Australia has lagged other developed countries for ecommerce adoption for many years. As an Australian living abroad, this phenomenon surprised me every time I returned home to the motherland and attempt to make purchases online: options were limited, pricing wasn’t competitive, and I’d often have to – gasp! – pay for shipping.
But while the Australian government has advised residents to stay at home and restricting movement, more Australians are becoming accustomed to online shopping. The challenge now is whether merchants are equipped to handle the demand.
Brownes, a West Australian dairy company, recently announced a trial milk delivery service in its local area. This met two heightened needs for shoppers right now: delivery of an essential household staple, and the comforting nostalgia of a simpler time when the milkman made daily deliveries. The service instantly sold out.
Australia’s ecommerce market is dominated by eBay, Catch (a discount ecommerce marketplace), Amazon, and fashion marketplace The Iconic. When Amazon entered the local market in 2017, established retailers like Myer launched their own marketplaces, but these have generally struggled to gain market share.
MerchantSpring, an Australian marketplace consultancy, tracks website visitor traffic to the various marketplaces. Managing Director Paul Sonneveld says that some clients in some categories are seeing 300-400% growth in their online sales channels. “Australian shoppers are finally switching to online purchasing because it’s now a necessity – stores are closing,” he said.
Fashion marketplace The Iconic has seen a downward trend as purchasing shifts from discretionary purchases to essentials.
Merchant Spring analysis of website visitors to Australian ecommerce marketplaces. … [+]
Alex Perna, Key Account Manager of BRITA, says that Amazon has surpassed all the company’s sales objectives in the past two months. “We have seen an uplift over three times what we had forecast. My opinion is that over the next two months, sales on Amazon will continue to grow rapidly. I don’t foresee a slow down unless there are further restrictions put in place due to COVID-19.”
Shifts in buying behavior
Chris Hale, Marketing Director at Bare Blends, a company that makes natural protein powder, says that the company’s Amazon-fueled sales doubled from February to March, but that it would have been even higher if not for a two week stock-out on Amazon due to the unanticipated demand. “We also experienced a couple weeks of ‘panic’ buying which involved current customers buying in bulk to ensure they wouldn’t run out of our nutritional blends,” Hale said. The company then removed its bulk purchasing options to ensure its inventory could reach more people. He also noticed a large increase in the demand of the company’s immunity-boosting Bare Greens and Bare Mushroom products.
Stuart Diamond, Marketing Director AU/NZ for supplement brand Swisse, also noted changes in customer behavior over this period. Firstly customers are spending longer on product pages on the company’s ecommerce site, while customers seek out pertinent information and make the most informed decision.
The company has also seen an increase in online Health Care Practitioner and Customer Service interactions. “While the growth of online sales within the channel is accelerating, the category still connects to a principle of trust, so two-way communication especially with older members of the community to clarify usage and assist through checkout has an important role to play now and in the future,” Diamond says.
Finally, more people want to know about proactive health management rather than being reactive. “This is a sign of the times, but also a sign of the resilience of our community and their view on active steps towards health management,” Diamond says.
All online channels stand to benefit
Most Australian brands who employ a multi-channel online strategy say that sales have increased across all channels: on their direct-to-consumer website as well as marketplaces like Amazon. “The growth is a sign of increased category penetration rather than one retailer outperforming another,” Diamond says.
Bare Blends’ Hale agrees. “There’s been a natural shift towards online shopping especially over the last decade, but we suspect this will be the greatest push towards eCommerce the market has ever seen. People of all ages are now relying on online shopping and deliveries which will forge habits for the future.”