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E-commerce

This is what Australian shoppers buy online

Australian consumers are embracing the ease and convenience of online shopping, increasing both their spending per online transaction and purchasing more frequently than ever before.

This was the conclusion of a recent analysis conducted by e-commerce software provider Neto, which used real transaction data from more than 1,000 e-commerce retailers selling across 10 different product categories.

Presented in Neto’s 2017 Year in Review report, The Changing Face of Retail in Australia, the data show that Australians are spending more in each online transaction than ever before with the average basket value growing 16 per cent across sectors in 2017.

“Constantly acquiring customers is costly, but maximising basket value and in many cases multiplying the profit margin on every sales transaction, is a smart strategy retailers can implement,” said Ryan Murtagh, CEO and founder of Neto.

This is what Australians are buying online, according to the report:

  • 47 per cent – Tools and Hardware

This category is experiencing rapid growth with the highest average basket value of all industries at $292.18 and the fastest monthly growth rate over the year, at 6.7 per cent month on month. This industry also had the highest yearly growth rate of 47 per cent and the third highest average monthly sales at $45,700.

  • 39 per cent Toys and Hobbies

This category has largely shifted online, with a 39 per cent increase in spending online from $82.17 to $136.41 per transaction. Buy Now Pay Later methods for toys and sales also rose by 12 per cent over the year. 22 per cent of shoppers said toys were their most frequent purchase.

  • 34 per cent – Food and Alcohol

This category had a 34 per cent increase in average basket size to $150.13. 17 per cent of consumers said food and alcohol was their most frequent purchase online, with men buying slightly more, and more often, than women.

  • 18 per cent – Fashion

40 per cent of consumers said this category (clothing, shoes, handbags, swimwear, accessories) is their most frequent online purchase. Consumers are spending more in each transaction too; average basket size increased by 18 per cent over the year to $123.39 – the most consistent growth of all industries.

  • 13 per cent – Gifting

Women buy gifts online more than men. The average basket size grew to $127.78 up 13 per cent. Gifting was the highest performing of all sectors by monthly sales figures.

  • 12 per cent – Homewares and Furniture

The average basket size of online purchases with Neto merchants in this category grew by 12 per cent in 2017 to $178.

  • 10 per cent – Pets

Aussies also spend almost as much on their pets as their family and friends. An amount that appears to be on the rise, with merchants in this category reporting a 10 per cent increase in average basket size over the year to $121.79 (only $6 less than what we spend on gifts).

  • 9.9 per cent – Sports and Recreation

This was another high performer in terms of average monthly sales and with a 9.9 per cent increase in average basket to $148.16.

  • 6 per cent – Supplements and Nutrition

Average basket size of this category grew by 6 per cent over the year to $73.24.

  • 3 per cent – Electronics and Hi-Fi

Neto merchants in this sector saw a 3 per cent increase in average basket size over the year to $119. Consumer data shows that electronics are the second most frequently purchased item online (35 per cent) after clothing and fashion (45 per cent).

  • 2 per cent – Motor Parts

Growth accelerated a little more slowly than other industries at just 2 per cent growth in average basket size over the year to $163.78.

 

Opportunity for bricks-and-mortar

The report reveals consumers increasingly expect a seamless and personalised experience across all retail channels, be it online, in a store, on social media, via an online marketplace or through a mobile phone.

Nearly two-thirds of shoppers said they search for products online after having seen them in-store, and 46 per cent expect retailers to be able to check the availability of stock online and then to purchase it – while at the counter – if they can’t it find it in-store.

“Ease and convenience remain the top priorities for consumers’ shopping experiences, and consequently so does an efficient fulfilment, shipping and returns process. The vast majority – 84 percent – of consumers still prefer to receive their goods at home,” said Murtagh.

Despite many pureplays pushing click and collect as an in-store option, only 3 per cent of people prefer this method, but Murtagh said consumers likely expect it as an option.

“The majority of shoppers surveyed also expected to be able to return/exchange an item in-store, send it back via post or both. They want options, and it needs to be super easy and convenient,” he said.

Rise of buy now, pay later

With 73.1 per cent of payments transacting through PayPal Express, this provider comes in ahead of credit card processors (22.35 per cent) and Buy Now, Pay Later methods (3.7 per cent).

Australians are also embracing new ‘Buy Now Pay Later’ payment methods, such as Afterpay, ZipMoney and ZipPay, with transactions (albeit growing off a small base) increasing by 147 per cent in 2017 and accounting for 3.22 per cent of the total transaction value.

Neto has seen a sharp increase in the number of merchants offering these services, particularly in the pets, sport, homewares and fashion sectors.

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