Inside Australian Online Shopping - 2017 eCommerce Industry Paper - Online shopping trends in Australia

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Inside Australian Online Shopping - 2017 eCommerce Industry Paper - Online shopping trends in Australia
Inside Australian
Online Shopping

2017 eCommerce Industry Paper
Inside Australian Online Shopping - 2017 eCommerce Industry Paper - Online shopping trends in Australia
Contents                                                                                          About this paper
About this paper		                                   2    Industry overview                       This Inside Australian Online
                                                                                                  Shopping report offers insights
                                                            Department & Variety Stores		    13
Contents			2                                                                                      into the delivery of goods bought
                                                            Fashion			                       19   online in 2016 – it’s based on:
Foreword			3                                                Health & Beauty			               25

                                                            Hobbies & Recreational Goods		   31     A subset of Australia Post
Executive summary		                                  4                                              data, collected between
                                                            Homewares & Appliances		         37     January 2015 and December
                                                                                                    2016, from across our nation-
eCommerce overview		                                 5      Media			                         43     wide network of 11.5 million
                                                                                                    delivery points, aggregated
What’s making us buy online?		                       5      Specialty Food & Liquor		        49     to postcode level.

Consumer trends			                                   5    Methodology & references           55
The state of Australian eCommerce		                  7                                                                Reported figures
                                                          Contacts		                         58                       are for the 2016
What are Australian’s buying online?		               9
                                                                                                                      calendar year. YOY
Where are Australian’s buying online?		              11                                                               figures compare to
                                                                                                                      2015 calendar year.
eCommerce events			                                  12

Inside Australian Online Shopping © Australia Post
Inside Australian Online Shopping - 2017 eCommerce Industry Paper - Online shopping trends in Australia
Foreword

The Australian economy has broken a world            Together, Australia Post and StarTrack deliver
record. We have claimed the title of 104 quarters    more than four billion items to 11.5 million
of growth without a recession. This achievement      addresses across the country annually. Our vast,
of long term economic expansion has created a        nationwide processing and delivery network has
strong retail environment, where demand for a        enabled us to deliver the data-driven insights
broad range of products at a competitive price       contained in this paper. The 2017 report provides
has benefited online retailers across the country.   an in-depth look at online shopping and delivery
                                                     trends across Australia; growth patterns and
Australian consumers’ expectations around
                                                     insights on popular products to buy online,
convenience, value and choice have driven a
                                                     where the nation’s top online shoppers live
higher proportion of the population to shop
                                                     and predictions for future growth areas.
online more frequently. This is a world where

                                                                                                         +4bn
people simply expect to access information,          We’ve created this report to act as a powerful
products and services, at the touch of a button.     tool for you and your business, by aligning
                                                     eCommerce data and insights with our growing
The online shopping industry                         and transforming economy.
continues to grow both domestically
and globally. Here in Australia,                                                                         items delivered
we also know that it’s about to be

                                                                                                         11.5m
disrupted, and retail as we know it
                                                     Ben Franzi
won’t ever look the same.
                                                     General Manager,
So how do local retailers remain successful in the   eCommerce & International
lead up and during this transition? The second                                                           delivery addresses
edition of Inside Australian Online Shopping
will arm your business with information, data
and insights, which are the most powerful
asset to ensure you maintain your competitive
advantage in the marketplace. Understanding
the changing expectations around customer
experience and differentiating your business
in the market will help keep you ahead of the
competition.

Inside Australian Online Shopping © Australia Post
Inside Australian Online Shopping - 2017 eCommerce Industry Paper - Online shopping trends in Australia
Executive Summary

Ever checked out a product in-store before              demographic. But millennials, specifically those
heading home to buy it online instead?                  25 to 35, now make up a large proportion of the
You’re not alone. Our insatiable appetite for           population. Growing up with the internet, millennials
online shopping continues to grow, with online          will heavily influence the future of online shopping.
purchases up 11.5% compared to last year.               Retailers are evolving quickly to cater for this
Australian shoppers are making the switch               demographic shift and the expectations that
for many reasons – including better prices,             come from these savvy shoppers.

                                                                                                                                                16     %
easier comparisons, more variety and just
                                                        The Department & Variety Store and Fashion
pure convenience.
                                                        categories still sit in the top positions. Collectively,
Australians already familiar with shopping online       they make up more than half of all online purchases
are also doing it more frequently. Over the last        and both recorded solid growth rates of 7%
12 months, we’ve seen the number of parcels             and 17% respectively. The Media category                                    The number of parcels
generated by an online transaction increase             has seen notable growth this year too, up 23%.
                                                                                                                                    generated by an online
by an average of 16% per shopper.1 It’s likely          The continuing shift from physical bookstores
that a major driver of this acceleration has been       to online book purchases appear to be the                                   transaction has increased
the increased sophistication of online retailers.       major driver here.                                                          by an average of 16%
Businesses are creating strong brand loyalty
                                                        In terms of the geographic split, metropolitan                              per shopper
and product familiarity, while providing better
                                                        areas contributed to the majority of growth. And
services, improved online experiences, and
                                                        thanks to strong economic conditions, Victoria
more convenient return and delivery options.
                                                        and New South Wales had the highest rates of
Growth in online spending outperformed                  growth in the country.
bricks-and-mortar retail by 6.9 percentage
                                                        Although buying behaviour has remained
points last year. While this is a significant
                                                        positive, overall growth figures have tapered
difference, it’s worth noting that traditional retail
                                                        when compared to 2015. The online shopping
is still a huge industry in Australia, bringing in
                                                        sector has reached a level of maturity and is
$261 billion2 in 2016 compared to online retail’s
                                                        now widely considered an established channel.
$18 billion in physical goods.10
                                                        However, the imminent entry of a new player
Research shows that over a three month period,          into the Australian domestic market is likely
9.7 million Australians shopped online.3 Baby           to raise the standard and demand for online
boomers still hold the spending power, enjoying         shopping.
the highest disposable income of any
                                                        1
                                                            ustralia Post Consumer Survey 2016
                                                           A
                                                        2
                                                           Australian Bureau of Statistics (ABS) Retail Turnover
                                                         3
                                                            ABS Household Use of Information Technology, 2014-15
                                                        10
                                                             Online Physical Goods Index is a sub-set of NORSI. NORSI is sourced
                                                              from NAB and Market Blueprint. NAB and Market Blueprint take
Inside Australian Online Shopping © Australia Post            no responsibility for the accuracy of the information shown.
Inside Australian Online Shopping - 2017 eCommerce Industry Paper - Online shopping trends in Australia
eCommerce overview

What’s making us buy online?                                                                               Consumer trends
Online retailers are a blessing for many             So what are we buying? In general, online             Are there still barriers to online shopping?
Australians – especially those living remotely,      shoppers tend to pick up goods based on wants,
                                                                                                           Research conducted in 2016 shows that many
or in areas with limited access to conventional      rather than needs. This kind of discretionary
                                                                                                           of the issues once considered barriers to online
bricks-and-mortar stores. Increasingly, customers    spending has a range of influences. Two major
                                                                                                           shopping are becoming less significant.1
are heading online to find their everyday            motivations are the broader range of products
essentials at better prices, with buyers in remote   available and the convenience of shopping where       Since buying online often means not seeing
regional locations and tourist towns shopping        and when it suits best.                               products until they’re delivered, returns was
online the most.                                                                                           cited as the main barrier. Retailers are
                                                     Retailers who are investing in digital innovations
                                                                                                           responding with well-defined return options,
Similarly, new housing estates make a big            and focusing on customer experiences are seeing
                                                                                                           giving customers more confidence when
impact online. As new families move into these       their efforts pay off. Shoppers are more informed
                                                                                                           shopping online.
areas, they often head online to furnish their new   than ever – with information, reviews, and
home. Point Cook in Melbourne’s outer-west is a      comparisons at their fingertips – making it crucial   Some consumers also cite delivery as a problem
prime example. It’s one of the largest-growing       for retailers to deliver on their expectations.       – since it can be difficult to arrange a home
suburbs in Australia, and tops many of the lists     Strong returns policies and improved delivery         delivery time that’s convenient. Carriers and
in this report.                                      options have further encouraged the uptake of         retailers are responding by providing alternate
                                                     online shopping, offering consumers peace of          delivery options, including in-store and other
                                                     mind and convenience.                                 collection points. An increase in tracking
                                                                                                           notifications has also been well received by
                                                                                                           consumers, with over two-thirds rating this
                                                                                                           service either valuable or extremely valuable.

Inside Australian Online Shopping © Australia Post
Inside Australian Online Shopping - 2017 eCommerce Industry Paper - Online shopping trends in Australia
Key consumer trends

                                                                       Buying behaviour
                                                                       Consumers are tending to shop online
                                                                       later in the day, with 29% of purchases
                                                                       made between 7–10pm. A further 18%
                                                                                                                                                 52        %
                                                                                                                                                   increase in
                                                                       occur between 2–5pm.                                                         purchases
                                                                                                                                                     YOY via a
                                                                                                                                                 mobile device

      Personalisation
      Demand for personalised
                                                                                            29      %
                                                                                            of purchases are
                                                                                                                 Trending devices
                                                                                                                 Online shopping via a mobile
      products increased by 28.2%                                                           made between         device is increasing at an

                                                                        18
      in 2016. More and more online                                                         7–10pm               impressive rate, up 52% from
      retailers are offering consumers                                           %                               2015. However, most online
      the ability to co-design and                                                                               shopping is still done on
      add personal touches to their                                                                              desktop or laptop computers.
      products and this is steadily                                      of purchases are
                                                                         made between                            Desktop and laptop purchases
      increasing.
                                                                         2–5pm                                   have declined at 10% and 6%
                                                                                                                 respectively, while shopping
                                                                                                                 via mobile is building from a
                                                                                                                 low base.

                                                     28.2
                                                     growth in
                                                                   %

                                                     personalisation

Inside Australian Online Shopping © Australia Post
Inside Australian Online Shopping - 2017 eCommerce Industry Paper - Online shopping trends in Australia
The state of                                                                                        2016 total online spend
     Australian                                                                                          $21.7bn
                                                                                                                                   Total spend on
     eCommerce                                                                                                                     physical goods

     In 2016, Australian’s spent $21.65 billion shopping
     online across both physical goods and digital                                                         10.4       %            $17.7bn

                                                                                                                                    10.2
     services (music and video streaming, and
     takeaway food services). This is a total increase                                                                                          %
     spend of 10.4% compared to 2015.4 Spending
     online on physical goods (excluding digital
     services) rose by 10.2% to $17.7 billion, an 82%
     share of the total online spend.10

     Growth in online spending significantly
     outperformed traditional retail
     spending, up 10.2% compared to 3.3%.

                                                                                                21
     Despite international access, domestic purchases                                                  %
     still make up the majority of online spending in
     Australia. At the end of 2016, domestic spend
                                                                                                Spend on
     represented 79% of the online market, showing                                              International
     a growth rate of 11% compared to 7.3% for                                                  products
     international spend.10

                                                                                                      7.3%
                                                                                                                                                    79     %

                                                                                                                                                     Spend on
                                                                                                                                                     domestic
                                                                                        Share of                                                     products
                                                                                        Australia’s
                                                                                        online
4
      ll Online Retail statistics are sourced from the NAB Online Retail Sales Index
     A
                                                                                        spend                                                       11%
     (NORSI).
10
     Online Physical Goods Index is a sub-set of NORSI. NORSI is sourced from NAB
      and Market Blueprint. NAB and Market Blueprint take no responsibility for the
      accuracy of the information shown.

     Inside Australian Online Shopping © Australia Post
Inside Australian Online Shopping - 2017 eCommerce Industry Paper - Online shopping trends in Australia
Online physical
    goods trends
                                                                National
                                                                average                                                                       12.1%
    The bulk of spending in Australia                           11.5%
    comes from the eastern seaboard                                                                                            10.7%
    – with over three quarters of online                                                                        9.6%
                                                                                   8.8
                                                                                     %
    purchases made in New South
    Wales, Victoria or Queensland.4                                                               6.8%
    While every state slowed in growth in 2016
    compared to previous year, better economic
    conditions in New South Wales, ACT and Victoria
    helped these states secure their places as the       Metro vs
    top three players for online shopping growth.        regional
                                                         growth
    Overall, metropolitan growth was stronger                                   VERY             REMOTE      OUTER              INNER       MAJOR
    than regional. That said, the very remote                                  REMOTE                       REGIONAL          REGIONAL      CITIES
    regions of Australia – such as Nhulunbuy (NT)
    and Onslow (WA) – almost doubled in growth
    compared to the previous year.

                                                                           13.8%         13.4%   13.2%
                                                                National
                                                                average                                   11.0%
                                                                11.5%                                                  9.8%     9.7%
                                                                                                                                         8.6%

                                                                                                                                                      4.6%

                                                         Growth
                                                         by state

                                                                           NSW           ACT      VIC     TAS          QLD      SA       NT           WA
4
     ll Online Retail statistics are sourced
    A
    from the NAB Online Retail Sales Index (NORSI).

    Inside Australian Online Shopping © Australia Post
Inside Australian Online Shopping - 2017 eCommerce Industry Paper - Online shopping trends in Australia
What are
      Australians
      buying online?
      Department & Variety Store
      items are the most popular
      purchases, accounting for
      30% of all online purchases
      in Australia – followed closely
                                                                 Online purchasing
      by Fashion at 22%.                                         growth rate
                                                                                                        22.9%
      In terms of growth, Media takes out the top
      position, up by an impressive 23% in 2016.
      Fashion trails at 17%, followed by Health &
      Beauty and Hobbies & Recreational Goods,
                                                                               16.7%                                                        15.6%
      both up 16%.
                                                                 National                                        15.5%
                                                                 average
      Although buying behaviour has remained
      positive across most categories, this year’s               11.5%
      overall growth figures are more modest
      than in previous years.
                                                                   7.0%                   6.9%                             Flat

                                                                 Department   Fashion   Homewares      Media    Health     Specialty       Hobbies &
                                                                 & Variety              & Appliances            & Beauty   Food & Liquor   Recreational
                                                                 Stores                                                                    Goods

                                                     Share
                                                     of online
                                                     purchases   30.1%        22.2%     14.8%          12.9%    8.7%       6.1%            5.2%

Inside Australian Online Shopping © Australia Post
Inside Australian Online Shopping - 2017 eCommerce Industry Paper - Online shopping trends in Australia
Department &                                         Fashion                                Health & Beauty                        Hobbies &
Variety Stores                                       Fashion continues to be one of         Health & Beauty saw rapid              Recreational Goods
                                                     the major influencers in online        growth in 2015, coming in with
Department & Variety Stores                                                                                                        The Hobbies & Recreational
                                                     shopping, accounting for over          an extraordinary 50% increase.
experienced a higher growth rate                                                                                                   Goods category covers an
                                                     one in five online purchases in        However, in 2016 we’ve seen this
in 2016 than the previous year.                                                                                                    extensive range of items –
                                                     Australia last year. It’s the second   growth start to stabilise. Regional
More businesses are expanding                                                                                                      including Games & Toys,
                                                     biggest online category – growth       residents are adopting online
their product offers online and                                                                                                    Automotive, Music and Outdoor
                                                     in 2016 was 16.7%, just above          channels for Health & Beauty
migrating to digital channels.                                                                                                     equipment. Games & Toys and
                                                     previous year’s rate, marking          purchases at the same rate as
Those with limited access to                                                                                                       Outdoor goods make up over half
                                                     a third consecutive year of            their city-based counterparts,
conventional stores are                                                                                                            of all purchases in the category.
                                                     runaway growth.                        with regional growth sitting on
increasingly shopping online.                                                                                                      Looking to the future, Music
                                                                                            par with metropolitan growth.
This category was more popular                       Metropolitan shoppers purchased                                               (instruments and accessories)
regionally, up 8% compared to                        nearly 19% more fashion items                                                 will likely be the next sector to
7% overall. Over 60% of online                       online than they did the year                                                 see a major shift from bricks-
purchases in this category come                      before, with growth peaking in                                                and-mortar to online stores.
from pure play online retailers.                     November and May, at 38% and
                                                     29% respectively. Their regional       Specialty
                                                     counterparts only saw an
                                                     increase of 11% this year.
                                                                                            Food & Liquor
                                                                                            Specialty Food & Liquor – including
Homewares                                                                                   wine, tea, specialty food, liquor,
& Appliances                                                                                hampers, unperishable groceries
                                                                                            and coffee – accounted for 6.1%
Metro growth was also higher
than regional in the Homewares
                                                     Media                                  of all online purchases, but overall
                                                                                            growth was flat when compared
& Appliances sector, up 9.2%                         Books account for over 80% of          to 2015. A major contributor to
compared to 1.5% regionally.                         online Media purchases in the          this slowdown was a significant
New residential development                          category. The worldwide shift          reduction in spend coming from
has contributed to these figures,                    from physical bookstores to            WA, reflecting the economic
with homemakers shopping                             online retailers has made Media        conditions locally.
online to furnish their homes.                       the fastest growing category
Demand in this category spiked                       this year, up an impressive 23%.
in the warmer months, with
January and February recording
the largest year-on-year growth.

Inside Australian Online Shopping © Australia Post
7
    Rank       Top buying locations                  Growth rate (%)

    1          Point Cook, 3030                              13.2
    2          Toowoomba, 4350                                 7.6
    3          Liverpool, 2170                               15.0

    4          Gosford, 2250                                 12.8

    5          Cranbourne, 3977                               17.6
    6          Hoppers Crossing, 3029                        16.8                                                                                       2
    7          Mackay, 4740                                    1.7

    8          Mandurah, 6210                                  4.8

    9          Baulkham Hills, 2153                          21.1
    10         Campbelltown, 2560                            13.7

                   8                                                                                                                                    4
                                                                                                                                               9
                                                                                                                                                    3
                                                                                                                                               10

Where are                                                              Toowoomba, west of Brisbane, has come in
                                                                       runner up once again. As the second most

Australians                                                            populous inland city, with a high concentration of
                                                                       households, it’s not surprising the town continues
                                                                                                                                   6
buying online?                                                         to rank in the top three. Shoppers here are going
                                                                       online to access a wider range of products and
                                                                       for better value.
                                                                                                                               1       5

For the second year running, Point Cook in
Victoria has topped the nation for online shopping                     Liverpool in Sydney’s west has also retained its
– coming in ahead of Toowoomba in Queensland,                          position at third on the list – this area is also the
Liverpool and Gosford in NSW. Limited access                           online Fashion capital of Australia. Liverpool has
to physical shopping options in Point Cook and                         seen substantial growth in recent years, and it
other regional areas is driving residents in these                     appears residents are looking online for value
top buying locations to go online instead.                             and convenience.                                                             Above
                                                                                                                                                    average
Seven of the top ten postcodes recorded above                          Baulkham Hills in Sydney’s north-west was                                    growth
average growth, fuelled by the influx of young                         the fastest-growing suburb in the top ten, with                              Lower than
families moving into the suburbs looking for more                      online purchases up 21% year-on-year. New                                    average
                                                                                                                                                    growth
affordable housing.                                                    high-density zoning in the area has stimulated
                                                                       population growth and the online sales to match.

Inside Australian Online Shopping © Australia Post
eCommerce
                                                                 Christmas highlights
Events                                                           As expected, the Christmas period saw online shopping
                                                                 hit its peak. Extended delivery hours, 11% more vehicles
Each year we see a strong correlation
                                                                                                                                   2.2m
                                                                 on the road and more notifications via SMS and email
between online shopping events and                               all supported the online shopping boom.
buying behaviour. In 2016, May showed                                                                                              parcels
the greatest annual growth – domestic                                                                                              delivered on
                                                                                     Growth in                                     19 Dec 2016
events such as Mayhem and the Vogue
                                                                                                                 5.6m
                                                                                     parcels
and GQ online shopping nights.
                                                                                                                                  Merry Monday

                                                                                         13
November saw the second highest                                                                                  parcels from
growth rates, with Australian retailers
leveraging overseas shopping events
                                                                                                   %             overseas         19 Dec 2016
                                                                                                                                  The last Monday before
such as US Black Friday and Cyber                                                                                                 Christmas is typically the
Monday sales.
While consumers are making the most
                                                                          34m
                                                                       domestic parcel               50%
                                                                                                                                  busiest day of the year for
                                                                                                                                  online shopping deliveries.
                                                                                                                                  In 2016, there was a 12%
                                                                            deliveries               growth YOY in
of both international and domestic                                                                   parcel locker
                                                                                                                                  growth in parcels.
promotions, Christmas remains the                                                                    usage
largest shopping event in Australia – and
December the biggest buying month.

                                                                                   Ahead of the game
                                                                                   The Games & Toys sector sees a huge spike
                                                     Games & Toys                  in the lead up to Christmas, with 41% of its
                                                     share of online               annual online purchases occurring across
                                                     purchases
                                                     Oct – Dec
                                                                                   October, November and December (up 3%
                                                                                   from the previous year). December is the

                                                     41
                                                                                   largest buying month for all online shopping
                                                               %                   categories in Australia.

Inside Australian Online Shopping © Australia Post
Department
        & Variety
        Stores

Inside Australian Online Shopping © Australia Post
Department & Variety Stores
The Department & Variety Stores category             Online purchases
again took out top place in online shopping,         growth rate
accounting for 30.1% of all online purchases.
Year-on-year growth at 7% was strong, but
more modest than other online categories.
                                                                                                                                          7.9%
                                                           7.0             %
Within the category, fashion apparel is the
most popular purchase, making up the
majority of sales.1
                                                                                                                              6.6%
                                                                               Share of online
Traditional retailers still have                                               purchases
some work to do to win over the
online market, with over 60% of                                                                             Metro vs

                                                                               30.1
sales coming from pure play                                                                                 regional
online retailers.                                                                                %          growth

Regional Australians are going online for their                                                                               METRO      REGIONAL
Department & Variety Store goods slightly
more than their city counterparts, with regional
growth exceeding metropolitan growth by 1.3
percentage points (inner and outer regional
Australia6 grew by 8%).
                                                                               9.8%
Online retailers are starting to remove online                                           8.8%
shopping barriers by providing easier returns,                                                       8.3%
more delivery choices and better tracking                       National                                       7.3%    6.1%
                                                                Average
notifications.1
                                                                7.0 %
All the eastern states, with the exception of
Queensland, performed above the national                                                                                        3.7 %
average.
                                                                                                                                        2.8%
                                                     Growth                                                                                      0.8%
                                                     by state

                                                                               ACT       NSW         VIC       TAS     QLD       SA     NT       WA

Inside Australian Online Shopping © Australia Post
Within the top ten performing postcodes
     Top buying                                                                                          for Department & Variety Store purchases,
     locations                                                                                           seven were strongly influenced by growing
                                                                                                         populations – recording above-average growth
                                                                                                         rates in the category.
                                                                                                         Point Cook in Melbourne’s outer-west (one of
                                                                                                         the largest-growing suburb in Australia) has
                                                                                                         secured the top spot for online purchases.
                                                                                                         Limited access to physical shopping options
                                                                                                         in the area continues to drive online demand
                                                                                                    4    across all categories.
                                                                                                         Liverpool in New South Wales came in a close
                                                                                                         second, with an above-average growth rate
                                                                                                         of 7.9%. With large developments and new
                                                                                                         infrastructure going into the area, it’s in a prime
                                                                                                         position for online buying growth. Another key
10                                                                                              9 7      driver of online sales is the number of young
                                                                                                     8
                                                                                                 5       families settling in – over 53% of households
                                                                                                   2     in the area are home to couples with children
                                                                                                         (compared to the national average of 44.6%).

                                                                                                         With fashion apparel making up
                                                                                        3
     Rank      Top buying locations                  Growth rate (%)
                                                                                                         the majority of sales, capturing
     1         Point Cook, 3030                                6.8                  1       6            the attention of young Australians
     2         Liverpool, 2170                                 7.9                                       is key in this category. Interestingly,
     3         Hoppers Crossing, 3029                          9.3                                       more than 54% of the youth segment
                                                                                                         have a favourite website that they’d
     4         Toowoomba, 4350                                -0.6
                                                                                                         promote to others1 – so targeting
     5         Wentworthville, 2145                            8.8                                       this segment is a good approach
     6         Cranbourne, 3977                                8.9                                       for online retailers.
     7         Campbelltown, 2560                              9.6
                                                                       Above                             Further north, Baulkham Hills tells a similar
     8         Gosford, 2250                                 10.5      average                           story. In ninth position, the area had an
                                                                       growth
                                                                                                         impressive growth rate of 14.6% – more than
     9         Baulkham Hills, 2153                          14.6
                                                                       Lower than                        double the national average. Supported by a
     10        Mandurah, 6210                                  0.6     average                           boost in apartment living, and plans for a new
                                                                       growth
                                                                                                         train station, Baulkham Hills is in a great position
                                                                                                         to perform online across multiple categories.

Inside Australian Online Shopping © Australia Post
Homes in Nairne, 40km south-east of Adelaide,
   Top buyers                                                                                                         are big online shoppers too, receiving 17.9
   by household                                                                                                       parcels per calendar year (four times the
                                                                                                                      national average). The area has a relatively
                                                              National
                                                              average     4.4                          Parcels per
                                                                                                       household      young demographic, with over 30% of the
                                                                                                                      population under the age of 20 (compared
                                                     Nairne                                                           to the national average of 26%). This youthful
                                                      5252                                                     17.9   population has contributed to an online
                                                                                                                      shopping growth rate of 15.1%, mainly from
                                              Tom Price                                                               discount online-only sites, influenced by
                                                  6751                                            14.2                television advertising here.

                                                 Ceduna                                                                     Nairne
                                                   5690                                          14.1
                                                                                                                            5252

                                         Streaky Bay
                                                5680                                            13.3

                                                     Crace
                                                      2911                                     12.7

                                                                                                                      The mining town of Tom Price in Western
                                                                                                                      Australia’s Pilbara region receives an average
                                                                                                                      of 14.2 parcels per household each year. The
In 2016, Australian households purchased an                              It appears Crace’s new locals are            population here is skewed towards males
average of 4.4 parcels each in the Department
& Variety Store category.
                                                                         heading online to save, with purchases       (65.2% compared to the national average of
                                                                         in the area predominantly coming             49.4%), and the median household income is
As in other categories, regional towns saw higher                                                                     2.2 times higher than the Australian average.
                                                                         from discount online-only sites.             Being fairly isolated, the town is a high performer
rates of online sales on a per-household basis.
                                                                                                                      online, as locals turn to the internet for their
Crace, located just 12km north of Canberra,                                                                           everyday essentials.
was one exception in 2016. Households here                                 Households made
received at least one parcel per month, double                             an average of                                                      Tom Price
the national average. The suburb has been                                  4.4 Department                                                     6751
through a major transformation over recent
                                                                           & Variety Store
years, with new streets and homes being built
at a rapid rate (there’s been a four-fold increase
                                                                           purchases last
                                                                           year.

                                                                                             4.4
in houses since the 2011 census).

Inside Australian Online Shopping © Australia Post
Top growth                                                                                          Rouse Hill
   locations
                                                                          Schofields
                                                                                                              The Ponds

At a state level, New South Wales and Victoria
are Australia’s top growth performers, with
purchases up 8.8% and 8.3% respectively. Both
states have key growth pockets contributing
                                                     Wollert     Doreen
to this increase. In New South Wales, the
neighbouring areas of Schofields, Rouse Hill
and The Ponds each recorded an online growth                   South
rate over two times the national average.                      Morang

The Ponds has a history of high growth across
several categories, and continued to see an
increase in 2016, with 25.7% growth in the
category. Nearby Schofields has grown by
                                                                                                       Top growth locations   Growth rate (%)
nearly eight times the average at 54.4%, while
Rouse Hill has grown by a more modest 14.5%.                                                           Schofields, 2762               54.4

                                                                                 The Hills District,
These areas are all popular with young families.

                                                                                     Sydney
Couples with children make up 66% of the                                                               The Ponds, 2769                25.7
population of Rouse Hill, the largest of the                                                           Rouse Hill, 2155               14.5
three suburbs, compared with the national
average of 44.6%.
South Morang, Doreen and Wollert sit in Victoria’s

                                                                                 City of Whittlesea,
                                                                                                       Wollert, 3750                  48.9

                                                                                     Melbourne
northern corridor. While growth in South Morang
has been stable, Wollert and Doreen have seen                                                          Doreen, 3754                   21.8
major urban developments that have contributed                                                         South Morang, 3752               5.3
to an online shopping boom. The number of
homes in Wollert and Doreen has nearly tripled
since the 2011 Census, generating steady
growth for online shopping.

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Future
   growth

                                                                                                               7.5
                                                Edmondson
                                                Park

                                                              Clyde                                                                   Edmondson
                             Camden                           North                                             Average household     Park
                                                              3978                                              purchase rate         2174
                     Clyde
                     North

                             Officer                        In Victoria’s south-east growth corridor,         Edmondson Park is a major land release
                                                            the areas of Clyde North (47km from the CBD)      area, 45km south-west of Sydney’s CBD.
                                                            and Officer (54km from the CBD) have also         The area has a new railway station, and
                                                            sparked our interest. Both have experienced       is expected to see significant development
                                                            high rates of online shopping, and are under      in the near future.
                                                            major residential development – suggesting
                                                                                                              Camden is 20km further south, and like
                                                            these numbers are set to rise. The area lacks
Our top picks for future                                    a range of shopping options, spurring residents
                                                                                                              Edmondson Park, has had consistent online
                                                                                                              shopping growth and an above-average
growth are Clyde North and                                  to head online for their Department & Variety
                                                                                                              household purchase rate – a trend that’s
                                                            Store items.
Officer in Victoria. And from                                                                                 expected to continue.
NSW, the areas of Edmondson                                 Officer also has access to the NBN service,
                                                            creating even better online experience.
Park and Camden are the
ones to watch for future online
growth in the category.

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Fashion

Inside Australian Online Shopping © Australia Post
Fashion
Fashion continues to be one of the major             Online purchases
influencers in online shopping, accounting for       growth rate
over one in five online purchases in Australia.                                                                             18.9%
It’s the second biggest online category behind
Department & Variety Stores. Growth in 2016

                                                     16.7                  %
was 16.7%, just above previous year’s rate,
marking a third consecutive year of significant
growth.
                                                                               Share of online                                          10.7%
Consumers are more comfortable                                                 purchases
than ever buying online; footwear,
fashion accessories and activewear
                                                                                                         Metro vs

                                                                               22.2
items, in particular, are increasing                                                                     regional
in popularity.                                                                                   %       growth

While there was growth across the category,                                                                                 METRO       REGIONAL
footwear (32% growth), fashion accessories
(18.7%) and activewear (17.4%) showed the
biggest improvements.
Australian metropolitan areas are leading the                              21.1%
way – up 18.9% on the previous year, nearly
double that of regional areas (10.7%).                                                  18.1%    18.1%
With the exception of Western Australia, all
                                                                National
                                                                average                                    15.0%
states recorded double digit growth. Growth                     16.7 %                                              12.9%     12.8%
was particularly strong in NSW, up 21.1%, with                                                                                        11.8%
ACT and VIC both up 18.1%.
                                                                                                                                               7.1%

                                                     Growth
                                                     by state

                                                                               NSW        VIC    ACT         SA     TAS        NT     QLD       WA

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3
   Top buying                                                                                             Rank   Top buying locations   Growth rate (%)

   locations                                                                                              1      Liverpool, 2170                27.2

                                                                                                          2      Point Cook, 3030                17.0
                                                                                                          3      Toowoomba, 4350                  9.5

                                                                                                          4      Baulkham Hills, 2153           28.4
                                                                                          5               5      Rouse Hill, 2155               31.3
                                                                                                  1
                                                                                      4                   6      Wentworthville, 2145           29.6
                                                                                              6
                                                                                                          7      Ballarat, 3350                  17.7
                                                                                      10                                                                  Above
                                                                                                          8      Grovedale, 3216                19.3      average
                                                                                                                                                          growth
Eight of the top ten biggest Fashion-buying                                                               9      Launceston, 7250               10.8
                                                                                                                                                          Lower than
postcodes were in New South Wales and                                                                     10     Campbelltown, 2560             24.5      average
Victoria, spurred on by above-average growth.                                                                                                             growth
Toowoomba in Queensland and Launceston in
Tasmania also made the list, despite growing          7
at a lower rate than the national average.                2
Liverpool is Australia’s online Fashion capital.      8
Located 32km west of Sydney, the area has
undergone substantial demographic change in
recent times. Residents here come from a wide
variety of ethnic backgrounds; over 66% of the
population had both parents born overseas                               9
compared to 34.3% nationally.
Growth in online shopping here has been driven
in part by the influx of new families who’ve
moved to the area to take advantage of new                                                                              1
housing developments.
                                                     Similarly, Rouse Hill just 30km north, has a much
Capturing the youth market is                        younger demographic than the national average                   An influx of
key for Fashion retailers looking to                 – over 40% of the population is under 25 years                  young families
accelerate growth. Over 54% of the                   old (the national average is 33%). With younger                 has driven
                                                     Australians more likely to spend on fashion, and                Liverpool’s
youth segment have a favourite                       more partial to buying online, it’s not surprising
website that they would promote                      that this area was one of the top performers
                                                                                                                     growth.
to others.1                                          in the category.

Inside Australian Online Shopping © Australia Post
Top buyers
   by household
                                                                                                                         In South Australia’s southern-most town,
                                                                  National
                                                                  average    3.2                          Parcels per
                                                                                                          household      Port MacDonnell, access to bricks-and-mortar
                                                                                                                         shopping is limited, but access to the internet
                                                      Port
                                                                                                                         is not. Households here are making, on average,
                                                 MacDonnell                                                       11.0   eleven purchases a year in the Fashion category
                                                      5291
                                                                                                                         – the highest per-household rate in the country.
                                                                                                                         Women’s apparel and footwear items were the
                                                     Robinvale
                                                          3549                                               10.3        most popular purchases.

                                                      Parkville                                                                Port
                                                         3052                                       8.2                        MacDonnell
                                                                                                                               5291

                                                 Condobolin
                                                      2877                                      8.1

                                                 Oyster Bay
                                                       2225                                    7.8

                                                                                                                         Robinvale, situated on the south bank of Murray
                                                                                                                         River in Victoria, is known for its table grapes. It’s
                                                                                                                         a hotspot for footwear purchases too – households
                                                                                                                         here received an average ten parcels containing
                                                                                                                         footwear and apparel items last year.

                                                                              Australian
                                                                              households recieved                                                           Robinvale
                                                                              an average of 3.2                                                                  3549
                                                                              parcels of Fashion
                                                                              items last year.

                                                                                                      3.2
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Top growth
   locations

                                                                                                                 Port
                                                                                                                 Douglas

                                                                                              Mareeba
                                                                                                                  Edmonton
Queensland as a whole has seen growth in the
Fashion category of 11.8% – below the national                                                                                             Areas in the Gold
average. Nevertheless, there are some areas in                                                                                             Coast region
the state experiencing very strong growth.                                                                                                 experienced high
                                                                                                                                           growth rates,
There were pockets in the Gold                                                                                                             especially in
Coast and Northern Queensland                                                                                                              Women’s Fashion.
growing more than 20% in 2016.
The areas of Tugan, Upper Coomera, Palm
Beach and Varsity Lakes along the Gold Coast
all experienced high growth rates, especially in                                                                      Jimboomba            Upper
Women’s Fashion. This region has one of the                            Top growth locations    Growth rate (%)                             Coomera
fastest growing populations in Australia, spurred
                                                                       Mareeba, 4880                   24.0
on by new investment and infrastructure. All the
                                                     North QLD

                                                                                                                                            Palm Beach
ingredients for strong online purchasing growth.                       Edmonton, 4869                  23.6                Varsity Lakes

                                                                       Port Douglas, 4877              22.9
                                                                                                                                              Tugun

                                                                       Tugun, 4224                     30.3

                                                                       Upper Coomera, 4209             29.6
                                                     Gold Coast, QLD

                                                                       Palm Beach, 4221                23.0
                                                                       Varsity Lakes, 4227             21.8
                                                                       Jimboomba, 4280                 21.4

Inside Australian Online Shopping © Australia Post
Future                                                         Online fashion                                     Online fashion
                                                                  purchases                                          purchases
   growth                                                         growth rate                                        growth rate

                                                       Wellard
                                                       6170             27.8                %
                                                                                                          Byford
                                                                                                          6122           24.3                %

                                       Byford

                                Wellard              Located on the southern Perth corridor, Wellard    Byford, just 20 minutes east of Wellard,
                                                     is the first Transit Oriented Development (TOD)    has become an extension of the Perth
                                                     on the Perth to Mandurah rail line. Home to        metropolitan area, with new developments
                                                     over 5,000 residents, the area’s online fashion    springing up to accommodate new
                                                     purchases have grown 27% over the past year.       homebuyers and young families moving
                                                     With a skew towards young families (50% of         into the area. These characteristics,
                                                     households are couples with children compared      combined with 24% online growth in the
Wellard and Byford in                                with a national average of 45%) and a median       past year, has Byford positioned as a
Western Australia are                                age (29) eight years below the national median,    strong growth prospect for Fashion sales.
                                                     Wellard is one to watch in Fashion.
our hot picks for growth
in online Fashion shopping
in coming years.

                                                                           TOD is the exciting
                                                                           fast growing trend in
                                                                           creating vibrant, livable,
                                                                           sustainable communities
                                                                           – creation of compact,
                                                                           walkable, pedestrian-
                                                                           oriented, mixed-use
                                                                           communities centered
                                                                           around high quality
                                                                           train systems

Inside Australian Online Shopping © Australia Post
Health &
        Beauty

Inside Australian Online Shopping © Australia Post
Health & Beauty
Once again, the Health & Beauty category             Online purchases
cemented its position with a further 15.5%           growth rate
uplift in 2016 following an extraordinary
50% growth rate in 2015.
                                                                                                                            15.4%       15.5%

                                                     15.5
It’s now the fifth largest category overall,
accounting for 8.7% of the total online                                    %
retail market.
Consumers are becoming more comfortable                                        Share of online
with buying their health and beauty essentials                                 purchases
online. In fact beauty products (including
perfume) are now some of the most popular
items purchased online – sitting in fourth place                                                         Metro vs

                                                                               8.7
overall behind apparel, consumer electronics                                                             regional
and books. Vitamins and health supplements                                                  %            growth
aren’t far behind, becoming the seventh most
popular online purchase in 2016 after                                                                                       METRO       REGIONAL
homewares and toys.

The segment’s big buyers are
spread over different demographics.                                        20.0%
Young people, women and young
                                                                                         17.1%   16.5%
professionals are buying up beauty                                                                         16.3%    16.0%
                                                                National
                                                                                                                              15.0%   14.8%
products, while health supplements                              average

and vitamins are more popular with                              15.5%
retired Australians.1                                                                                                                          9.3%
Growth has been fairly even across metropolitan
and regional areas. But the biggest impact has
come from very remote areas of Australia6, like
the mining towns of Onslow and Port Hedland          Growth
in WA, where health supplements and vitamins         by state
are particularly popular.
                                                                               ACT        SA      VIC       NSW     QLD        NT     TAS       WA

Inside Australian Online Shopping © Australia Post
10
                                                                                                             In the list of top ten locations for Health & Beauty
    Top buying                                                                                               purchases, growth rates have been uneven. While
    locations                                                                                                each of these areas experienced a rise, only three
                                                                                                             recorded above-average growth.
                                                                                                   4
                                                                                                             Online shopping hotspot Point Cook in Melbourne’s
                                                                                                             outer west took out the top place. The area has
                                                                                                             seen a housing boom in recent years, and with
                                                                                                       8     physical shopping options still catching up,
                                                                                                             homeowners are heading online to buy their
                                                                                                             essentials. Health & Beauty purchases in the
                                                                                                             area have grown by 21%, with the main
                                                                                                       2     contributors being pharmacy items.
                                                                                                             Consumers in regional towns like Wagga
                                                                                                             Wagga (NSW) and Ballarat (VIC) are enjoying
                                                                                                             the large range of health and beauty products
5                                                                                                            that are available online. These areas have
                                                                                                             a comparatively young population (15.8%
3                                                                                                            are aged between 15-24 years, compared
                                                                                                             to 13.3% nationally), which is likely to be a
                                                                                               7             contributing factor.

                                                                                                             Beauty retailers with an online
    Rank       Top buying locations                  Growth rate (%)
                                                                                    9                        presence are catching on to
    1          Point Cook, 3030                              21.0                       1 6                  growing demand, and using videos
    2          Toowoomba, 4350                               15.4                                            and reviews to improve the online
    3          Mandurah, 6210                                  9.9                                           shopping experience.
    4          Mackay, 4740                                    5.0

    5          Success, 6164                                 15.2                                           1
    6          Glen Waverley, 3150                             5.7
    7          Wagga Wagga, 2650                             25.2
                                                                       Above
                                                                                                           Point Cook’s
    8          Bundaberg, 4670                               11.7      average                             lack of physical
                                                                       growth
    9          Ballarat, 3350                                25.0
                                                                                                           shopping
                                                                       Lower than                          options is driving
    10         Cairns, 4870                                    7.5     average
                                                                       growth                              residents online.

Inside Australian Online Shopping © Australia Post
Top buyers
   by household
                                                                                                              Tom Price, a mining town in Western Australia’s
                                                                   National
                                                                   average    1.3               Parcels per
                                                                                                household     Pilbara region, received an average of five
                                                                                                              Health & Beauty parcels per household in 2016.
                                                     Tom Price                                                Interestingly, the nearby towns of Karratha
                                                         6751                                          5.0    and Newman had an average of around three
                                                                                                              parcels per household – which was significantly
                                                                                                              lower, but still more than double the national
                                                     Charleville
                                                           4470                            4.0                average.
                                                                                                              These towns have comparatively large male
                                                                                                              populations (65.2% of residents in Tom Price,
                                                     Kingscote                                                60.6% in Karratha and 66.4% in Newman,
                                                          5225                            3.8
                                                                                                              compared to the national average of 49.4%).
                                                                                                              In addition, the median household income
                                                                                                              is at least 2.2 times the Australian average.
                                                       Ceduna
                                                         5690                             3.8                 It’s likely that this high-earning male population
                                                                                                              is heading online to buy up pharmacy items,
                                                                                                              health supplements and vitamins.
                                                      Karratha
                                                          6714                       3.5
                                                                                                                                     Karratha
                                                                                                                                     6714
                                                     Katanning
                                                          6317                       3.4

                                                                                                                                     Tom Price
                                                      Newman                                                                         6751
                                                         6753                       3.2
     Households made
     an average of 1.3
     online Health &
     Beauty purchases
     this year.

                                                1.3
Inside Australian Online Shopping © Australia Post
Top growth
   locations

                                                                                                                                       Albury

On the border of NSW and VIC, the townships
                                                                                                                   Yarrawonga
of Wodonga, Albury and Yarrawonga are some
of the fastest growing regional areas for Health                                                                                       Wodonga
& Beauty purchases. While there’s good access
to physical retail stores, many of the residents
are looking for more variety – and they’re going
online to find it. They’re buying health related
products, which is contributing to the growth
rate in the area.
While Tasmania has seen a below average
growth rate in the category (14.8%), there are                            Top growth locations   Growth rate (%)
areas of the state that are experiencing strong
                                                     NSW and VIC border   Wodonga, 3690                  46.8
growth. In the city of Hobart, along the River
Derwent, the towns of Blackmans Bay, Howrah                               Albury, 2640                   44.0            Bridgewater      Howrah
and Bridgewater have all grown by more than
24% this year – with beauty purchases having                              Yarrawonga, 3730               43.7
the biggest impact on this figure.                                                                                     Blackmans Bay
                                                     The River Derwent

                                                                          Blackmans Bay, 7052            30.9
                                                        region, TAS

                                                                          Howrah, 7018                   30.7

                                                                          Bridgewater, 7030              24.1

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Future

                                                                                                                                                   58
   growth

                                                               Yanchep
                                                               6035
                                                               Alkimos
                                                               6038
                                                                                                                Stratford
                                                                                                                3862
                                                                                                                                   43    years
                                                                                                                                                         years

                                                                                                                Paynesville
                    Yanchep                                                                                                         Stratford’s   Paynesville’s
                                                                                                                3880               median age      median age
                                               Paynesville
                    Alkimos
                                            Stratford
                                                             Both Yanchep and Alkimos are part of the         Located in Gippsland Victoria, the towns of
                                                             State Government’s future urban development      Stratford and Paynesville have also caught
                                                             plans. Yanchep in particular is an area to       our attention.
                                                             watch. It’s one of the most rapidly developing
                                                                                                              Stratford sits on the Avon River, over 200km east
                                                             resort towns in Western Australia, and
                                                                                                              of Melbourne. The principal industries in the area
                                                             according to the ABS, one of the fastest
                                                                                                              are dairy, sheep, beef cattle and grain farming.
                                                             growing suburbs, with the biggest population
As for future growth, we’re                                  increase in FY16 Australia-wide.                 Paynesville, a further 60km east, is a charming
looking at the coastal                                       With beautiful beaches, two golf courses
                                                                                                              village with canals and inlets that have earned
                                                                                                              it the title ‘boating capital’ of Victoria.
suburbs of Yanchep and                                       and a modern shopping complex, it appears
Alkimos in Western Australia.                                an increasing number of Australians are          Both areas have a relatively old demographic
                                                             choosing to make the sea change. Home            – Stratford’s median age is 43 and Paynesville’s
Located just 56km north of                                   to 18,900 people, the area already has an        is 58, taking them well above the Australian
Perth, these areas are set                                   online growth well above the national            average of 37.
                                                             average – and we’re expecting Yanchep
to make waves in the Health                                  to grow into an even bigger player in the        The towns have a strong demand in the Health
& Beauty space.                                              Health & Beauty space.                           & Beauty category already, and based on the
                                                                                                              age profile, we predict demand for pharmacy
                                                                                                              goods, health supplements and vitamins to
                                                                                                              continue increasing.

Inside Australian Online Shopping © Australia Post
Hobbies &
        Recreational
        Goods

Inside Australian Online Shopping © Australia Post
Hobbies & Recreational Goods
It’s one of the smaller online categories –          Online purchases
accounting for just 5.2% of all online sales –       growth rate
but Hobbies & Recreational Goods is growing
fast, up 15.6% last year.                                                                                                    16.0%       15.1%

                                                     15.6
It’s a diverse category covering everything from
Games & Toys, to Music, Automotive and                                     %
Outdoor Equipment. Games & Toys and Outdoor
equipment make up over half the purchases.
                                                                               Share of online
                                                                               purchases
It appears music is the next
category to be disrupted by the
consumer shift to online channels.                                                                        Metro vs

                                                                               5.2
It has seen the biggest growth                                                                            regional

of all the sub-categories in the
                                                                                           %              growth

past year.                                                                                                                   METRO       REGIONAL

Metro areas slightly outgrew their regional
counterparts – up 16% compared with 15.1%.6
Australia’s major cities and inner regional
                                                                           18.7 %       18.0%
areas6 grew 16% and 15.8% respectively.                                                          17.7 %
                                                                National                                    16.6%
There was impressive double-digit growth                        average                                              14.2%
across all states, with NT, NSW, VIC and ACT
leading the way.
                                                                15.6%                                                          13.2%
                                                                                                                                       10.9%   10.7 %

                                                     Growth
                                                     by state

                                                                               NT        NSW      VIC        ACT     QLD        TAS     WA          SA

Inside Australian Online Shopping © Australia Post
Regional towns in Queensland
   Top buying                                                                                         took out the top four spots for
   locations                                                                                          overall purchases in the category,
                                                                                        4             led predominately by a demand
                                                                                                      for automotive supplies.
                                                                                             2        People in Queensland’s urban areas, outside
                                                                                                      of Brisbane, travel an average of 1,400km (or
                                                                                                  3   20.3%) further by passenger vehicle than the
                                                                                                      average Australian7 – a likely reason for the
                                                                                             1        high sales in this category.
                                                                                                      Toowoomba, west of Brisbane, is the number
                                                                                                      one area for online Hobbies & Recreational
                                                                                                      Goods sales. It’s Australia’s second most
                                                                                                      populous inland city and home to over
                                                                                              6       102,000 residents. The population includes
10                                                                                          8 7       a high proportion of residents with both
                                                                                                      parents born in Australia (76.3% compared
                                                                                             9
                                                                                                      to 53.7% nationally).
                                                                                                      Point Cook in outer-western Melbourne placed
                                                                                                      fifth overall, with the largest growth rate in the
     Rank      Top buying locations                  Growth rate (%)
                                                                                                      top ten, up 25.2%. Limited access to shopping
     1         Toowoomba, 4350                               13.4                   5                 options has driven the online demand here,
                                                                                                      mainly for toys and outdoor equipment.
     2         Gladstone, 4680                                -2.1                                    Point Cook also has a large number of young
     3         Bundaberg, 4670                               13.5                                     families with children (53.2% compared to
                                                                                                      44.6% nationally), a potential factor in the
     4         Mackay, 4740                                    5.9                                    high toy sales.
     5         Point Cook, 3030                              25.2
     6         Wyong, 2259                                   24.7
     7         Gosford, 2250                                 18.5
                                                                       Above
     8         Campbelltown, 2560                             17.7     average
                                                                       growth
     9         Sanctuary Point, 2540                          17.2
                                                                       Lower than
     10        Mandurah, 6210                                  7.1     average
                                                                       growth

Inside Australian Online Shopping © Australia Post
Due to the lack of bricks-and-mortar shopping
   Top buyers                                                                                                           options, the category is particularly popular in
   by household                                                                                                         regional and remote towns of Australia.
                                                                 National
                                                                            0.8                           Parcels per   Cobar in central New South Wales relies heavily
                                                                 average                                  household
                                                                                                                        on metal ore mining, with 29.4% of people
                                                     Tom Price                                                          employed in the industry. The area’s isolated
                                                         6751                                                    3.3    location is prompting residents to look online,
                                                                                                                        particularly to buy outdoor sporting and
                                                                                                                        leisure equipment. Households here also
                                                        Cobar                                                           receive three times more parcels a year
                                                         2835
                                                                                                    2.5                 relating to automotive and cycling activities,
                                                                                                                        than the general population.

                                              Roxby Downs
                                                      5725                                     2.3                            Cobar
                                                                                                                              2835

                                                      Newman
                                                         6753
                                                                                              2.2

                                                     Jindabyne
                                                          2627                               2.1
                                                                                                                        Jindabyne, south of Canberra, is a popular
                                                                                                                        holiday destination due to its proximity to the
                                                                                                                        Kosciuszko National Park. The area is famous
                                                                                                                        for skiing in winter and abseiling, rock-climbing,
                                                                                                                        mountain biking, horse riding and fly fishing in
                                                                                                                        summer. So it’s not surprising that households
                                                                                                                        here receive an average of two Hobbies &
                                                                                  Households made                       Recreational Goods parcels a year – almost
                                                                                  an average of                         three times the national average.
                                                                                  0.8 Hobbies &
                                                                                  Recreational                                                    Jindabyne
                                                                                  Goods purchases                                                 2627
                                                                                  for the year.

                                                                                                          0.8
Inside Australian Online Shopping © Australia Post
Top growth
   locations                                                                                                Eagleby
                                                                             Ormeau

                                                                                                            Upper
                                                                                                            Coomera

There’s a cluster of high growth areas in
Melbourne’s north. Essendon, Strathmore and
Pascoe Vale each recorded growth of almost
double the national average for Hobbies &
Recreational Goods. Popular online categories
in these areas were Toys and Outdoor Equipment.
The growth is likely being driven by couples with
children – 50.8% of families here fall into that
category, compared with the national average
of 44.6%.
                                                                                                Top growth locations   Growth rate (%)
While overall growth in Queensland is just below
the national average at 14.2%, there are areas                                                  Eagleby, 4207                  33.8

                                                                              QLD South
in the state experiencing good growth.               Strathmore
                                                                                                Upper Coomera, 4209            24.6
Eagleby, Ormeau and Upper Coomera in                                Pascoe                      Ormeau, 4208                   21.4
Queensland’s south are seeing growth rates               Essendon   Vale
above 21%. Not surprisingly, Games & Toys
purchases are popular here, given 25% of the
population is under the age of 15 (compared                                                     Pascoe Vale, 3044              31.5

                                                                              North Melbourne
to 19.3% nationally).
                                                                                                Essendon, 3040                 29.2

                                                                                                Strathmore, 3041               28.0

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Future                                                                 Online hobbies                                      Online hobbies
                                                                          and recreational                                    and recreational
   growth                                                                 goods purchases                                     goods purchases
                                                                          growth rate                                         growth rate

                                         Morayfield

                                                                                 19.7              %
                                                                                                                                    25.6                 %
                                                     North
                                                     Lakes                                                        Mount
                                                               Morayfield                                         Barker
                                                               4506                                               5251
                            Mount
                            Barker
                              Mount
                              Gambier                        A boom in new housing is attracting young          They’re four hours drive apart, but Mount
                                                             families to Morayfield and North Lakes, in the     Barker and Mount Gambier in South
                                                             Moreton Bay Region of Queensland. With a           Australia share similar online shopping
                                                             medium age of 31 – six years below the national    habits – with both areas seeing strong
                                                             average – we predict a surge in online purchases   growth in Music and Outdoor items.
                                                             for games, toys and outdoor leisure items here.
                                                                                                                Nestled in the south-east corner of South
Our hot picks for future                                                                                        Australia, Mount Gambier is the second
                                                                                                                most populous city in the state. It’s well
growth are Morayfield and                                                                                       known among tourists, with its captivating
North Lakes, both in the                                                                                        maar cobalt Blue Lake and volcanic
Moreton Bay region of                                                                                           landscape, and attracts hundreds of young
                                                                                                                jazz musicians from across Australia each
Queensland – as well as                                                                                         year for the Generation in Jazz Festival.
Mount Barker and Mount                                                                                          Mount Barker, 33km east of Adelaide’s city
Gambier in South Australia.                                                           Situated just 40          centre, is one of the fastest growing areas
                                                                                      minutes north of          in South Australia. With plenty of young
                                                                                      Brisbane, the             families moving in, and a range of outdoor
                                                                                      picturesque Moreton       facilities – like skate parks, walking trails
                                                                                      Bay Region is a fast      and golf – we believe this area has strong
                                                                                      growing area in           potential for future growth.
                                                                                      Australia

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Homewares
      & Appliances

Inside Australian Online Shopping © Australia Post
Homewares & Appliances
One of Australia’s most recognisable retailers       Online purchases
for consumer electronics, closed its doors in        growth rate
2016. The result has been an increasingly
competitive landscape in the Homewares &                                                                                      9.2%
Appliances sector – as the pressure builds to

                                                          6.9              %
adapt and innovate, or follow the same path.
As more and more retailers are expanding
their product lines to play in this space, keeping
any kind of competitive edge is a challenge.                                   Share of online
                                                                               purchases

Successful retailers are finding                                                                                                         1.5%
ways to differentiate their offering,                                                                       Metro vs

                                                                               14.8
and improve the online experience.                                                                          regional
                                                                                                 %          growth
The category accounts for 14.8% of the total
online market and has seen a moderate 6.9%                                                                                    METRO     REGIONAL
growth over the year. Small appliance purchases
have made the biggest impact, growing 23% –
double the overall online growth rate of 11.5%.
Homewares trail at 11.6%, and consumer                                     10.5%
electronics fall further behind with a growth
rate of 3.8%.                                                                            8.5%
                                                                National
Consumer electronics and manchester items are                   average                              5.9%
in the top five most tracked products by online                 6.9%
shoppers1, making it easy for these customers                                                                  5.0%
to keep an eye on their orders is important.
                                                                                                                       3.3%     2.9%
Metropolitan areas have seen the most growth,
particularly in New South Wales and Victoria,                                                                                          1.0%
with purchases up 12.9% and 9.7% respectively.                                                                                                  -2.2%
In contrast, regional areas have experienced
                                                     Growth
a relatively small increase of 1.5% over the         by state
same period.
                                                                               NSW        VIC        SA        TAS     QLD      ACT    WA          NT

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Across the ten biggest-buying postcodes for
   Top buying                                                                  Rank   Top buying locations     Growth rate (%)
                                                                                                                                 Homewares & Appliances, growth has been
   locations                                                                   1      Point Cook, 3030                 10.9      fairly uneven – with only half of these areas
                                                                                                                                 recording an above-average growth rate.
                                                     6                         2      Toowoomba, 4350                    3.9
                                                                               3      Liverpool, 2170                  11.8      With new developments going
                                                                               4      Hoppers Crossing, 3029             5.3     up in the area, we’ve seen
                                                                                                                                 families flocking to Melbourne’s
                                                                               5      Gosford, 2250                      9.5
                                                                                                                                 outer-western suburbs to settle
                                                                               6      Mackay, 4740                      -3.8     down – creating an online
                                                                               7      Cranbourne, 3977                   6.5     shopping boom in the process.
                                                                               8      Wyong, 2259                        8.1
                                                                                                                                 Point Cook, one of the largest-growing
                                                                      2        9      Campbelltown, 2560                 5.4     postcodes in Australia – remains the
                                                                               10     Greystanes, 2145                  17.0     country’s number one buyer of Homewares
                                                                                                                                 and Appliances. Sales have grown at an
                                                                                                                                 impressive rate too – four percentage points
                                                                                                                                 above the national average. The area has a
                                                                                                                                 high percentage of homeowners (over 71%
                                                                                                                                 compared to the national average of 67%) –
                                                                                                                                 and with few bricks and mortar shopping
                                                                  8                                                              options, they’re heading online to furnish
                                                             10
                                                                  5                                                              their homes.
                                                         9    3                                                                  Nearby suburb Hoppers Crossing has a
                                                                                                                                 similar demographic, and came in a close
                                                                                                                                 second in Victoria.
                                                                                                                                 The 2145 postcode, west of Parramatta,
                                                                           1                                                     jumped into the top ten largest buying areas
                                          4                                                                                      for the category with an impressive 17%
                                      1         7                                                                                growth rate. The Greystanes suburb was the
                                                                                                                                 biggest contributor, making up 39% of online
                                                                          Point Cook, one                                        purchases in the postcode. Like Point Cook
           Above                                                          of the largest-                                        the area has a high number of homeowners
           average                                                        growing suburbs                                        (81%), and evidently they’re choosing to shop
           growth
                                                                          in the country,                                        online for home comforts.
           Lower than
           average
                                                                          recorded 10.9%
           growth                                                         growth.

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Top buyers
   by household
                                                                                                               Crace, a suburb located 12km north of
                                                               National
                                                               average     2.2                   Parcels per
                                                                                                 household     Canberra, purchased an average of 5.4
                                                                                                               Homewares & Appliances parcels per household
                                           Bridgetown                                                          in 2016 – twice the national average. A number
                                                 6255                                                   5.5    of factors could be attributed to the spike in
                                                                                                               purchases, including Crace’s relatively young
                                                                                                               demographic. With a median age of 27, this age
                                                      Crace
                                                       2911                                            5.4     group is technology savvy and always on the
                                                                                                               lookout for the best bargain.

                                                     Jindera
                                                        2642                                       5.1              Crace
                                                                                                                    2911

                                                Marulan
                                                   2579                                          4.8

                                             Jindabyne
                                                  2627                                           4.8

                                                                                                               Jindabyne in south-east New South Wales is
                                                                                                               close to several ski resorts in the Kosciuszko
                                                                                                               National Park, making it a popular spot for
                                                                                                               winter holidaymakers. With the area receiving
                                                                                                               an average of 4.8 parcels per household – more
                                                                                                               than double the national average – it’s possible
                                                                          On average,                          that residents are going online to fit out their
                                                                          Australian                           homes for guests and visitors.
                                                                          households made
                                                                          2.2 online purchases                                         Jindabyne
                                                                          for Homewares &                                              2627
                                                                          Appliances in 2016.

                                                                                                 2.2
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Top growth
   locations
                                                                                                    New South Wales leads the way with a growth
                                                                                                    rate of 10.5%, followed closely by Victoria at 8.5%.

                                                                                                    New housing developments still
                                                                                  Riverstone
                                                                                                    have the biggest impact on the
                                                           Kingswood                                Homewares & Appliances category,
                                                                                                    as new homemakers shop online
                                                                                  Plumpton
                                                                                                    for all the home comforts.
                                                             Mount Druitt
                                                                                                    The north-west and south-west corridors of New
                                                                                                    South Wales are housing hotspots, and have
                                                                                        Glenfield   had some of the largest online growth rates for
                                                                       Austral
                                                                                                    Homeware and Appliance purchases. Given the
                                                                                                    construction plans still in the pipeline, growth in
                                                                                 West Hoxton        these areas is expected to continue in 2017.

                                    Top growth locations       Growth rate (%)

                                    Plumpton, 2761                     30.0
              North-West corridor

                                    Mount Druitt, 2770                 20.9
                                    Riverstone, 2765                    19.9
                                    Kingswood, 2747                    19.8
              South-West corridor

                                    Glenfield, 2167                    31.9

                                    Austral, 2179                      22.2
                                                                                                                               New South Wales
                                    West Hoxton, 2171                   17.7                                                   priority growth
                                                                                                                               areas contribute to
                                                                                                                               some of the largest
                                                                                                                               growth in online
                                                                                                                               purchases.

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Future                                                                                                      Greater Geelong’s
   growth                                                                                                      estimated population
                                                                                                               growth 2006-2016

                                                         Online purchases
                                                         growth rate

                                                            41.2%

                                                                               30.5%
                                                                                                                   12.2               %

              Mount
              Duneed
                                        Barwon
                                        Heads                                                     19.8%

                                Ocean
                                Grove

                                                         Mount              Barwon               Ocean
                                                         Duneed             Heads                Grove
As for future growth, we’re                              3217               3227                 3226
looking at Greater Geelong –
Victoria’s second largest city.
With a growing population (an estimated              Many areas have already increased
12.2% growth from 2006 to 2016), and the             significantly. Mount Duneed and
future development portfolio to match,               Armstrong Creek have seen a huge
the City of Greater Geelong is set to make           41.2% growth in online shopping. And as
a big impact online in the coming year.              these pristine seaside locations continue

                                                                                                    26
                                                     to attract more young families looking
                                                     for affordable housing options (median
                                                     age here is 26, eleven years below the                   years
                                                     national average) this figure is only          Mount Duneed’s
                                                     expected to keep growing.                      average age of 26,
                                                                                                    eleven years below
                                                     Other high growth areas include Barwon         the national average,
                                                     Heads at 30.5%, and Ocean Grove at             has helped drive online
                                                     19.8% – both also showing great potential      shopping growth.
                                                     for the future.

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Media

Inside Australian Online Shopping © Australia Post
Media
The Media category which includes books,             Online purchases
music, software and magazines had a huge             growth rate
increase in popularity last year. In fact, it
achieved the highest growth rate of any
category up 22.9% from 2015, accounting for                                                                                22.7%         23.4%

                                                     22.9                  %
12.9% of all online purchases in Australia.
Books alone made up over 80% of online Media
purchases and is growing at 24% year-on-year.
                                                                               Share of online
                                                                               purchases
The channel shift from physical to
online stores in recent years has
propelled Media to the third most                                                                         Metro vs

                                                                               12.9
popular online category overall.                                                                          regional
                                                                                                 %        growth

Australians across all consumer segments have
                                                                                                                             METRO       REGIONAL
contributed fairly evenly. Interestingly, one in
every ten online Media sales is coming from
the Youth segment.1
There’s been strong growth in all states, with                             27.0%
Northern Territory and Victoria leading the way.                                        25.3%    25.2%      24.7 %
                                                                National                                             24.0%     24.0%
Growth in regional areas was up 23.4%,                          average
slightly topping the metropolitan growth rate                   22.9%                                                                  20.8%
of 22.7%. Very Remote Regions of Australia6
had a significant impact on the figures, with                                                                                                  16.4%
a growth rate of 30%.

                                                     Growth
                                                     by state

                                                                               NT         VIC        SA      TAS     NSW       ACT     QLD       WA

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There’s no typical Media buyer.
    Top buying                                                                                                     The category attracts people
    locations                                                                                                      from all segments, with the top
                                                                                                 5                 ten performing areas displaying
                                                                                                                   a diverse range of demographic
                                                                                                     8             characteristics.
                                                                                                         9
                                                                                                                   The Gosford postcode, on the NSW Central
                                                                                                                   Coast, took out top spot for online Media, with
                                                                                                             4     the suburbs of Wyoming, Erina and Narara
                                                                                                         2         making up 38% of purchases there. Families
                                                                                                                   with children are under-represented here, with
                                                                                                                   the median age sitting somewhere between
                                                                                                                   early 40s and mid-50s.
                                                                                                                   Coming in tenth place, and with quite a different
                                                                                                                   demographic, Cranbourne and Cranbourne
6                                                                                                        1         East in Melbourne have the fastest-growing
                                                                                                                   populations in Victoria. They’ve also been the
                                                                                                                   fastest growing areas for online Media, with a
                                                                                                                   growth rate of 9.8 percentage points above the
                                                                                                                   national average. As the suburb continues to
    Rank       Top buying locations                  Growth rate (%)                                               expand, young couples and families are settling
                                                                                        3                          in – with the median age sitting in the early 30s.
    1          Gosford, 2250                                 16.4                   7       10
    2          Toowoomba, 4350                               27.3
    3          Point Cook, 3030                              25.9

    4          Nambour, 4560                                 11.4

    5          Mackay, 4740                                  11.0                                                 1
    6          Mandurah, 6210                                10.8
    7          Grovedale, 3216                               23.9
                                                                       Above
                                                                                                                 Gosford’s median
    8          Rockhampton City, 4700                         -7.8     average                                   age is between
                                                                       growth
    9          Gladstone, 4680                                 3.4
                                                                                                                 early 40s and
                                                                       Lower than                                mid-50s.
    10         Cranbourne, 3977                              32.7      average
                                                                       growth

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