2021 ONLINE RETAIL State of - Impressive Digital
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State of
ONLINE RETAIL
2021This development led to
State of
a year that far exceeded
expectations; online retail
57%
This year offers a clear hit a record high, making up
Online Retail
opportunity for retail 16.3 % of the retail market
companies that have already and rivalling pre-pandemic
embraced eCommerce to eCommerce penetration
in 2021
continue growing, but it’s also levels in the United States and
a pivot point for the industry the United Kingdom. Over 80%
as a whole. Retail brands need ONLINE of all households went online,
to step up to the plate and PURCHASES including 1.3 million who didn’t
craft seamless, end-to-end GROWTH shop online in 2019. [1]
With the COVID-19 pandemic, experiences for customers to
2020 set a new baseline remain competitive. Those Here’s a look at just how
for online retail in Australia. that successfully enhance the monumental the shift to
Online shopping grew at an online shopping experience online shopping was in
unprecedented rate, first out are the ones that will appeal Australia during the first year
of necessity and later out of to 2021’s sophisticated online of the pandemic:
$50.46B
convenience. As a result, 2021 buyers and new converts.
is turning out to be another
winning year for eCommerce
sales. So far, five million
How did COVID
households are shopping
online every single month. [1]
To put this into perspective, Online purchases in 2020
change online Online sales didn’t simply increase. They
SPENT ONLINE
that’s slightly less than the grew by 57% year-on-year.
5.2 million households that
skyrocketed as soon as the pandemic
shopping
bought goods online in April Consumers in Australia
of 2020, during the burst of spent a record-breaking
online buying that occurred $50.46B online, up from hit. They then continued rising for the
when lockdown restrictions
started impacting the retail habits? $27.5B in 2018. [3]
remainder of the year and throughout
After rising at an average
67.1%
industry. [2]
Before the pandemic hit,
growth rate of 14.4 % from
March 2019 to February
the holiday shopping season.
e-commerce was already
2020, from March 2020
predicted to make up 12 -
to October 2020, total
13 % of the Australian retail image source: Australian
online sales averaged an
market in 2020. With lockdown Bureau of Statistics
restrictions and the closure increase of 67.1 %. [4]
AVERAGE ONLINE
of bricks and mortar stores SALES INCREASE
across the country – and the
world – consumers quickly
adapted, buying the things
they needed online instead of
in stores.
STATE OF
ONLINE STATE OF
RETAIL ONLINE
2020 RETAIL
2020Lockdown and
stores closures KEY TAKEAWAY:
An industry-shaking resurgence of in-store shopping
isn’t likely. While there will always be a need for in-store
On 11 March 2020, the in Australia. By December of shopping, more and more people are being introduced to
World Health Organisation 2020, 11,060 fashion stores and growing accustomed to buying online. Retail brands
declared COVID-19 a global closed in Australia. In the US, need to focus on their eCommerce strategies so they can
pandemic. Within a matter of 9,300 stores across all retail serve both online buyers and hybrid customers - those who
days, governments around categories closed. [7] want the flexibility to shop virtually and in person.
the world had introduced
measures to slow the spread These closures aren’t
of the virus. Australian Prime temporary. They are part of a
Minister Scott Morrison made movement that was already
the sobering statement on 23
March, “For many young and
happening worldwide. In
Buy local and other Paying
What factors
April of 2020, analysts at Wall
shopping trends
old, 2020 will be the toughest Street firm UBS predicted
year of our lives….There is no that 100,000 retail locations
attention to
drove this
three or four-week shutdown could close by 2025 because
that makes it all go away. No
short term solution to all of
consumers were already Shopping online wasn’t the only consumer trend to emerge
these trends
change?
shopping more online. They or accelerate during the pandemic. Some households were
this.” [5] pointed out that COVID-19
would simply accelerate this
forced to revaluate their buying habits and look for ways to
spend less. Another trend was a preference to buy local and is critical
Turning online is a natural
By mid-month, retailers
closed stores across
trend. [8] support regional businesses.
for retailer
response to stores closing
and people spending more
the country, at first, only
announcing short term
By accelerating the already
existing shift to online
The following chart by Statista shows how consumer shopping
behaviour changed as a result of the coronavirus pandemic in brands in
time at home, but there were
more factors at play. When
closures – New Balance
announced a 10-day closure
shopping, consumer
preferences and habits
Australia in 2020.
2021.
you look at the full picture on 17 March, and Mecca are changing faster than
of how COVID-19 impacted closed all stores on 30 March expected. Consumers are
retail shopping in 2020, it’s until at “at least the end of discovering how easy, secure, REDUCED SPENDING 43%
clear that a lot of the changes April.” Mosaic Brands, which and convenient buying online image source:
that happened last year will includes Noni B, Rivers, and can be. Retailers shouldn’t Statista
continue in 2021 and beyond. Katies, closed more than expect consumers to fully
1,300 stores and cut 7,000 return to their pre-pandemic
SHIFTED TO ONLINE SHOPPING 32%
employees by 25 March. [6] shopping habits once the
world is vaccinated and the
For those retail brands that virus is under control. PURCHASE IN SHOPS WITH HIGH
were already struggling to HYGIENE FACTORS ONLY
22%
maintain high numbers of
bricks and mortar locations
before 2020, the pandemic MORE LOCAL SHOPPING
30%
forced them to realign
their strategy, closing
many stores for good. The 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
fashion industry was the SHARE OF RESPONDENTS
retail category hit hardest
STATE OF
ONLINE STATE OF
RETAIL ONLINE
2020 RETAIL
2020Of the 1.36 million new online
shoppers, there were two
distinct groups, both of
which are known for being Two, it forced brands to
It helps that this retail
budget-conscious; pragmatic reassess their order and
Logistic challenges
brand wasn’t just
shoppers, mostly young and fulfilment partners, staff
adaptable during the
mid-life families who are numbers, and fulfilment
also had an effect
pandemic. It’s also the
aware of where their money practices. Retail brands
epitome of a socially
goes, and older households, hired more, adopted new
on online retail
During the coronavirus crisis, conscious brand,
often retired adults living in technology to help them ship
the buy-local movement built something consumers
rural areas. faster, and reevaluated their
up momentum with several are tilting toward more
supply chains.
successful campaigns. Another factor that drove this year. The Who Gives
a Crap founders started
Budget-conscious
The State Government changes both amongst To increase resilience,
in Victoria started the consumers and retail brands the company to address
KEY TAKEAWAY: supermarket giant
a major global challenge
shopping
#ClickforVic campaign, was supply chain disruption. Woolworths announced its
which generated 31,000 In March and April, practically – the lack of access to
To attract these new single largest investment in
posts. [1] #BuyFromtheBush the whole world went into basic sanitation and
online buyers, online logistics infrastructure in June
is still thriving, showcasing some level of lockdown hygiene products. They
The Australia Post coined 2018 retailers should consider of 2020, with plans to spend
small Aussie businesses on to attempt to contain the donate 50 % of their profits
as the ‘year of the sale,’ as using loyalty programs A$780 million to replace up to
Instagram, often artisans coronavirus. This lockdown to help build toilets and
consumers went online to find and regular discounts. As 1,200 employees with robots.
retailers like the Nebo-based led to a range of logistical improve sanitation in the
better deals on retail products. 2020 has shown, Aussie Australia’s Kmart temporarily
seller of handmade bath, problems for retail brands developing world.
[3] Since then, budget-aware consumers are willing to converted three stores into
shoppers have counted beauty, and lifestyle products, worldwide. ‘dark stores’ – essentially,
spread their wings and try
on e-commerce for value These Are A Few Of My bricks and mortar stores
out new products when
shopping options. Favourite Things. Shipping lanes became turned fulfilment centres to
shopping online if the price
congested, slowing down help retailers meet online
is right.
With many working less orders. Retail brands that demand. [9] KEY TAKEAWAY:
or having to make a job relied on overseas partners
change during the pandemic, KEY TAKEAWAY: struggled with supply chain Aussie toilet paper delivery Retailers who take the
and others spending more disruptions. And, with so many company, Who Gives a Crap, necessary steps to be
time helping their kids
navigate online school, some
Buy local is still To compete online, retail
brands need to be clear
businesses trading online,
keeping up with orders was
nearly doubled its team to
keep up with demand. It also
there for customers –
whether it’s through more
households had to tighten
their belts to weather the
going strong on what their values
are. Whether it’s offering
a huge struggle for some
companies, especially at first.
launched an email sign-
up programme to notify
streamlined fulfilment
services, a responsive
pandemic financially. In 2020, sustainable products customers when their product online experience, or value
Buying local was big in 2020. This had a two-fold effect. alignment – are primed to
financially savvy shoppers or supporting the local was back in stock. [10]
Almost 60% of online shoppers stand out in 2021.
across generations looked for community, making these
in Australia said they want to One, it pushed more Aussie
ways to buy what they needed values clear throughout The company saw a 1,100
support local businesses. [1] buyers to choose local
in an era of uncertainty. Over digital marketing channels increase in daily sales by
This shopping trend actually products because of the long
20% started buying from new can help engage socially mid-March and was able to
started the summer before wait times for international
retailers or trying out new conscious shoppers. donate $5.85 million across
when areas of Australia orders. Over 50% of online
products online. [1] six different charity partners
were devastated by massive shoppers said overseas because of their success
bushfires. Hashtags to delivery was taking too long. during 2020. By navigating
promote local businesses and [1] the sudden uptick in demand
help affected communities
and reacting quickly to serve
rebuild started taking off
customers, Who Gives a Crap
on social media, including
won over new customers
#WhereYouShopMatters and
and saw high online sales
#BuyRegional.
numbers in early 2021.
STATE OF
ONLINE STATE OF
RETAIL ONLINE
2020 RETAIL
202046%of 18 to 34 year-olds What about metro area and
plan on shopping more rural shoppers – which are
post-pandemic. most likely to stick with their
favourite online retail brands
For 35 to 54 year-olds, 38%
will keep up their online
in 2021?
Victoria saw the
buying habits in the future.
What’s remarkable about this biggest growth in
online retail – six
Those aged 55 and up shift in consumer behaviour
1/3
In metropolitan areas, is how persistent it has been
are less interested in
online spending grew by
of the top 10 online
in the latter half of 2020
Which
making a long-time shift
60 % from 2019 to 2002, and early 2021. Even low-
to eCommerce – only
and seven out of 10 online
shopping locations
17% expect to shop more frequency shoppers, those
consumers are
purchases were from who only made a handful
online once the risks of the
metro areas.
in 2020 were in this
coronavirus are, for the of online purchases from
buying online
most part, behind us. March to December of 2019,
For regional and rural
Aussie consumers state, up from three
more than doubled their
areas, year-on-year online online purchases over the
the most?
retail growth was 50.7
shopped online out of 10 in 2019.
same period in 2020. High-
%. Three out of 10 online frequency shoppers either
purchases came from
because of COVID-19 This may have more
maintained or increased their
these areas. [1] online shopping frequency
Aussie consumers shopped
more than they ever to do with COVID
online because of COVID Another demographic factor throughout 2020. [1]
-19 more than they ever online retailers should be
have before, and one-
third of Australians plan on
aware of is gender. While
one-quarter of consumers in have before, and one- -19 restrictions than
third of Australians shopping preferences.
maintaining these habits. Victoria saw the biggest
Australia are less likely to shop
However, when you unpack growth in online retail – six
in-store because of a positive
plan on maintaining
the consumer research, of the top 10 online shopping
experience online during the
it’s evident that this is a locations in 2020 were in this
pandemic, shoppers who
these habits.
generational shift more than it state, up from three out of
identify as male are less
is a widespread change. [1] 10 in 2019. [1] This may have
impacted. [1]
more to do with COVID-19
restrictions than shopping
preferences. Victoria enacted
the tightest lockdown
measures in Australia,
28% of women are less and most retail stores in
interested in returning Melbourne were closed for
in-store after a good months.
experience online
22% of men are less likely
to return to the in-store
experience
STATE OF
ONLINE STATE OF
RETAIL ONLINE
2020 RETAIL
2020H&M – Fashion
giant invests in its
digital efforts
To attract new
H&M is the world’s second-
biggest retailer. It has
Ecommerce customers,
thousands of stores across
accelerated more Crumpets by Merna
Crumpets by Merna
What are retail
the globe and is a household
name in many countries.
than anyone used social media
When the pandemic hit, the
– Wholesaler marketing. By
brands doing to could have
company experienced a When the government
steep loss- its first in decades.
turned retailer enacted restrictions on travel
building an online
thrive online?
In the third quarter of 2020,
sales had started picking up,
predicted before and dining out, the company’s
customer base dried up.
but they were still down by 19%
year-on-year. [11]
the coronavirus Qantas and Virgin started
cancelling orders, and cafes
presence with
Instagram and
Now a thriving eCommerce
eCommerce accelerated To get out of its COVID- became a retailer, Crumpets by Merna began shutting down.
other channels,
was a booming Sydney-
pandemic. This
more than anyone could induced slump, the retailer based company serving To survive, owner Merna
have predicted before the invested in its digital efforts, Taouk did a complete 180,
Ms Taouk was
the wholesale market in its
rapid change
coronavirus became a building up its online former pre-COVID life. 80% of taking her business online
pandemic. This rapid change presence with blog posts for to sell crumpets directly to
able to transform
its business was wholesale,
forced retail
forced retail companies to H&M’s online magazine. The mostly to airlines, cafes, and consumers. She partnered
rethink, reassess, and rebuild company also took steps with cultured butter maker
her business and
restaurants. [13]
companies to
their eCommerce strategies. to improve its supply chain Pepe Saya, who she shared
Here are some of the retail to increase the speed of factory space with in Sydney’s
brands that responded well to
the changes, which will help
deliveries and the availability
of inventory. The company’s rethink, reassess, south, and started offering
bundled orders with crumpets
continue serving up
them remain competitive in
2021.
chief executive, Helena
Helmersson, said in a New and rebuild their and condiments such as jam
and butter.
tasty crumpets to
York Times article in late 2020,
“More and more customers e-Commerce To attract new customers, Australians.
strategies.
started shopping online Crumpets by Merna used
during the pandemic, and social media marketing. By
they are making it very clear building an online presence
that they value a convenient with Instagram and other
and inspiring experience channels, Ms Taouk was able
in which stores and online to transform her business
interact and strengthen each and continue serving up tasty
other.” [12] crumpets to Australians.
STATE OF
ONLINE STATE OF
RETAIL ONLINE
2020 RETAIL
2020Kitchen Warehouse
– Appliance retailer
speeds up website
to increase sales So, where does online
retail go from here?
Another 2020 success story,
What can we There’s no question that
Australian shoppers are
Cue Clothing Cue Clothing, one of
Australia’s largest fashion
Kitchen Warehouse invested
in its website to ensure expect for the hooked on the flexibility
and convenience that
– Popular brands, already offered a
top-notch online experience
eCommerce buyers would
have a good experience. The rest of 2021?
eCommerce offers. 70%
want retailers to remain
retailer amps up before 2020. To deliver on their
‘Endless Aisle’ promise, the
appliance retailer worked
with Aussie tech start-up,
online, even when they
reopen stores. [17] And
personalisation to company turned several of its Experts predict that the
Peakhour, to enhance website a lot of the trends that
retail stores that had to shut COVID-19 outbreak will drive
security and performance. accelerated in 2020, such
drive conversions down during the pandemic eCommerce sales in Australia
As a result, the site runs 80% as buying local and a
into ‘dark stores’ and started at a compound annual
faster, and page load times willingness to try new retail
online using them as online order growth rate (CAGR) of 10.3%
are only three seconds. brands online to save
fulfilment centres. between 2020 and 2024, with
This enhancement enabled money, aren’t likely to go
online sales reaching $77.1
greater user engagement and away any time soon.
They also accelerated billion in 2024. [15] According
sales conversions. From early
the launch of their virtual to Big Four accounting firm
2020 to early 2021, Kitchen The way forward will entail
styling service to drive PricewaterhouseCoopers,
Warehouse saw 150% year- a mix of online and in-
more conversions with there will be a continued
on-year sales growth. [14] store experiences, making
personalisation. This strategy spike in demand for online
it more important than
turned out to be a huge retail products over the
ever for retail brands to
success. Social media next two years. After that,
merge the two and deliver
engagement went up, and companies should expect
a unified experience to
sessions for the virtual to see “sustained changes
customers. In 2021, expect
styling service booked out for in shopping behaviour.”
retail brands to take
weeks. Users of the service, To a point, this is simply
further steps to make
on average, spent five times because channel choices
the customer experience
more than normal buyers, become habitual. [11] What’s
seamless at every
and conversion rates were happening is, consumer
touchpoint. Expect more
consistently above 60%. [1] habits have the time to
investment into website
become deeply ingrained.
performance, social media
marketing, personalisation,
At the same time, Australian’s
and strategic initiatives
love for in-store shopping
to engage tomorrow’s
isn’t going to disappear.
digitally-savvy consumers.
Compared to their
counterparts in the US and the
UK, Aussie shoppers have the
strongest desire to visit bricks
and mortar stores to buy. [17]
STATE OF
ONLINE STATE OF
RETAIL ONLINE
2020 RETAIL
2020REFERENCES - Supplementary COVID-19 sourcingjournal.com/topics/ [10] T. Bennett, “Here’s how there are some winners during and beyond?,” 13 January 2021.
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list-retail-stores-closed-due- will-close-stores-and-ramp-up-
pandemic. digital-efforts-as-online-sales- [16] Marketing , “2020 changed
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[7] V. M. Young, “Year in Review: your store keep them in 2021
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Related Doors Shutter in 2020,” stores if business collapses,
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