Australians’ online shopping baskets hit a record A$63.8bn

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Australia Post has released its 2023 Inside Australian Online Shopping Report, which reveals that 9.4 million Australian households shopped online in 2022, spending A$63.8bn (US$ on online goods, meaning online shopping now makes up over 18% of all retail sales in the country.

This year, Aussies spent the most on home and garden (A$18.7bn [US$12.4bn]), a category that traditionally has more expensive items like furniture and electronic goods. However, the overall growth was driven by increased spending at food and liquor stores (A$13.1bn [US$15.9bn]) with YoY growth of 11.4%, as well as variety stores (A$11.6bn [US$7.69bn]) with YoY growth of 8.6%.

Across the country, Queenslanders created the strongest YoY growth in the number of online purchases than any other state (11.1%), followed closely by West Australians (11.0% YoY growth). Aussies in remote and regional Australia continued to embrace the online shopping trend. However, New South Wales, Victoria and the ACT came out of lockdown ready to spend big in-store.

While today’s online shoppers are comfortable sharing their dollars across retailers, it’s clear that cost-of-living pressures continue to take effect and overall consumers are more cautious in their spending, creating short-term headwinds for retailers in 2023.

Australia Post also conducted an e-commerce case study to support these findings. According to the company, Australian pet ownership reached a record high during the Covid-19 pandemic and Australians now have the highest pet ownership in the world. With two out of three Aussie households owning a pet, pet products were the largest growing online category in 2022. With pet owners needing to regularly replenish their pets’ food and treats, the report highlights that this is an industry that benefits from subscription-based models. Woolworths and Petsure saw this opportunity and created PetCulture. The companies claim that their subscription approach is a unique customer offering aimed at attracting and retaining customers.

Simon Smith, leader of the pack at Pet Culture, commented, “To build an effective e-commerce subscription model, make it flexible, easy to use and value-adding. To make it flexible, give shoppers confidence they aren’t locked in. PetCulture’s auto-delivery model allows customers to cancel or change their auto-delivery at any point. It can take a while to understand how often households are going to need pet food or treats, so allowing people to easily adjust the frequency is important. PetCulture has built a great site that’s easy to use, putting a big focus on how well it performs on mobile devices too. Stand out by adding value. Give customers extra value to stand out from competitors. In PetCulture’s case, it’s a 10% discount on recurring orders, bonus Aussie Hazard Cover for pets, access to free 24/7 vet advice and 2x Everyday Rewards points.”

Gary Starr, executive general manager of parcel, post and e-commerce services at Australia Post, said, “While e-commerce had moderated with the opening of stores, the shift in the way we work, live and shop is here to stay. Aussies’ love affair with online shopping has not waned, even with restrictions removed. One million more households are now shopping online compared with 2019, and 5.6 million households made online purchases every month during the past year. Australians are shopping online more often, with 37% shopping fortnightly compared with 20% pre-Covid. The growth trend in online was steady prior to Covid-19 but spiked during restrictions; now it’s showing a return to normal trend growth. By 2033, we expect around one in three dollars will be spent online.”

Craig Woolford, lead analyst at MST Marquee, said, “The online environment makes it easy to cross-shop and compare to find the best price, which can reduce customer loyalty. What good online retailers are doing is trying to entice their customers to stay with their platform. That could be via a subscription or other forms of rewards and points to create loyalty, consistency and, in return, repeat purchases.”

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