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Market Voice 10 May 2022 - 4 min read

Signed, sealed, delivered (for free): Key groups of shoppers within the millennial generation contribute over 40% of the online retail market - here’s how they choose where to spend share of $41bn

By News Corp | Partner Content

Understanding the specifics of the online shopping boom in Australia empowers brands to explore the levers that they can pull to push the consumer along their purchase journey.

Online retail has soared 28 per cent in the past 12 months, from $3 billion to $3.9 billion a month. Australians now spend more than $41bn a year online. News Corp Australia’s internally-led research is a deep dive into the nation’s e-commerce trends, and as News Corp writes, it looks closely at online shopping journeys and how Australian consumers make purchase decisions. This research is timely, based on the new digital and data product announcements at News Corp’s recent Decoded events, showcasing solutions that help to fuel transactions.

Online shopping is woven into the fabric of modern Australian life. From Black Friday sales through to same day delivery services, there’s a sensibility that Australian consumers have with spending money on the Internet in just a few clicks. In the past two years, since the start of the pandemic, online retail has boomed nationally. News Corp’s research is here to explain how and, more importantly, why.  

Understanding the specifics of the online shopping boom in Australia empowers brands to explore the levers that they can pull to push the consumer along their purchase journey, driving stronger results as the industry continues to grow and develop.

This internally-led research explores the e-commerce landscape using a two-pronged approach: the first piece is centred around online shopping, going deeper on segmenting Australian consumers and identifying the needs, online shopping behaviour and preferences of high-value audiences. The second piece focuses on retail therapy, looking at how Australia’s retail industry has transformed during COVID; illustrating the role content and content owners play in the consumer decision-making process.

The key stats:

  1. Overall retail turnover in Australia totalled $369 billion in 2021, up 6 per cent YoY (ABS, Retail Trade Australia. Based on seasonally adjusted figures).
     
  2. Online retail in Australia has jumped by 28 per cent YoY from $32.7 billion to $41.6 billion in 2021 (ABS, Retail Trade Australia. Based on seasonally adjusted figures).
     
  3. Key high-value cohorts of male and female millennials are leading the way for the online shopping boom (NCA 2021).
     
  4. These identified cohorts constitute only 13 per cent of consumers but contributed 41 per cent of the total spent online, excluding groceries (NCA 2021).
     
  5. Over 71 per cent of the high-value millennial cohorts believe that online articles are an important part of making their purchase decision (NCA 2021).
     
  6. Three in four online shoppers want a brand that they trust. This was a close second after ‘free delivery’ as the most important factor for consumers’ shopping online (NCA 2021).

Our online shopping research reveals millennials should be the #1 focus for eCommerce platforms which have become a world unto themselves. The online landscape is vast and dotted with huge stores with almost endless shopping potential. From Facebook’s Marketplace to the Instagram-aesthetic of DePop, our research uncovers insights to inform User Experience (UX) with an understanding of the journeys shoppers take – including the identification of which categories hold the greatest opportunity for brands. This is what we learnt:

The #1 focus is millennials. They are spending more than any other age group, shopping across the most categories and completing more transactions online. In fact, millennials constitute 40 per cent of the projected future e-commerce market with frequently shopped categories being fashion, vitamins/supplements, skincare and alcohol.

Delivery and fulfilment is the single most important factor for young audiences. Delivery is the number one factor in consumers’ minds, including things like speed, cost and delivery partners. It is critical that brands get these things right to ensure stronger results.

Our retail therapy research offers an in-depth exploration into how content drives and shapes Australian consumer behaviour – in particular, how consumers, brands and content interact.

In 2020 we witnessed a once-in-a-lifetime surge in online shopping due to global lockdowns caused by COVID-19. While traditional bricks and mortar retail suffered, Australia grew up fast. Online shopping went mainstream and almost all categories experienced growth over the past two years. 

The online shopping journey is messy. It takes more time, effort and touchpoints to make purchase decisions in the online world, relative to offline. This has only been heightened post-pandemic. Businesses need to understand which touchpoints matter to their consumers to drive the best results.

The research also found that consumers rely on heuristics – a problem-solving shortcut that allows for quicker choices – to aid in decision making. The reliance on heuristics is even greater when uncertainty and mental loads are high, helping consumers cut through the paralysis of choice.

Then we move onto the role of bricks and mortar in the new digital ecosystem. Do they have one? The answer is yes. Retail and online stores should be allies, not competitors. Regardless of whether transactions are being made online or offline, both presences provide a direct connection to the brand. Businesses should leverage physical stores as a media platform with an increasingly top-of-funnel role.

Finally, the research uncovered a tectonic shift from Customer Experience (CX) to Business Experience (BX). CX is limited to the CMO or COO, whereas BX is a CEO priority to put the customer first in every aspect of a company's operations. It is now harder to stand out through customer touch points alone, meaning businesses need to avoid divisional silos to provide a customer-centric approach in every aspect of e-commerce. They also need to invest in insight and design research combined with big data to discover unique user-driven opportunities.

To find out more about News Corp’s new digital and data products that can help fuel transactions contact your News Corp representative or visit newscorpaustralia.com for more information.
 

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