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E-commerce

Biggest e-commerce stories of 2017

When looking back at 2017, it’s easy to pinpoint the biggest story of the year. For better or worse, the launch of Amazon in Australia occupied much of the e-commerce conversation over the past year.

From the announcement of Amazon’s impending arrival in April, to its eventual launch just a few weeks ago in December, there has been no end to the speculation about its impact on Australia’s retail sector.

But Amazon wasn’t the only big story in Australian e-commerce in 2017. The year also saw a veritable explosion in online marketplaces, with the launch of Catch Marketplace, MyDeal’s expansion, Myer Market and Esther Marketplace, among others.

Online sales events also well and truly arrived in Australia, while new technology – such as augmented reality and voice shopping – matured.

The year also proved that online retail that is not immune to the broader challenges causing many traditional retailers to go into administration.

Here’s a look at the five biggest e-commerce stories of 2017.

1. Amazon launches in Oz

Internet Retailing closely followed the story of Amazon’s launch in Australia, being one of the first to report that FBA – Amazon’s warehousing and shipping solution for marketplace sellers – would not be available at launch, digging into the moving target of its launch date, getting exclusive insights from Amazon Marketplace sellers and breaking the story of Amazon’s soft launch in November.

Now that the retail giant is officially open for business in Australia, it has become clear that Amazon will not be the death knell that some had predicted, at least not immediately. The company makes no bones about its single-minded pursuit of customer loyalty over the long-term. And some brands and retailers that sell on Amazon Marketplace will benefit from this strategy.

With FBA and most importantly, Amazon Prime, set to launch in 2018, this story is still unfolding.

2. The rise of marketplaces

Amazon was not the only marketplace story to develop in 2017. Online retailer, Catch, expanded its retail offering with the launch of Catch Marketplace in June, while MyDeal moved into new territory, with the launch of a new dedicated fashion marketplace in October.

Online fashion brand, Esther.com.au, relaunched as a marketplace in November, and, perhaps most surprisingly, department store stalwart, Myer, launched an online marketplace in November, expanding into new categories, such as outdoor furniture.

New entrants to the increasingly crowded marketplace space face competition from international giants, including Ebay, Alibaba and JD.com, which are already vying for the attention of desirable retailers and brands. How this will all play out remains to be seen, but some factors will be decisive, such as range, price, availability and shipping.

3. Major online sales events grow

Major online sales events have become more and more popular in Australia, and 2017 saw many more local retailers participate in overseas events, like Single’s Day, Black Friday and Cyber Monday, as well as home-grown events like Click Frenzy and Mayhem.

Analysts are divided on whether retailers ‘must’ participate in these sales events, but they all agree on the impact of the trend. The clustering of many sales in November has pulled the holiday shopping season forward, and in some cases, is causing retailers to burn through in-demand products or give up their margins with steep discounts.

One thing is clear: major sales events are increasingly moving online, and more and more customers are snagging deals on mobile devices.

4. New technologies become mainstream

Online retailers are no strangers to the rapid pace of change in technology, and this year was no exception. 2017 saw augmented reality (AR) and voice shopping – underpinned by the convergence of voice recognition software, natural language processing, artificial intelligence (AI) and connected devices – go mainstream.

Following the launch of Apple’s AR developer toolkit (ARKit) in September, Ikea and Redbubble were just some of the retailers to embed AR features in their mobile apps. Customers can now see what various products will look like in their own homes before purchasing.

Meanwhile, Ebay and Officeworks have tapped into Google’s AI assistant to let customers search for and purchase items online using just their voice. Recent research suggests nearly half of Australian consumers are ready to adopt the technology today.

5. Online retail not immune

The year was notable not only for e-commerce businesses that arrived and grew in Australia, but also for the number of retailers that collapsed. Marcs, David Lawrence, Herringbone, Rhodes & Beckett, Howards Storage World, Topshop/Topman, Surfstitch and Oroton Group were just the high-profile names to have appointed administrators in 2017.

This had an impact on e-commerce not only because nearly all of these businesses had an online retail component, but also because some online-only retailers – Surfstitch and Key & Lime – were among the failures.

These collapses cannot be explained by factors like too many stores with not enough foot traffic, and show that even as e-commerce continues to grow faster than retail as a whole, online players are not immune to the broader economic challenges in the market.

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