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ARTICLE MarketingMay 21, 2014

Four trends shaping Australian e-commerce

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The amount spent online in Australia is only going one way: up. But is your business best placed to take advantage of the e-commerce revolution? We examine four trends shaping Australian e-commerce.

The retail industry has undergone huge change since the advent of e-commerce. The latest figures from the Australian Bureau of Statistics show income derived from internet sales in 2011–12 was $237 billion.

More people are choosing to go online to buy anything ranging from perfume to personal training sessions, and many Australian bricks-and-mortar retailers now have an online presence to capture a piece of the rapidly growing e-commerce industry.

Trend 1: E-commerce winners and losers

Richard Mann, former CEO of SecurePay and Head of Payments at Australia Post, believes the most successful online retailers sit in two camps.

“They’re either selling huge numbers of commoditised goods, or selling niche products that are rare and valuable but not necessarily scalable.”

According to NAB’s Online Retail Sales Index for January 2014, the most successful e-commerce industries in Australia are: homewares and appliances; fashion; department and variety stores; and media (comprising books, CDs and DVDs).

There has been an increase in online grocery sales in Australia, but it has been slow to take off. “There is a movement of knowing where your food comes from and knowing how far it’s travelled to get to you,” says Mann.

“I don’t think people are necessarily interested in buying foods online and I think the trend is more ‘I’d like it locally in a brown paper bag rather than from miles away in a box.’”

Trend 2: Brand trust outweighs price

Australian consumers are attracted to e-commerce due to its convenience and variety. While price is an important factor, Mann says trust in a brand is starting to outweigh the attraction of lower prices.

“Now it’s more about ‘What is the online business’s brand worth?’” he says.

“You need to ask whether your brand is strong enough to engender trust and enable a customer to go through with a purchase, or whether you are simply used as a price comparison point. It’s a challenge for businesses and I think businesses are looking for ways to augment trust.”

Mann adds it was once enough for businesses to display an SSL (Secure Sockets Layer) certificate on their website to show consumers they could be trusted. “Now people just expect that you have security, so they’re asking, ‘Well, who are you? Are you going to deliver it, and if something goes wrong, what are you going to do about it?’”

Trend 3: Personalised shopping experiences and products

Just like bricks-and-mortar businesses, online retailers that adopt an innovative approach are likely to attract the attention of shoppers.

Providing a personalised experience is a trend shaping the future of e-commerce.

With so much data available about customers’ likes and behaviour, retailers can now show a depth of care and understanding by personalising every message and curating content to suit each customer’s needs. It’s like providing them with a personal shopping assistant every time they visit your website.

Another way of personalising the e-commerce shopping experience is to allow shoppers to express their individuality and customise their own purchases.

This is a trend that has been adopted by global giants such as Nike, as well as emerging retailers such as Shoes of Prey . This Australian e-commerce business allows its customers to digitally design their own pair of shoes, selecting style, shape, heel height, materials and colours.

Trend 4: Mobile e-commerce

Thanks to mobile technology, Australians can now shop anywhere, any time.

Information technology research company Gartner predicts global mobile transaction volume and value will increase by an average of 35 per cent each year between 2012 and 2017. It also estimates the mobile e-commerce market to be worth $721 billion, with more than 450 million users by 2017.

“A lot of thought is going into mobile payments at the moment, whether that means being mobile while you make a payment or using your mobile to make a payment,” says Mann. “If you can find something that’s genuinely useful buying through a mobile, then you might be in with a chance of real success,” he adds.

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