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Insights into online retailing

Buying Online

Australia is seriously behind the rest of the world in online retailing according to new research by The Leading edge, Australia’s foremost insights consultancy. The report based on a survey of 1,215 Australians found the amount of people actively buying online has declined and those who aren’t buying already have no intention to start anytime soon. Whilst some may blame Australia’s lack of broadband functionality, the research shows the real reason for the decrease is traditional retailers standing in the way of their own success in the online retail environment.

Director of Retail at The Leading edge Phil Bonanno explains Many Australian retailers have deprived the online environment of serious investment and focus. Retailer sites in Australia are more than catalogue pages on the web. Few sell anything online and most offer no integrated services between stores and sites. Most websites lack innovation, fail to engage the consumer and offer nothing new or exciting. In effect, Australian consumers are being short changed and given no reason to alter their purchasing habits and spend more online. The Leading edge survey found the key barriers to further uptake were consumer’s fears regarding a retailer’s return policy and logistics (delivery charges).

If Australian retailers were serious about their online business, growth could be revolutionary rather than the slow paced evolutionary we are currently experiencing. Online is the fastest growing retail channel globally, so the opportunities for Aussie retailers are huge.

According to the most recent population survey by the Australian Bureau of Statistics, 61% of Australians shopped online during 2006/2007. The Leading edge survey found the Australians who are currently shopping online are doing so at the popular retailers set up specifically for online shopping. EBay took the top spot with 4 out of 5 Aussies who have purchased online admitting to using this website.

For Australian retailers wishing to be more effective online, The Leading edge believes a smart strategy would be to utilise online sites such as EBay, where consumers are already converging.

This strategy is better than investing in a stand-alone retail environment and all the associated resources needed to drive consumers to the site, commented Phil Bonanno. For the larger retailers the focus needs to be on significant changes in what they offer and how this is integrated with their store-based presence. Respondents to the survey demonstrated a willingness to consider purchasing more strongly in categories that are more ubiquitous and don’t necessarily carry a tactile need to drive purchase. Those categories include whitegoods, electronics and furniture.

For many traditional retailers who will not sell online, online growth could take a different form where the website drives consumers to the store with a higher intent to purchase. The leveraged online presences would also build loyalty to the retail brand and the categories sold. For example numerous overseas retailers have created blogs to allow conversations between their buyers and their customers so that real time views can be shared, possibly engendering a stronger bond and creating more brand loyalty, concluded Phil Bonanno.


Phil Bonanno, The Leading edge consultancy

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