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The first edition of the CommBank Retail Insights 2015 report has revealed several common perceptions and surprises about the state of retail in Australia after an in-depth survey of over 500 retailers around the country.
According to the report, Australia’s e-commerce landscape is dominated by the younger demographic and is relatively immature compared to the world. In spite of this, the report forecasts a boom period for online sales, which it says “will grow 20 per cent over the year ahead, reaching an average of nearly 40 per cent of sales by 2020”.
Here we share six key insights from the report, which reflect the areas of excellence and improvement in the Australian online market.
The survey reveals that the “average online transaction has increased from $37 to $42 in the last year, with a total average annual spend per shopper of $692, up from $627”. This means that with increasing trust and familiarity with online shopping, consumers are becoming comfortable spending more money during each online transaction, leading to an increase in basket size (average number of items in one online transaction).
The online shopping brigade is dominated by the under-30s, who account for 29 per cent of the market share and also have the fastest rate of spending growth at 21 per cent, says the report. This provides an opportunity for Australian retailers to not only target this high-yielding demographic, but also to tap into the large, but under-tapped audience of those over the age of 30 with campaigns aimed at building trust in online shopping.
Despite an enormous choice of outlets and products online, “90 per cent of shoppers transact with three or fewer brands online each quarter”, says the report. This behaviour suggests that consumers still prefer buying from brands they are familiar with and trust – a clear indication for smaller brands to focus on increasing brand loyalty through confidence-building tactics such as guaranteed returns and quality assurance.
Out of all the strategies to boost online sales, creating an outstanding customer experience remains a priority for online retailers, with 51 per cent spending money on improving the visualisation and usability of a website, according to the report. The second priority for a majority of online retailers is boosting sales through online promotions and search engine optimisation (SEO).
The report shows that the primary focus of Australian online retailers is on the domestic market, with only 21 per cent generating sales offshore. However, the retailers do perceive New Zealand and the Pacific region as promising markets, with many targeting them through localised offers, international shipping options and targeted marketing strategies.
Over the past five years, mobile usage has increased exponentially, which explains why 18 per cent of online sales now happen on a mobile device, with that proportion “tipped to double in the next 12 months”, says the report. But, in spite of the growing importance of mobile, “only 11 per cent of the retailers surveyed plan to invest in mobility over the next 12 months, with just 1 per cent saying mobility is their highest priority investment. This suggests a lack of preparedness in investing in an omni-channel experience for their customers,” says the report.