Then again, during the first time. pandemic may still be felt for some time, business Home & Garden Victoria’s second wave, a new record was set and consumer confidence continues to improve. eclipsing the initial growth numbers. More than 1.3 million new households entered We’ve reached a new level, and online has never the market last year, with the largest cohort of been more in focus. These events set a new baseline for the remainder of the year. Although restrictions eased and these shopping online for the first time in April. Health To understand their future buying behaviour, & Beauty online shopping activity softened, volumes never returned to the pre-pandemic level. This was we tracked them through to December. Had they evident in November when the combination of bought online out of pure necessity, or would the Cyber Sales and people shopping early for a pattern start to form? The data revealed that Hobbies & Recreational Christmas saw the month become the biggest almost half of this new contingent continued to Goods in Australian online shopping history. buy online on a frequent basis (in at least three of the months that followed April). Many of the new shoppers had converted into regular shoppers. Specialty Food & Liquor Ben Franzi General Manager, Parcel & Express Services The delivery experience Australia Post 5 Inside Australian Online Shopping 2021
State of eCommerce Contents State of eCommerce Online shopping trends Variety Stores Fashion & Apparel Home & Garden Health & Beauty Hobbies & Recreational Goods Specialty Food & Liquor The delivery experience 6 Inside Australian Online Shopping 2021
STATE OF ECOMMERCE A monumental year Contents of change State of The World Health Organisation eCommerce declared COVID-19 a global pandemic on 11 March 2020.4 Online shopping Within days, the Australian government had trends introduced measures to slow the spread and by the end of March all Australian states had implemented additional lockdown restrictions Variety Stores to help flatten the curve.5 Australian consumers had no choice but to change their shopping behaviours, driving a dramatic shift Fashion in online shopping behaviour. & Apparel Home & Garden Health 9 mil & Beauty Hobbies & Recreational Goods Specialty Food & Liquor Aussie households The delivery shopped online in 2020 experience 7 Inside Australian Online Shopping 2021
STATE OF ECOMMERCE Phenomenal Contents eCommerce growth State of Spending more time at home than ever eCommerce before, people pulled out phones and laptops to do their shopping. Online shopping In Australia, online shopping growth for the trends 12 months to 31 December topped 57% YOY. In fact, it took just over eight months of Retail spend online shopping in 2020 to eclipse 12 months’ $310.29B Variety worth in 2019. Stores More Australians shopped online than ever before in 2020. Around four in five households – up 9.7% YOY Fashion that’s almost nine million – purchased online at & Apparel some point during the year. Every month during Online goods spend 2020, an average of around 1 million additional households shopped online compared to 2019. $50.46B Home up 57% YOY With all this online activity, purchase volumes & Garden soared. Australians spent an incredible $50.46 billion online over the year, up from $32.1 billion in 2019 and accounting for 16.3% of retail spend Health (excluding cafés, restaurants and takeaway food).2 & Beauty 16.3% Hobbies & Recreational Goods Specialty Food & Liquor The delivery Online share of retail spend in 2020 experience 8 Inside Australian Online Shopping 2021
STATE OF ECOMMERCE The lockdown effect Contents The first wave: The second wave: Subsequent lockdowns: A national lockdown A look at Victoria South Australia and New South Wales State of eCommerce Australians began living under After a brief respite, metropolitan As Victorian restrictions gradually strict new lockdown rules on Melbourne and Mitchell Shire went eased throughout November, Online Monday 23 March.5 back into lockdown in early July.5 conditions changed in South Australia. shopping trends With restrictions closing non-essential services At this point, the Australian eCommerce industry In Adelaide, a COVID-19 outbreak in like pubs, cinemas and gyms, and with Easter started running at two speeds. mid-November prompted a state-wide lockdown7 Variety holiday plans cancelled, Australians began By the end of July, Victorian online purchases had which ended up only lasting three days. Stores shopping online in droves. grown almost 17% above the state’s April peak. This, combined with Black Friday and Cyber Growth for the seven days from Easter Sunday Monday, saw online purchases grow by 64% YOY In early August, Victoria entered a state of disaster in the state that month. In fact, November was was up more than 135% YOY with all categories and Melbourne moved to Stage 4 restrictions,6 Fashion performing strongly. Variety Stores (188% YOY) South Australia’s biggest online shopping month & Apparel with strict rules to limit the movement of people on record, with purchases 25% higher than the and Home & Garden (177% YOY) were and a city-wide curfew imposed. Non-essential the front-runners. previous record set in April. retailers were forced to close their doors once Home The number of households shopping online for again, and eCommerce went into overdrive. & Garden the month of April grew to a massive 5.2 million, Record growth of 169.6% YOY was recorded in Around mid-December, a new and online goods spend grew by 95% YOY.1 the state for the month of August, with purchases cluster of COVID-19 cases emerged 21% higher than July. By comparison, national growth in August was 85% YOY. on the Northern Beaches of Health Growth following Easter Sunday New South Wales. & Beauty All categories The region went into lockdown just before 135% Hobbies & Christmas, with tight restrictions over the holiday Recreational period and lesser restrictions for greater Sydney.8 Goods Residents heeded advice by avoiding the Variety Stores Boxing Day sales in person and instead heading 188% Specialty online. Unsurprisingly, NSW accounted for 34.5% Food & of all online purchases nationally in December – Liquor the highest for the state in 2020. Home & Garden 177% The delivery experience 9 Inside Australian Online Shopping 2021
STATE OF ECOMMERCE Shopping frequency Contents COVID-19 restrictions had a significant impact on how often Australians State of eCommerce shopped online. Of the 2.3 million low frequency Of the 0.5 million high frequency online shoppers who made an online shoppers who made an When comparing purchases made between online purchase less than four times online purchase at least once a week Online 52% 80% March and December in 2019 to 2020, the shopping percentage of customers who shopped less than between March and December 2019... between March and December 2019... trends four times reduced. Additionally, the percentage of customers who purchased each week increased Variety in 2020 for the same period, growing from 6% in Stores 2019 to 16%. Fashion & Apparel shopped online more either maintained or increased their online shopping frequency in 2020 frequently in 2020, and Home & Garden (by an average 19.6%). 26% shopped at least 10 times between Health & Beauty Hobbies & March and December 2020. Recreational Goods Specialty Food & Liquor The delivery experience Inside Australian Online Shopping 2021 10 Inside Australian Online Shopping 2021
STATE OF ECOMMERCE Online shopping Metro YOY growth Contents participation accelerated In Australia, pre-pandemic predictions eCommerce experienced 60% State of eCommerce for eCommerce in 2020 hovered at high growth across both metropolitan Regional YOY growth 50.7% around 12-13% of total retail spend. and regional areas nationwide. Online In fact, the online share of retail spend shopping That said, when it comes to share of online trends hit 16.3% last year. purchases, around seven in ten were made in metropolitan areas, with the remainder spread This extraordinary growth brought the Australian across regional and remote Australia. Variety market into line with other western eCommerce Stores leaders such as the United Kingdom, Denmark and the United States, where on average 15-18% of retail spend was captured online in 2019. Fashion That said, compared to Asian countries such as & Apparel China and South Korea, Australia still lags behind – these nations have an online penetration rate of Throughout 2020, three new This record was short-lived. The Victorian almost 30%.9 lockdown in August triggered another surge in eCommerce records were set as online online shopping and pushed purchases 5.4% Home While this sharp acceleration in the eCommerce shopping accelerated over the year. higher. In the week commencing 16 August, sales & Garden market brought Australians in line with where events – Afterpay Day and Click Frenzy Sports – our international peers such as the United States In April, online purchases soared 6.8% higher than drove the largest single week of eCommerce for and the United Kingdom were pre-pandemic, the previous record online shopping period – the Health the year to date. those markets have now also accelerated and the 30 days to 18 December 2019, which encompassed & Beauty Australian market still has some ground to cover. the popular cyber sale events (Black Friday and November was tipped to be the record month of Cyber Monday), and the pre-Christmas rush. the year, and it didn’t disappoint. Many Australians took advantage of the Black Friday and Cyber Hobbies & 5.5 mil Recreational Monday sales, getting their festive shopping Goods in early. Online purchases for the month grew 55.6% YOY, topping August 2020 by 7%. With many retailers starting sales early, the week Specialty commencing 23 November (which included Black Food & Liquor Friday) grew 48% YOY. The following week saw online purchases grow 42% YOY, making it the households shopped online in November biggest week in Australian eCommerce history. The delivery experience 11 Inside Australian Online Shopping 2021
STATE OF ECOMMERCE Distribution of online purchases by state and territory Contents Pandemic National Melbourne Melbourne Melbourne Sydney declared restrictions Stage 3 Stage 4 restrictions easing COVID-19 State of easing restrictions eCommerce SA lockdown 3 days Online shopping trends Variety Stores New South Wales 36% 50.5% YOY growth Fashion & Apparel Victoria 81.9% YOY growth of all online purchases were made in Victoria Queensland Home from July to October 48.3% YOY growth & Garden Western Australia 44.4% YOY growth Health South Australia & Beauty 46.6 YOY growth Tasmania and Hobbies & the Territories Recreational 43% YOY growth Goods Specialty Use our interactive graph to Food & explore percentage of online Liquor purchases by state and territory. Visit: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec The delivery 2020 auspost.com.au/einsights experience 12 Inside Australian Online Shopping 2021
STATE OF ECOMMERCE Outer suburbs in Victoria Contents and NSW were home to the Top 10 online shopping locations by purchase volume YOY growth biggest online shoppers State of eCommerce 1 Point Cook, VIC 3030 119.0% Unsurprisingly, six of the top 10 online shopping locations in 2020 were in 2 Cranbourne, VIC 3977 114.6% Online Victoria, up from just three in 2019. shopping trends This growth was no doubt driven by 3 Hoppers Crossing, VIC 3029 120.6% the state’s COVID-19 restrictions, Variety which saw most retail stores close in Stores 4 Craigieburn, VIC 3064 137.2% metropolitan Melbourne for months. Point Cook, in Melbourne’s west, retained its title 5 Doreen, VIC 3754 143.4% Fashion as Australia’s top online shopping location for & Apparel the sixth year running, with growth of more than 119% YOY. Two more Victorian suburbs round out 6 Toowoomba, QLD 4350 55.7% the top three, with the south-eastern suburb of Home Cranbourne a close second, followed by Hoppers & Garden 7 Liverpool, NSW 2170 57.6% Crossing in the outer west. Doreen in Melbourne's north was one of the year’s biggest movers, climbing from 18th position to fifth over the course 8 Rouse Hill, NSW 2155 76.2% Health of 2020. These suburbs are in major growth areas, & Beauty with new housing estates popular among young professionals and families.10 9 Ballarat, VIC 3350 74.5% Hobbies & In each of the nation’s top five postcodes, Recreational residents shopped more than twice as much as 10 Gosford, NSW 2250 59.3% Goods they did in 2019, with at least 90% of households having shopped online. For the top four locations, Specialty online shopping participation increased by five National average Food & 57% YOY percentage points or more in 2020. Liquor The delivery experience 13 Inside Australian Online Shopping 2021
Online shopping trends Contents State of eCommerce Online shopping trends Variety Stores Fashion & Apparel Home & Garden Health & Beauty Hobbies & Recreational Goods Specialty Food & Liquor The delivery experience 14 Inside Australian Online Shopping 2021
ONLINE SHOPPING TRENDS Sustained participation Contents The most exciting trend emerging from an extraordinary year of growth State of eCommerce in eCommerce was the sustained participation in online shopping. Online shopping In many cases, people shopped more online as trends the year progressed. This indicates that shoppers are becoming more comfortable with using eCommerce for their day-to-day shopping needs. Variety Stores Overall, four in five (82%) Australian households made an online purchase during 2020, up from 75% in 2019. Regular shoppers – those that Fashion shopped in both 2019 and 2020 – began shopping & Apparel more frequently and from a wider cross-section of retailers. Home & Garden Health & Beauty Hobbies & Recreational Goods Specialty Food & Liquor The delivery experience 15 Inside Australian Online Shopping 2021
ONLINE SHOPPING TRENDS Aussies intend to keep Contents shopping online State of In the ABS Household Impacts eCommerce of COVID-19 Survey, a third of respondents indicated they prefer Online to shop online now more than they shopping trends did before the pandemic.11 These figures are even higher in states that have Variety experienced greater case numbers and tougher Stores restrictions – 43% in Victoria and 35% in New South Wales What’s more, in a December 2020 Australia Post Fashion survey, respondents indicated they are shopping & Apparel online 55% more than before the pandemic.12 And, while they expect their online shopping frequency to decrease by about half as the Home health crisis abates, this is still 28% higher than & Garden pre-COVID-19 levels. These figures suggest that the extraordinary Shoppers expect their online 28% events of 2020 will have a lasting impact on Health & Beauty eCommerce in Australia. shopping frequency to remain Hobbies & Recreational Goods Specialty Food & Liquor The delivery higher than before the pandemic experience 16 Inside Australian Online Shopping 2021
STATE OF ECOMMERCE Contents State of eCommerce Online shopping trends 1.36 mil Variety Stores Fashion & Apparel Home Aussie households made an online & Garden purchase for the first time in 2020 Health & Beauty Hobbies & Recreational Goods Specialty Food & Liquor The delivery experience 17 Inside Australian Online Shopping 2021
ONLINE SHOPPING TRENDS 48% Australia's new Average number of online purchases for Contents online shoppers new online shoppers increased in 2020 of new online shoppers State of Of the nine million households that made purchases from: 2.8 eCommerce bought online in 2020, 1.36 million • Home & Garden made an online purchase for the items • Variety Stores Online first time. in December shopping trends And of these initial online purchases, more than 1.4 93% (1.25 million) took place in the ten months Variety from March to December 2020. Sorrento, VIC 3943 items Stores To offer a sense of the Australians who were in January new to eCommerce in 2020, we’ve mapped our Blairgowrie, VIC 3942 deliveries data against Roy Morgan’s communities. Fashion They mainly fell into the Metrotechs, Doing Fine Rockbank, VIC 3335 & Apparel and Fair Go communities. Drilling down, the dominant Helix personas were Budget Living, Cowes, VIC 3922 Fit and Fab and Relaxed Living. Home & Garden This group of new shoppers typically come from Dominant Helix personas Austral, NSW 2179 two distinctly different household types. The first among new online shoppers: are young and mid-life families, who are on-trend Riverstone, NSW 2765 and tech-savvy yet also conscious and pragmatic • Budget Living Health & Beauty about what they buy and where their money goes. • Fit and Fab Anglesea, VIC 3230 The second are older households, likely retired • Relaxed Living and often living more rurally. Port Macdonnell, SA 5291 Hobbies & Looking at the top postcodes for new shoppers, Recreational Goods it comes as no surprise that all but three of the Point Lonsdale, VIC 3225 top ten are in Victoria – after all, the state faced far longer and more limiting restrictions than Wollert, VIC 3750 Specialty others in 2020. Food & Liquor Top 10 online shopping locations The delivery Regional Major City experience by percentage of new shoppers 18 Inside Australian Online Shopping 2021
ONLINE SHOPPING TRENDS A closer look at April: Contents New online shoppers State of While the months following the eCommerce declaration of the COVID-19 pandemic saw a substantial increase Online in online shopping, the surge of new shopping trends online shoppers in April was quite extraordinary. Variety In fact, more than 240,000 Australian households Stores shopped online for the first time in April. Of these households, 118,000 went on to shop online again in at least three of the remaining eight months of Fashion the year, and an average 90,000 returned to shop & Apparel online every month between May and December. 118k + Home What's more, these new online shoppers & Garden increased their purchase frequency over time, from an average 1.9 times in April to 2.9 times in December. And as they became more familiar Health with shopping online, their spend diversified & Beauty across more categories. By December, 22% purchased from three or more specialty retail categories, up from 16% in April. Hobbies & Recreational Goods of the households new to online shopping in April returned to Specialty Food & purchase in at least three of the Liquor remaining months in 2020 The delivery experience 19 Inside Australian Online Shopping 2021
ONLINE SHOPPING TRENDS Australia's regular Average number of online purchases Most popular sub-categories Contents online shoppers by regular online shoppers for regular shoppers: • Major & Discount Stores State of Nationwide, 7.6 million households are 28 items • Online Marketplaces eCommerce considered regular online shoppers in 2020 • Homewares & Appliances (those that shopped in both 2019 18 Online and 2020). items shopping in 2019 trends On average, around two thirds (63%) of regular online shoppers made at least one purchase every Variety month – up from 45% in 2019. The number who 2019 2020 Narre Warrren North, VIC 3804 Stores bought at least one item every week more than doubled from 6% in 2019 to almost 16% in 2020. Secret Harbour, WA 6173 When mapped against Roy Morgan’s communities, Fashion these shoppers often fall into the Leading Eatons Hill, QLD 4037 & Apparel Lifestyles community. The households tend to be professional, and career and family focused. Frenchs Forest, NSW 2086 They don’t mind splurging on discretionary items, Home and typically fall into the Bluechip, Visible Success & Garden Dominant Helix personas Wakerly, QLD 4154 and Self-Made Lifestyles Helixes – a mix of young parents and mid-life families with above-average among new online shoppers: income who tend to live in their own homes in Jerrabomberra, NSW 2619 metropolitan areas. • Bluechip Health & Beauty All but one of the top 10 postcodes for regular • Visible Success Wattle Grove, NSW 2173 shoppers are in metro areas. Secret Harbour in • Self-Made Lifestyles the outer southern suburb of Perth, which took Narangba, QLD 4504 Hobbies & Recreational out second position, is the only inner regional Goods postcode. Unlike the new shopper cohort, which Mount Annan, NSW 2567 mainly hailed from Victoria, the top postcodes for regular shoppers are from all over Australia. Warrandyte, VIC 3113 Specialty Food & Liquor Top 10 locations by highest The delivery Regional Major City experience online shopping participation 20 Inside Australian Online Shopping 2021
ONLINE SHOPPING TRENDS Household participation in online shopping Contents Households Pandemic National Melbourne Melbourne Melbourne Sydney in millions declared restrictions Stage 3 Stage 4 restrictions easing COVID-19 State of easing restrictions eCommerce SA lockdown 5.5 3 days Online shopping 5.0 trends 4.5 Variety Stores 4.0 Variety Stores Fashion & Apparel Fashion 3.5 & Apparel Health & Beauty 3.0 Home & Garden Home Hobbies & & Garden 2.5 Recreational Goods 2.0 Specialty Food Health & Liquor & Beauty 1.5 Media Total households Hobbies & Recreational 1.0 shopping online Goods 0.5 Specialty Use our interactive Food & graph to explore online Liquor 0.0 shopping household participation. Visit: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec The delivery 2020 auspost.com.au/einsights experience 21 Inside Australian Online Shopping 2021
ONLINE SHOPPING TRENDS International supply chains Contents were disrupted in 2020 State of By June the impacts of rising COVID-19 eCommerce cases were being felt worldwide. Global eCommerce experienced severe delays Online shopping due to congestion in shipping lanes, disruption trends of supply chains, and the increase in businesses trading online. Australians once again turned to local retailers, with 57% of shoppers stating they Variety wanted to support local businesses, and 52% Stores stating that delivery from overseas was taking far too long.13 At the same time, 73% of small and medium Fashion & Apparel Australian businesses reported having to change how they operate, rethink supply chains and partner with local suppliers. It is expected this local focus will help build resilience, so businesses Home are better prepared to respond and adapt to future & Garden crises and challenges.14 Looking forward, a global survey found that 67% Health of participants agree that, ‘In future, I will buy more & Beauty online from e-retailers based in my country’.15 This points to resilience in the domestic market. Merchants will be keen to continue capitalising Hobbies & on the increased interest in local goods, and Recreational shoppers in turn have discovered the practical Goods and social benefits of buying local. Specialty Food & Liquor The delivery experience 22 Inside Australian Online Shopping 2021
ONLINE SHOPPING TRENDS eCommerce across Frequency of online shopping by country Contents the globe Once every 3 months 7.5% State of A study conducted across 25 nations eCommerce showed those shopping online more than once a week increased by 22% in Around 2-3 11.7% Online 2020 on average, up from 17% in 2019. times a year shopping trends In Australia, we exceeded this global average with an increase of 27% for the same period. In China, South Korea and India, where 26.9% Variety Stores eCommerce was already well established, more than 45% of consumers made an online purchase weekly.15 Once a month Fashion & Apparel Home 27.4% & Garden Once every Health 2 weeks & Beauty Hobbies & Recreational Goods Specialty Food & United Kingdom 26.5% Liquor United States South Korea Indonesia Germany Mexico Poland Japan China Spain India The delivery Italy Australia experience Once a week 23 Inside Australian Online Shopping 2021
ONLINE SHOPPING TRENDS Aussies shopped around Contents Australians quickly discovered more online options were open to them State of eCommerce in 2020. On average, regular online shoppers bought from a broader number of retailers. Online shopping trends Consumers are clearly becoming more comfortable engaging with the vast array of retailers they have at their fingertips – hunting down better prices or Variety offers. They aren’t afraid to buy from somewhere Stores new, with survey data showing that in August alone, one in five (22%) online shoppers purchased from a retailer they had never purchased from before. Fashion & Apparel Home Percentage of & Garden 22% regular shoppers who purchased from more than nine sources Health & Beauty 53% of shoppers purchased from 36% an online store Hobbies & Recreational that was new for Goods them in 202016 2019 2020 Specialty Food & Liquor The delivery experience 24 Inside Australian Online Shopping 2021
ONLINE SHOPPING TRENDS The buy local trend Contents gathered momentum State of Natural disasters, economic upheaval eCommerce and pandemic restrictions raised new challenges for businesses across Online Australia, particularly those in regional shopping 257,000 followers trends and remote areas. During summer, Australia was hit hard by #BuyFromTheBush Variety devastating bushfires that burned more than Stores 12.6 million hectares.17 A flurry of support emerged for local communities ravaged by the fires, with donations pouring in. As the crisis passed, Fashion attention turned to helping these communities & Apparel #SpendWithThem rebuild their homes and reinvigorate the local economy. There was a noticeable uptake in social media Home campaigns urging Australians to shop in local & Garden communities. For example, Grace Brennan’s #BuyFromTheBush campaign delivered $5 million to regional small businesses from its launch in October 2019 (before the fires) to 185,000 followers Health & Beauty June 2020.18 Other examples include Turia Pitt’s #SpendWithThem, the NSW government’s #BuyRegional and Visa’s #WhereYouShopMatters. Hobbies & Recreational Regional businesses could promote their products Goods for free via these campaigns, most of which are hosted on Instagram. Specialty Food & Liquor The delivery experience 25 Inside Australian Online Shopping 2021
During the height of the Contents Victorian lockdown, the State Government launched State of #ClickforVic eCommerce – a campaign designed to Online support local businesses. shopping trends Variety 31,000 posts Stores Fashion & Apparel Home & Garden Health 57% & Beauty Hobbies & Recreational Goods Specialty Food & Liquor of Aussie online shoppers want The delivery to support local businesses17 experience 26 Inside Australian Online Shopping 2021
ONLINE SHOPPING TRENDS How Aussies Online purchases more evenly Contents buy online spread throughout the day State of Australians used more devices than ever before Australians spent more time at home in 2020, eCommerce to go online. An average of 4.4 devices per adult often working more flexible hours. This may help to were used to access the internet in 2020, up from explain why afternoon purchases have risen by 2.7 4.0 in 2019.19 percentage points since 2018, while mid-evening Online purchases have fallen by 4.4 percentage points. shopping trends Between April and December 2020, 28% of purchases were made during the mid-evening, down from 31% in 2019. Variety Stores 91% 87% Fashion 76% & Apparel 69% 61% 60% 56% 48% Home & Garden 2019 2020 2019 2020 2019 2020 2019 2020 Mobile Laptop Tablet Television Health phone computer or Smart TV & Beauty Hobbies & 83% Recreational Goods of adult Australians used the internet for shopping in 2020, up from 78% in 2019* Specialty Food & Liquor The delivery experience * Adult internet users in the 6 months to May 2019 and June 2020 27 Inside Australian Online Shopping 2021
ONLINE SHOPPING TRENDS Payment methods Contents Buy Now Pay Later (BNPL) services grew in popularity. Market leader State of eCommerce Afterpay recorded a 15% increase in active customers during 2020.20 Online While the number of credit cards on issue shopping trends declined 9.2% to 18.4 million in November 2020,21 survey data shows a significant increase in credit card usage for online purchases. In fact, 34% of Variety respondents used a credit card to buy online, Stores an increase of 10 percentage points from 2019.22 This growth may be linked to the number of new online shoppers in 2020, who may have Fashion been less familiar with newer payment options & Apparel such as BNPL. Home & Garden 34% Health & Beauty Hobbies & Recreational Goods Specialty Food & of surveyed shoppers paid Liquor for an online purchase with The delivery a credit card in 202022 experience 28 Inside Australian Online Shopping 2021
Specialty retail categories Contents State of eCommerce Read on for online shopping trends for six key specialty retailer Online categories. You'll also discover how shopping trends Australian retailers have adapted, survived and thrived during Variety an incredible year of change. Stores Fashion & Apparel Home & Garden Health & Beauty Hobbies & Recreational Goods Specialty Food & Liquor The delivery experience 29 Inside Australian Online Shopping 2021
Paul Zahra, CEO of the Australian Retailers Association, reflects on the resilience of Australian retailers in Contents adjusting to the changing needs of consumers. State of eCommerce Retailers felt the full brunt of the The latest ABS figures show a 20% YOY increase Due to COVID-19, we’ve seen in household goods in January, and it’s far pandemic, and experienced a year outperforming the other retail categories. about ten years’ worth of trends in of enormous challenges as well as That spike is reflected in the half-year profit ten months – this is phenomenal! Online shopping opportunities. results some of the big retailers have reported trends recently and some businesses have even paid Hence, we expect to see retailers continue to We’re all looking forward to the rollout of the back the JobKeeper wage subsidy, given their reduce their physical footprint and invest heavily vaccines providing business certainty and success during the pandemic. in digital. Variety Stores stability, but overnight success is not guaranteed. More than 5.2 million households made an online Overall, retailers are approaching 2021 with The economic climate is still a challenging one for purchase in January – a 25% increase on the same fresh optimism. Our priority as Australians needs many retailers, with JobKeeper coming to an end time last year. to be on ensuring no one is left behind in our and international border restrictions still in place. economic recovery. Fashion & Apparel Overall, retail sales in recent months have been incredibly strong but it doesn’t paint a complete You only have to look at Australia picture of what the sector is going through. Post's data and insights to see The Australian Retailers Association is Australia’s Travel retailers, like those at airports and retailers how the dynamic has shifted. largest retail association, representing a $340 billion Home & Garden of both goods and services in CBD locations are sector employing more than 1.2 million people. The ARA works to ensure retail success by informing, struggling and are preparing to shed thousands With the incredible growth of online sales, protecting, advocating, educating and saving money for of jobs post JobKeeper. These businesses are its 7,500 independent and national retail members. and the move towards data-rich decision making Health in crisis – some have lost 90% of their revenue and artificial intelligence, future skills in retail are To become a member, visit www.retail.org.au & Beauty since the pandemic started and face a long road becoming more science based. back. The Australian Retailers Association (ARA) continues to advocate strongly to the Federal Having said that, brick and mortar stores still have Hobbies & Government for there to be ongoing targeted an important role to play – it’s where the bulk of Recreational support to help these deeply affected businesses. retail sales still occur – so store managers, sales Goods assistants and the like are still in-demand roles. At the other end of the scale, many retailers have done incredibly well through COVID-19, including Specialty those in household goods. With so many of us Food & Liquor confined to our homes during the pandemic, Paul Zahra and now choosing to work flexibly, people have Chief Executive Officer invested in household items like new furniture or The delivery office and tech equipment. Australian Retailers experience Association 30 Inside Australian Online Shopping 2021
Variety Stores Throughout 2020, many Australians eBay saw a significant rise in sales of puzzles and video games, and shoppers bought four times as much turned to online marketplaces to purchase running, yoga and training equipment than they had the Contents everything from appliances and fashion to previous year. Bike accessories more than doubled In terms of share of online toys and homewares. mid-year before spiking again in November. purchases, Variety Stores State of were the clear winners in 2020 Tim MacKinnon shares eBay's insights into eCommerce and captured 33% of the changing needs of the nation through the eCommerce market. the goods they were purchasing. Online shopping trends Category YOY growth 51.1% Variety Tim MacKinnon Stores Managing Director & VP eBay Australia and New Zealand Fashion & Apparel At a time of uncertainty, Australians were relying on online marketplaces like eBay to get what they needed. Nobody knew how consumers would respond when we Face mask sales were up more Home & Garden first entered this crisis, however eBay Australia saw an than 700,000% in March (not a extra million monthly visitors during 2020, bringing the total average to 12 million unique. typo), spiking again in July when These spikes in visitor levels are normally reserved for Melbourne went back into lockdown. Health & Beauty the weeks leading up to Christmas, but the busiest day of 2020 occurred in April. eBay saw another significant Consumer expectations are on the rise, and we will see rise in visitors during July when Melbourne went into its more people launching online businesses. Much of what Hobbies & second lockdown. Smaller increases were also seen as a we’re seeing today is just the very beginning of the next Recreational result of snap lockdowns in various states. reinvention of retail, and we expect to see elevated Goods eBay research shows 58% of people felt safer shopping eCommerce levels for the foreseeable future. online than in-store, and the increase in online shopping Specialty was largely driven by people having more time to Food & browse (75%) and being at home to collect deliveries Explore eBay’s insights and what these mean for the Liquor (75%). Australians also noted the financial benefits of future of eCommerce in their report online shopping, with 80% saying they can find better ‘Lockdown: One Year On’. deals and save money. www.ebayinc.com/lockdownreport The delivery experience Shopping behaviour reflects how Australians were feeling through the different phases of the pandemic. 31 Inside Australian Online Shopping 2021
Variety Stores 2020 Fashion & Apparel 7.3% Hobbies & Recreational Goods 6.4% eCommerce snapshot Home & Garden 10.3% 33% Contents Other 9% 6.8 mil State of share of all eCommerce online purchases Top 5 online Online shopping shopping locations trends households purchased online by purchase volume from Variety Stores in 2020 Variety Point Cook, VIC 3030 115.1% Stores Hoppers Crossing, VIC 3029 114.3% Fashion & Apparel Cranbourne, VIC 3977 98.7% YOY growth State YOY growth Craigieburn, VIC 3064 126.3% Home & Garden Victoria 77.6% Doreen, VIC 3754 168.6% Australian Capital Territory 48.7% Health & Beauty New South Wales 46.1% Metro areas 54.1% YOY growth Hobbies & Tasmania 40.6% Recreational Goods South Australia 38.5% Regional areas 43.9% YOY growth Specialty Queensland 38.2% Food & Liquor Western Australia 36.1% National YOY growth Northern Territory 20.5% 51.1% The delivery experience vs 57% YOY across all categories 32 Inside Australian Online Shopping 2021
Variety Stores 2020 eCommerce YOY growth Contents YOY growth of April August November online purchases State of Overall YOY growth hit 135%. Victorians drove strong November saw modest eCommerce Major & Discount Stores grew national growth. Overall overall category growth fastest, up 317% YOY. category growth was 79% at just 33% YOY. 350% YOY, with Major & Discount South Australia was the Stores growing over 240% fastest growing state, Online June YOY nationally and 602% up 48% YOY. shopping YOY in Victoria. trends End of Financial 300% Year Sales (EOFYS) drove growth of 156% Variety YOY in the week Stores 250% starting 14 June. Fashion & Apparel 200% Home 150% & Garden Health 100% & Beauty Baby Product Stores Hobbies & 50% Major & Recreational Discount Stores Goods Marketplaces 0% Online Specialty Discount Stores Food & Liquor Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec The delivery 2019 2020 experience 33 Inside Australian Online Shopping 2021
Fashion & When pandemic restrictions impacted Apparel retailers' foot traffic and even forced Contents them to close stores, attention shifted to connecting with customers online. State of The Fashion & Apparel category eCommerce Cue Clothing's Shane Lenton shares how came in second behind Variety their new online styling service is driving up Stores in 2020 – capturing 25.9% online conversion rates and order values. Online of the eCommerce market. shopping trends If you add fashion purchases from Variety Stores, the category rises to 33.3% share. Variety Stores Shane Lenton Our virtual stylist experience is Category YOY growth Chief Information Officer the culmination of years of tech 45.5% Cue investment. Fashion & Apparel At Cue Clothing, we've worked hard over the past few With so many people stuck at home, we quickly years to ensure customers can shop our entire range saw the need to deliver a more personalised online Home from an online experience. We call this the ‘Endless shopping experience. Even before the pandemic, & Garden Aisle’ because it removes out of stock frustrations for we had been preparing to offer a virtual styling service, online or in-store shoppers by fulfilling a purchase from so we accelerated its launch. There was great uptake any location, regardless of the order touchpoint. immediately, with incredible social engagement around the initiative. Sessions immediately booked out weeks Health As a result, when we had to close some of our stores & Beauty in advance and we’re still seeing conversion rates during lockdown, we were quickly able to turn them consistently over 60%, with average transaction values into ‘dark stores’ for online order fulfilment. This helped over five times higher than normal. keep our retail staff working and our local manufacturers Hobbies & in business. Post-lockdown life has shown that customers continue Recreational to value these reliable and convenient connection Goods As one of Australia’s largest local fashion manufacturers, points. While there may be some calibrations, the more we were also able to adjust our styles quickly to meet personalised shopping experience – whether it be the needs of the time. Our customers may have been in-store or online – I think it's here to stay. Specialty working from home, but they still wanted to wear Food & something great while on a Zoom call! Liquor The delivery experience 34 Inside Australian Online Shopping 2021
Fashion & Apparel 2020 eCommerce snapshot Fashion & Apparel 25.9% 33.6% Contents Variety Stores 7.7% 5.9 mil State of share of all eCommerce online purchases Top 5 online Online shopping shopping locations trends households purchased online from by purchase volume Fashion & Apparel retailers in 2020 Variety Point Cook, VIC 3030 92.9% Stores Cranbourne, VIC 3977 95.2% Fashion & Apparel Hoppers Crossing, VIC 3029 89.9% YOY growth State YOY growth Toowoomba, QLD 4350 51.0% Home & Garden Victoria 65.8% Craigieburn, VIC 3064 102.5% Tasmania 42.3% Health & Beauty Queensland 40.5% Metro areas 46.1% YOY growth Hobbies & Western Australia 39.3% Recreational Goods South Australia 38.6% Regional areas 44.3% YOY growth Specialty New South Wales 36.9% Food & Liquor Australian Capital Territory 35.2% National YOY growth Northern Territory 36.9% 45.5% The delivery experience vs 57% YOY across all categories 35 Inside Australian Online Shopping 2021
Fashion & Apparel 2020 eCommerce YOY growth Contents YOY growth of April May August online purchases State of Athleisure and Fashion The week of Click Frenzy's Highest growth in Women’s Fashion to date in 2020, eCommerce Accessories grew 120% YOY. May Mayhem (20 May) grew up 45% YOY for the month. Victoria grew 168% YOY. Unisex Fashion experienced a big 49.1% YOY. NSW accounted for The Click Frenzy Sports and Afterpay Day (20-21 August) jump, growing from 10% YOY in 36% of all Fashion & Apparel sales caused a jump in the third week of the month, March to 74% YOY in April. purchases for the month. with Athleisure growing 148% YOY for the week. Online shopping trends July November Variety Stores The week of Click Frenzy's The week of Cyber Monday Julove (22 July), grew (30 November), was the largest 73.7% YOY. Athleisure grew of the year and grew 42.8% YOY, 150% the fastest that week at followed by the week leading Fashion 122.5% YOY. to Black Friday (29 November), & Apparel which grew 54% YOY. Home & Garden 100% Health & Beauty 50% Hobbies & Athleisure Recreational Fashion Accessories Goods Footwear Unisex Specialty Women's Fashion Food & Liquor 0% Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec The delivery 2019 2020 experience 36 Inside Australian Online Shopping 2021
Home Spending more time at home than usual, On top of strong organic growth in retail we have plans & Garden to keep opening new store sites across the country. 2020 saw Australians settle into routines that This will only bolster strong online growth as physical Contents involved more home cooking and gardening. retail provides for greater brand exposure and helps build trust in our brand. Stores provide an avenue for easy returns of online purchases and strengthening The Home & Garden category Stephen Smith, GM Supply Chain and Store our offer through in-demand services, such as click and State of eCommerce took out third place for share Operations at Kitchen Warehouse, explains collect, being an omnichannel retailer certainly gives us a competitive edge. of online purchases, at 12.6%. what Australia’s cooking renaissance meant We were in peak season mode from March onwards, as for the omnichannel retailer. Australians embraced cooking at home. To support this Online A further 10.3% of all online purchases shopping increase in demand we were able to pivot and utilise trends were Home & Garden goods bought stores to fulfil online orders. This was an initiative we through Variety Stores. had earmarked for calendar year 2020 but were able to turn around what would have been a four-month project Variety in the space of four weeks. There’s a lot of moving Stores Stephen Smith Category YOY growth 69.6% pieces in there from the sorting of order allocation and GM Supply Chain and WMS logic, to new workflow processes in-store, and Store Operations additional logistics services. Australia Post supported this effort by activating 14 additional collection points Fashion Kitchen Warehouse & Apparel for our parcel service. This enabled us to ramp up our throughput and keep customers happy by avoiding At Kitchen Warehouse we want to be the one-stop major despatch and shipment delays. shop for Australian’s cooking and entertaining needs. Home & Garden This means delivering a world-class experience and offering the largest range of quality products. When COVID hit there was definitely I guess you could call us the Bunnings of kitchenware! a fear of the unknown around how We are a family run business and the owners have a we would be impacted but in reality, Health & Beauty heritage in the service and hospitality industry. we saw a sharp uptick in sales. About 20 years ago they began with one retail store and grew from there. In 2016, the business merged with the established online company, Kitchenware Direct, run by It’s been very successful. We’ve certainly seen some Hobbies & family member and now CEO Peter Macaulay – with the reduction in freight costs but also some real wins in Recreational terms of customer experience. There’s more work to be Goods purpose of strengthening our offer to consumers as an omnichannel retailer and expanding nationally. done here although we have seen that fulfilling orders from locations nearer to our customers reduces order Specialty turnarounds by several days. Customers are loyal to Food & brands that deliver the right experience. Being able to Liquor innovate and form the right partnerships, I believe has not only allowed us to acquire new customers over this period but retain them into the future. The delivery experience 37 Inside Australian Online Shopping 2021
Home & Garden 2020 eCommerce snapshot Home & Garden retailers 12.6% 22.9% Contents Variety Stores 10.3% 5.4 mil State of share of all eCommerce online purchases Top 5 online Online shopping shopping locations trends households purchased online by purchase volume from Home & Garden retailers in 2020 Variety Point Cook, VIC 3030 143.8% Stores Cranbourne, VIC 3977 148.6% Fashion & Apparel Hoppers Crossing, VIC 3029 144.6% YOY growth State YOY growth Toowoomba, VIC 4350 71.8% Home & Garden Victoria 101.4% Craigieburn, VIC 3064 180.5% New South Wales 63.8% Health & Beauty Australian Capital Territory 63.1% Metro areas 76.3% YOY growth Hobbies & Queensland 58.1% Recreational Goods Tasmania 57.2% Regional areas 57.2% YOY growth Specialty South Australia 54.2% Food & Liquor Western Australia 46.1% National YOY growth Northern Territory 31.7% 69.6% The delivery experience vs 57% YOY across all categories 38 Inside Australian Online Shopping 2021
Home & Garden 2020 eCommerce YOY growth Contents YOY growth of April May August November online purchases State of Homewares & Appliances grew Click Frenzy’s May Mayhem During Victoria’s lockdown, NSW and Queensland saw strong eCommerce the fastest, at 139% YOY for the (20 May) event drove 96.4% Homeware & Appliances growth of 70% YOY and 65% YOY month. Consumer Electronics & YOY growth for the month. accounted for two in five respectively. Pet Products recorded Telecommunications hit its peak Growth peaked at 145% YOY purchases nationally and its biggest growth of the year, up 90% of the year, growing 108% YOY. the week of Afterpay Day recorded 137% YOY growth. YOY. Online purchases from Home & Online (20-21 May). Garden Stores grew 48.4% in the week shopping of Cyber Monday (30 November). trends 150% Variety Stores Fashion & Apparel 100% Home & Garden Health 50% & Beauty Consumer Electronics & Telecommunications Hobbies & Recreational Homewares & Goods Appliances Pet Products 0% Specialty Tools & Garden Food & Liquor Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec The delivery 2019 2020 experience 39 Inside Australian Online Shopping 2021
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