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Aussies spending more online, more often - report reveals

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Fuseworks Media
Fuseworks Media

A 2017 Year in Review report released today by Neto, on The Changing Face of Retail in Australia: State of eCommerce Report reveals Australians are rapidly embracing the ease and convenience of online shopping, increasing their spending per online transaction and purchasing more frequently in 2017 than ever before.

The report, the first of its kind in Australia, analyses real transaction data from more than 1000 eCommerce retailers selling across 10 different product categories ranging from toys to tools, fashion to furniture, pet supplies to health supplements. The report also examines responses from more than 1000 Australian active online shoppers about their shopping preferences, habits and expectations.

The report reveals that Australians are spending more in each online transaction than ever before with the average ‘basket value’ in 2017 growing across sectors at 16 percent. The three fastest growing ‘basket value’ product categories are Tools and Hardware (47%), Toys and Hobbies (39%) and Food and Alcohol (34%). Interestingly, Electronics and HiFi, the second most frequently purchased item online, only grew at 3 percent.

"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 Australian retail management platform, Neto. "Our report reveals that not only are Aussies spending more per transaction online, but the data tells us they are shopping online more frequently too. This is very good news for online retailers.

Australian shoppers want a seamless experience across all retail channels

"However, this doesn’t spell the demise of the bricks and mortar retail store," said Murtagh. "Today’s hyper-connected consumers research, try, buy and return products via mobile devices. They shop in-store, use a mobile phone to compare products online, have questions answered by a virtual sales assistant or a chatbot, and can purchase a competitor product before leaving a physical store."

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.

Sixty-four percent of shoppers said they will search for products online after having seen them in-store, and 46 percent 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. As a result, integrated technology across all channels that can manage stock and inventory in real time is absolutely critical.

"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.

"And despite many e-tailers pushing ‘click and collect’ as an in-store option, only 3 percent of people prefer this method. However, it’s likely that consumers expect this 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," Murtagh said.

Security Savvy Shoppers and the Rise and Rise of Buy Now, Pay Later

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

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% in 2017 and accounting for 3.22% of the total transaction value.

There are now 5,000 merchants in Australia offering Afterpay and over 700,000 Australians reaping the rewards of the service instantly. Neto reports a sharp increase in the number of merchants offering these services, particularly in the pets, sport, homewares and fashion sectors.

What are Australians buying online? Growth by Product Category:

- 47% - Tools and Hardware 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% month on month. This industry also had the highest yearly growth rate of 47% and the third highest average monthly sales at $45.7K.

- 39% - The Toys and Hobbies industry has shifted largely to ecommerce retailers with a 39% increase in spending online from $82.17 to $136.41 per transaction. Buy Now Pay Later methods for toys and sales also rose by a 12% over the year. 22% of shoppers said toys were their most frequent purchase.

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

- 18% - 40% of consumers say that Fashion (clothing, shoes, handbags, swimwear, accessories) are their most frequent online purchase. Consumers are spending more in each transaction too; average basket size increased by 18% over the year to $123.39 - the most consistent growth of all industries.

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

- 12% - The average basket size of Homewares and Furniture online purchases with Neto merchants grew by 12% in 2017 to $178

- 10% - 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 reporting a 10% increase in average basket size over the year to $121.79 (only $6 less than what we spend on gifts).

- 9.9% - Sports and Recreation was another high performer in terms of average monthly sales and with a 9.9% increase in average basket to $148.16

- 6% - Average basket size of the Supplements and Nutrition category grew by 6% over the year to $73.24

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

- 2% - Motor Parts growth accelerated a little more slowly than other industries at just 2% growth in average basket size over the year to $163.78

Neto’s thousands of customers have collectively generated over $2 billion in sales online. In 2017 Neto placed in the top 10 of the Australian Financial Review’s Most Innovative Companies, and CEO and founder Ryan Murtagh was named Brisbane’s Young Trailblazer of the Year.

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