Inside Australian Online Shopping - eCommerce Industry Report - Australia Post

 
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Inside Australian Online Shopping - eCommerce Industry Report - Australia Post
Inside       eCommerce
             Industry
Australian   Report
                         Contents

Online                   State of

Shopping
                         eCommerce

                         Online
                         shopping
                         trends

                         Variety
                         Stores

                         Fashion
                         & Apparel

20 21
                         Home
                         & Garden

                         Health
                         & Beauty

                         Hobbies &
                         Recreational
                         Goods

                         Specialty
                         Food &
                         Liquor

                         The delivery
                         experience
Inside Australian Online Shopping - eCommerce Industry Report - Australia Post
About this report
                                                                                                 Contents
Welcome to the sixth edition of the
Inside Australian Online Shopping
Industry Report, an in-depth study                                                               State of
into consumer online buying                                                                      eCommerce

behaviour and trends.
                                                                                                 Online
The report has been prepared using 2019 and                                                      shopping
2020 deliveries data recorded by the Australia                                                   trends
Post Group, unless otherwise stated.
Commentary in this report relating to online
                                                                                                 Variety
shopping is based on an extrapolation of this data.                                              Stores
Year-on-year (YOY) growth numbers are based on
actual or extrapolated transaction volumes.
                                                                                                 Fashion
                                                                                                 & Apparel
    For more eCommerce insights,
    access our monthly market updates at
    auspost.com.au/einsights                                                                     Home
                                                                                                 & Garden

                                                                                                 Health
                                                                                                 & Beauty

                                                                                                 Hobbies &
                                                                                                 Recreational
                                                                                                 Goods

                                                                                                 Specialty
                                                                                                 Food &
                                                                                                 Liquor

                                                                                                 The delivery
                                                                                                 experience

2                                                     Inside Australian Online Shopping   2021
Inside Australian Online Shopping - eCommerce Industry Report - Australia Post
Contents
                                                                                                                                                              Contents
Foreword                            4    Online shopping trends                    14   Specialty retail categories                           29
                                           Sustained participation                 15     Australian retailer perspective                         30
Executive summary                   5      Shopping intent                         16     Variety Stores                                          31
                                                                                                                                                              State of
                                                                                                                                                              eCommerce

                                           Australia's new online shoppers         18     Fashion & Apparel                                       34
                                                                                          Home & Garden                                           37
State of eCommerce                  6      A closer look at April                  19                                                                         Online
                                                                                          Health & Beauty                                         40          shopping
                                           Australia's regular online shoppers     20                                                                         trends
    A monumental year of change     7                                                     Hobbies & Recreational Goods                            43
                                           International supply chains disrupted   22
    Phenomenal eCommerce growth     8                                                     Specialty Food & Liquor                                 46
                                           eCommerce across the globe              23                                                                         Variety
    The lockdown effect             9                                                                                                                         Stores
                                           Aussies shopped around                  24
    Shopping frequency              10
                                           The buy local trend                     25   The delivery experience                               49
    Online shopping participation   11
                                           How Aussies buy online                  27                                                                         Fashion
                                                                                          New eCommerce priorities                                50
    Locations of Australia's        13                                                                                                                        & Apparel
    biggest shoppers                       Payment methods                         28     Preferred delivery points                               52

                                                                                                                                                              Home
                                                                                        Methodology                                           54              & Garden

                                                                                        References                                            55              Health
                                                                                                                                                              & Beauty

                                                                                                                                                              Hobbies &
                                                                                                                                                              Recreational
                                                                                                                                                              Goods

                                                                                                                                                              Specialty
                                                                                                                                                              Food &
                                                                                                                                                              Liquor

                                                                                                                                                              The delivery
                                                                                                                                                              experience

3                                                                                                             Inside Australian Online Shopping        2021
Inside Australian Online Shopping - eCommerce Industry Report - Australia Post
Foreword
                                                                                                                                                                            Contents
31 March 2021

Welcome to the 2021 Australia Post
eCommerce Industry report.                                                                                                                                                  State of
                                                                                                                                                                            eCommerce

A year unlike any other before it,                      Beyond supporting businesses,                      Whether it was helping a business to scale their
2020 was not only full of tremendous                    the local Post Office became more                  operations to meet increased demand, or helping                  Online
                                                                                                                                                                            shopping
                                                                                                           a small business come online for the first time
change for how we live, work and                        important than ever before; staying                through our MyPost Business platforms, it has
                                                                                                                                                                            trends

interact, it also altered the trajectory                open and acting as a vital local hub               been a privilege to use the scope of our national
of the Australian eCommerce industry.                   for Australians, particularly in rural             processing and delivery network to deliver                       Variety
                                                                                                           for Australia.
                                                        and regional Australia, helping                                                                                     Stores
As social distancing, border closures and                                                                  Beyond supporting businesses, the local Post
lockdowns became commonplace, Australians               communities stay connected.
                                                                                                           Office became more important than ever before;
turned online for the things they needed. And they                                                         staying open and acting as a vital local hub for                 Fashion
did so in record numbers with over four in five      Border restrictions, reduced flights and in some      Australians, particularly in rural and regional                  & Apparel
Australian households (almost 9 million) making      instances the closure of some international lanes     Australia, helping communities stay connected.
an online purchase at some point during the year.    created an additional barrier for shoppers looking
Included in that number was more than 1.3 million    to purchase from overseas, and ‘buy local’ trends     As the industry begins to settle and find a new
                                                                                                           normal, it will be important retailers take the                  Home
households that purchased in 2020 that did not       and hashtags gained popularity as shoppers                                                                             & Garden
buy online in 2019.                                  looked to support local businesses through the        opportunity to re-group and look to the year ahead.
                                                     difficult times.                                      I trust business owners can use the insights in
This increased engagement resulted in online                                                               this report, in conjunction with the learnings they
purchases in 2020 growing by 57% YOY, and            Though 2020 was a year full of challenges,            have gained over the past year, to inform future                 Health
Australians spending a record $50.46 billion         it was also one brimming with opportunity for         investment, improve resilience and strengthen
                                                                                                                                                                            & Beauty
online.1 As a percentage of total retail, online     Australian retailers. While businesses had to pivot   their business – ensuring they are well placed to
sales accounted for 16.3%2 – a figure we did not     early and quickly change how they continued           take advantage of future opportunities.
expect to see until about 2023. While this sharp     to serve their customers, research conducted                                                                           Hobbies &
                                                                                                                                                                            Recreational
acceleration in the eCommerce market brought         by Deloitte Access Economics found those                                                                               Goods
Australians in line with where our international     that invested in eCommerce were significantly
peers such as the United States and the United       buffered from the impacts of COVID-19, limiting
Kingdom were pre-pandemic, those markets have        overall revenue losses to 7% between March and                                                                         Specialty
                                                                                                                                    Rodney Boys                             Food &
now also accelerated, and the Australian market      August 2020.3                                                                                                          Liquor
still has some ground to cover.                      During the challenges, Australia Post continued to                             Acting Group Chief
As local eCommerce grew strongly, significant        support Australian businesses, and demonstrated                                Executive Officer and
international disruption led to a contraction in     agility to help those businesses find new ways to                              Managing Director                       The delivery
                                                                                                                                                                            experience
cross-border eCommerce.                              reach their customers.                                                         Australia Post

4                                                                                                                                Inside Australian Online Shopping   2021
Inside Australian Online Shopping - eCommerce Industry Report - Australia Post
Executive summary
                                                                                                                                                                                 Contents
31 March 2021

The events of 2020 and ongoing                          Online shopping was initially driven by necessity      The events of 2020 gave rise to a sudden and
                                                        while bricks and mortar stores were closed, and        permanent shift in buyer behaviour. Shoppers’
effects saw a shift in the industry                     this habit became ingrained even as restrictions       habits have changed and while they are more
                                                                                                                                                                                 State of
                                                                                                                                                                                 eCommerce
that we could never have foreseen.                      eased. Other factors were also at play, such as        engaged than ever, they are also more comfortable
One thing is clear, the resulting                       social distancing and the shift to working from        buying from a broader cross-section of retailers
                                                        home, adding to the sustained engagement               and categories. This poses a question for retailers:              Online
transformation has brought about                        with online.                                           how can they improve the experience they deliver                  shopping
a significant step-change for                                                                                  for their customers and by extension, continue to                 trends

                                                                                                               be competitive?
eCommerce in Australia.                                     Each month saw an average of                       In my view, it needs to be a collaborative effort.
Last year, 9 million Australian households shopped          1 million additional households                    A seamless end-to-end experience is critical,
                                                                                                                                                                                 Variety
                                                                                                                                                                                 Stores
online – that’s 82% of all households. We saw this          buying online when compared to                     and the power of partnerships between retailers,
play out in real-time, and you’ll see as you read                                                              supply chains, and delivery partners is even
through this report the exciting implications of this
                                                            2019. This can be attributed to                    more important, in order to continue meeting the
as we plan for the months and years ahead.                  two key factors: regular shoppers                  evolving needs of our customers.                                  Fashion
                                                                                                                                                                                 & Apparel
At the height of the first COVID-19 wave, the               buying more frequently and new                     Through the early months of 2021 we’ve continued
                                                                                                               to see around 5 million households shopping
national lockdown saw online purchase growth                shoppers entering the market for                   online each month. While the effects of the
rise to a level which had not been seen before
outside of a key sales period. Then again, during           the first time.                                    pandemic may still be felt for some time, business                Home
                                                                                                                                                                                 & Garden
Victoria’s second wave, a new record was set                                                                   and consumer confidence continues to improve.
eclipsing the initial growth numbers.                   More than 1.3 million new households entered           We’ve reached a new level, and online has never
                                                        the market last year, with the largest cohort of       been more in focus.
These events set a new baseline for the remainder
of the year. Although restrictions eased and            these shopping online for the first time in April.                                                                       Health
                                                        To understand their future buying behaviour,                                                                             & Beauty
online shopping activity softened, volumes never
returned to the pre-pandemic level. This was            we tracked them through to December. Had they
evident in November when the combination of             bought online out of pure necessity, or would
the Cyber Sales and people shopping early for           a pattern start to form? The data revealed that                                                                          Hobbies &
                                                                                                                                                                                 Recreational
Christmas saw the month become the biggest              almost half of this new contingent continued to
                                                                                                                                                                                 Goods
in Australian online shopping history.                  buy online on a frequent basis (in at least three of
                                                        the months that followed April). Many of the new
                                                        shoppers had converted into regular shoppers.                                                                            Specialty
                                                                                                                                                                                 Food &
                                                                                                                                                                                 Liquor
                                                                                                                                         Ben Franzi
                                                                                                                                         General Manager,
                                                                                                                                         Parcel & Express Services               The delivery
                                                                                                                                                                                 experience
                                                                                                                                         Australia Post

5                                                                                                                                     Inside Australian Online Shopping   2021
Inside Australian Online Shopping - eCommerce Industry Report - Australia Post
State of
eCommerce
                                                       Contents

                                                       State of
                                                       eCommerce

                                                       Online
                                                       shopping
                                                       trends

                                                       Variety
                                                       Stores

                                                       Fashion
                                                       & Apparel

                                                       Home
                                                       & Garden

                                                       Health
                                                       & Beauty

                                                       Hobbies &
                                                       Recreational
                                                       Goods

                                                       Specialty
                                                       Food &
                                                       Liquor

                                                       The delivery
                                                       experience

6           Inside Australian Online Shopping   2021
Inside Australian Online Shopping - eCommerce Industry Report - Australia Post
STATE OF ECOMMERCE

A monumental year                                                                                                         Contents

of change
                                                                                                                          State of
The World Health Organisation                                                                                             eCommerce
declared COVID-19 a global pandemic
on 11 March 2020.4                                                                                                        Online
                                                                                                                          shopping
Within days, the Australian government had                                                                                trends
introduced measures to slow the spread and
by the end of March all Australian states had
implemented additional lockdown restrictions                                                                              Variety
                                                                                                                          Stores
to help flatten the curve.5
Australian consumers had no choice but to change
their shopping behaviours, driving a dramatic shift
                                                                                                                          Fashion
in online shopping behaviour.                                                                                             & Apparel

                                                                                                                          Home
                                                                                                                          & Garden

                                                                                                                          Health

                                                      9 mil
                                                                                                                          & Beauty

                                                                                                                          Hobbies &
                                                                                                                          Recreational
                                                                                                                          Goods

                                                                                                                          Specialty
                                                                                                                          Food &
                                                                                                                          Liquor

                                                      Aussie households                                                   The delivery

                                                      shopped online in 2020                                              experience

7                                                                              Inside Australian Online Shopping   2021
Inside Australian Online Shopping - eCommerce Industry Report - Australia Post
STATE OF ECOMMERCE

Phenomenal                                                                                                                              Contents

eCommerce growth
                                                                                                                                        State of
Spending more time at home than ever                                                                                                    eCommerce
before, people pulled out phones and
laptops to do their shopping.                                                                                                           Online
                                                                                                                                        shopping
In Australia, online shopping growth for the                                                                                            trends
12 months to 31 December topped 57% YOY.
In fact, it took just over eight months of
                                                      Retail spend
online shopping in 2020 to eclipse 12 months’
                                                      $310.29B
                                                                                                                                        Variety
worth in 2019.                                                                                                                          Stores

More Australians shopped online than ever
before in 2020. Around four in five households –      up 9.7% YOY                                                                       Fashion
that’s almost nine million – purchased online at
                                                                                                                                        & Apparel
some point during the year. Every month during        Online goods spend
2020, an average of around 1 million additional
households shopped online compared to 2019.
                                                      $50.46B                                                                           Home

                                                      up 57% YOY
With all this online activity, purchase volumes                                                                                         & Garden
soared. Australians spent an incredible $50.46
billion online over the year, up from $32.1 billion
in 2019 and accounting for 16.3% of retail spend
                                                                                                                                        Health
(excluding cafés, restaurants and takeaway food).2                                                                                      & Beauty

                                                      16.3%
                                                                                                                                        Hobbies &
                                                                                                                                        Recreational
                                                                                                                                        Goods

                                                                                                                                        Specialty
                                                                                                                                        Food &
                                                                                                                                        Liquor

                                                                                                                                        The delivery

                                                      Online share of retail spend in 2020                                              experience

8                                                                                            Inside Australian Online Shopping   2021
Inside Australian Online Shopping - eCommerce Industry Report - Australia Post
STATE OF ECOMMERCE

The lockdown effect                                                                                                                                                           Contents

The first wave:                                     The second wave:                                        Subsequent lockdowns:
A national lockdown                                 A look at Victoria                                      South Australia and New South Wales                               State of
                                                                                                                                                                              eCommerce

Australians began living under                      After a brief respite, metropolitan                     As Victorian restrictions gradually
strict new lockdown rules on                        Melbourne and Mitchell Shire went                       eased throughout November,                                        Online

Monday 23 March.5                                   back into lockdown in early July.5                      conditions changed in South Australia.                            shopping
                                                                                                                                                                              trends

With restrictions closing non-essential services    At this point, the Australian eCommerce industry        In Adelaide, a COVID-19 outbreak in
like pubs, cinemas and gyms, and with Easter        started running at two speeds.                          mid-November prompted a state-wide lockdown7                      Variety
holiday plans cancelled, Australians began          By the end of July, Victorian online purchases had      which ended up only lasting three days.                           Stores
shopping online in droves.                          grown almost 17% above the state’s April peak.          This, combined with Black Friday and Cyber
Growth for the seven days from Easter Sunday                                                                Monday, saw online purchases grow by 64% YOY
                                                    In early August, Victoria entered a state of disaster   in the state that month. In fact, November was
was up more than 135% YOY with all categories       and Melbourne moved to Stage 4 restrictions,6
                                                                                                                                                                              Fashion
performing strongly. Variety Stores (188% YOY)                                                              South Australia’s biggest online shopping month                   & Apparel
                                                    with strict rules to limit the movement of people       on record, with purchases 25% higher than the
and Home & Garden (177% YOY) were                   and a city-wide curfew imposed. Non-essential
the front-runners.                                                                                          previous record set in April.
                                                    retailers were forced to close their doors once
                                                                                                                                                                              Home
The number of households shopping online for        again, and eCommerce went into overdrive.                                                                                 & Garden
the month of April grew to a massive 5.2 million,   Record growth of 169.6% YOY was recorded in             Around mid-December, a new
and online goods spend grew by 95% YOY.1            the state for the month of August, with purchases       cluster of COVID-19 cases emerged
                                                    21% higher than July. By comparison, national
                                                    growth in August was 85% YOY.
                                                                                                            on the Northern Beaches of                                        Health
Growth following Easter Sunday                                                                              New South Wales.                                                  & Beauty

          All categories                                                                                    The region went into lockdown just before

          135%
                                                                                                                                                                              Hobbies &
                                                                                                            Christmas, with tight restrictions over the holiday               Recreational
                                                                                                            period and lesser restrictions for greater Sydney.8               Goods
                                                                                                            Residents heeded advice by avoiding the
          Variety Stores                                                                                    Boxing Day sales in person and instead heading

          188%
                                                                                                                                                                              Specialty
                                                                                                            online. Unsurprisingly, NSW accounted for 34.5%                   Food &
                                                                                                            of all online purchases nationally in December –                  Liquor
                                                                                                            the highest for the state in 2020.
          Home & Garden

          177%
                                                                                                                                                                              The delivery
                                                                                                                                                                              experience

9                                                                                                                                  Inside Australian Online Shopping   2021
Inside Australian Online Shopping - eCommerce Industry Report - Australia Post
STATE OF ECOMMERCE

Shopping frequency                                                                                                                                       Contents

COVID-19 restrictions had a significant
impact on how often Australians                                                                                                                          State of
                                                                                                                                                         eCommerce
shopped online.                                    Of the 2.3 million low frequency       Of the 0.5 million high frequency
                                                   online shoppers who made an            online shoppers who made an
When comparing purchases made between
                                                   online purchase less than four times   online purchase at least once a week                           Online

                                                   52% 80%
March and December in 2019 to 2020, the                                                                                                                  shopping
percentage of customers who shopped less than      between March and December 2019...     between March and December 2019...                             trends

four times reduced. Additionally, the percentage
of customers who purchased each week increased
                                                                                                                                                         Variety
in 2020 for the same period, growing from 6% in
                                                                                                                                                         Stores
2019 to 16%.

                                                                                                                                                         Fashion
                                                                                                                                                         & Apparel

                                                   shopped online more                    either maintained or increased their
                                                                                          online shopping frequency in 2020
                                                   frequently in 2020, and
                                                                                                                                                         Home
                                                                                                                                                         & Garden
                                                                                          (by an average 19.6%).

                                                   26%
                                                   shopped at least 10 times between
                                                                                                                                                         Health
                                                                                                                                                         & Beauty

                                                                                                                                                         Hobbies &
                                                   March and December 2020.                                                                              Recreational
                                                                                                                                                         Goods

                                                                                                                                                         Specialty
                                                                                                                                                         Food &
                                                                                                                                                         Liquor

                                                                                                                                                         The delivery
                                                                                                                                                         experience

                                                                                                              Inside Australian Online Shopping   2021
10                                                                                                     Inside Australian Online Shopping          2021
STATE OF ECOMMERCE

Online shopping                                                                                           Metro YOY growth                                                  Contents

participation accelerated
In Australia, pre-pandemic predictions               eCommerce experienced
                                                                                                          60%                                                               State of
                                                                                                                                                                            eCommerce
for eCommerce in 2020 hovered at                     high growth across both metropolitan                 Regional YOY growth

                                                                                                          50.7%
around 12-13% of total retail spend.                 and regional areas nationwide.                                                                                         Online
In fact, the online share of retail spend                                                                                                                                   shopping
                                                     That said, when it comes to share of online                                                                            trends
hit 16.3% last year.                                 purchases, around seven in ten were made in
                                                     metropolitan areas, with the remainder spread
This extraordinary growth brought the Australian
                                                     across regional and remote Australia.                                                                                  Variety
market into line with other western eCommerce                                                                                                                               Stores
leaders such as the United Kingdom, Denmark
and the United States, where on average 15-18%
of retail spend was captured online in 2019.                                                                                                                                Fashion
That said, compared to Asian countries such as                                                                                                                              & Apparel
China and South Korea, Australia still lags behind
– these nations have an online penetration rate of   Throughout 2020, three new                           This record was short-lived. The Victorian
almost 30%.9                                                                                              lockdown in August triggered another surge in
                                                     eCommerce records were set as online                 online shopping and pushed purchases 5.4%
                                                                                                                                                                            Home
While this sharp acceleration in the eCommerce       shopping accelerated over the year.                  higher. In the week commencing 16 August, sales
                                                                                                                                                                            & Garden
market brought Australians in line with where
                                                                                                          events – Afterpay Day and Click Frenzy Sports –
our international peers such as the United States    In April, online purchases soared 6.8% higher than   drove the largest single week of eCommerce for
and the United Kingdom were pre-pandemic,            the previous record online shopping period – the                                                                       Health
                                                                                                          the year to date.
those markets have now also accelerated and the      30 days to 18 December 2019, which encompassed                                                                         & Beauty
Australian market still has some ground to cover.    the popular cyber sale events (Black Friday and      November was tipped to be the record month of
                                                     Cyber Monday), and the pre-Christmas rush.           the year, and it didn’t disappoint. Many Australians
                                                                                                          took advantage of the Black Friday and Cyber                      Hobbies &

                                                     5.5 mil
                                                                                                                                                                            Recreational
                                                                                                          Monday sales, getting their festive shopping
                                                                                                                                                                            Goods
                                                                                                          in early. Online purchases for the month grew
                                                                                                          55.6% YOY, topping August 2020 by 7%. With
                                                                                                          many retailers starting sales early, the week                     Specialty
                                                                                                          commencing 23 November (which included Black                      Food &
                                                                                                                                                                            Liquor
                                                                                                          Friday) grew 48% YOY. The following week saw
                                                                                                          online purchases grow 42% YOY, making it the
                                                     households shopped online in November                biggest week in Australian eCommerce history.                     The delivery
                                                                                                                                                                            experience

11                                                                                                                               Inside Australian Online Shopping   2021
STATE OF ECOMMERCE

Distribution of online purchases by state and territory                                                                                                                Contents

                       Pandemic               National        Melbourne         Melbourne           Melbourne             Sydney
                       declared               restrictions    Stage 3           Stage 4             restrictions easing   COVID-19                                     State of
                                              easing                                                                      restrictions                                 eCommerce

                                                                                                        SA lockdown
                                                                                                        3 days
                                                                                                                                                                       Online
                                                                                                                                                                       shopping
                                                                                                                                                                       trends

                                                                                                                                                                       Variety
                                                                                                                                                                       Stores

                                                                                                                                 New South Wales

                                                                   36%
                                                                                                                                 50.5% YOY growth                      Fashion
                                                                                                                                                                       & Apparel
                                                                                                                                 Victoria
                                                                                                                                 81.9% YOY growth
                                                                   of all online purchases
                                                                   were made in Victoria                                         Queensland                            Home
                                                                   from July to October                                          48.3% YOY growth                      & Garden

                                                                                                                                 Western Australia
                                                                                                                                 44.4% YOY growth
                                                                                                                                                                       Health
                                                                                                                                 South Australia                       & Beauty
                                                                                                                                 46.6 YOY growth

                                                                                                                                 Tasmania and
                                                                                                                                                                       Hobbies &
                                                                                                                                 the Territories
                                                                                                                                                                       Recreational
                                                                                                                                 43% YOY growth                        Goods

                                                                                                                                                                       Specialty
                                                                                                                                 Use our interactive graph to          Food &
                                                                                                                                 explore percentage of online          Liquor
                                                                                                                                 purchases by state and
                                                                                                                                 territory. Visit:
     Jan    Feb      Mar          Apr   May            Jun   Jul          Aug           Sep   Oct    Nov           Dec
                                                                                                                                                                       The delivery
     2020                                                                                                                        auspost.com.au/einsights
                                                                                                                                                                       experience

12                                                                                                                        Inside Australian Online Shopping     2021
STATE OF ECOMMERCE

Outer suburbs in Victoria                                                                                                                                       Contents

and NSW were home to the                               Top 10 online shopping locations by purchase volume       YOY growth
biggest online shoppers                                                                                                                                         State of
                                                                                                                                                                eCommerce
                                                         1   Point Cook, VIC 3030                                  119.0%
Unsurprisingly, six of the top 10 online
shopping locations in 2020 were in                       2   Cranbourne, VIC 3977                                  114.6%                                       Online

Victoria, up from just three in 2019.
                                                                                                                                                                shopping
                                                                                                                                                                trends
This growth was no doubt driven by                       3   Hoppers Crossing, VIC 3029                            120.6%
the state’s COVID-19 restrictions,
                                                                                                                                                                Variety
which saw most retail stores close in                                                                                                                           Stores
                                                         4   Craigieburn, VIC 3064                                 137.2%
metropolitan Melbourne for months.
Point Cook, in Melbourne’s west, retained its title      5   Doreen, VIC 3754                                      143.4%                                       Fashion
as Australia’s top online shopping location for                                                                                                                 & Apparel
the sixth year running, with growth of more than
119% YOY. Two more Victorian suburbs round out           6   Toowoomba, QLD 4350                                   55.7%
the top three, with the south-eastern suburb of                                                                                                                 Home
Cranbourne a close second, followed by Hoppers                                                                                                                  & Garden
                                                         7   Liverpool, NSW 2170                                   57.6%
Crossing in the outer west. Doreen in Melbourne's
north was one of the year’s biggest movers,
climbing from 18th position to fifth over the course     8   Rouse Hill, NSW 2155                                  76.2%                                        Health
of 2020. These suburbs are in major growth areas,                                                                                                               & Beauty
with new housing estates popular among young
professionals and families.10                            9   Ballarat, VIC 3350                                    74.5%
                                                                                                                                                                Hobbies &
In each of the nation’s top five postcodes,                                                                                                                     Recreational
residents shopped more than twice as much as            10   Gosford, NSW 2250                                     59.3%                                        Goods
they did in 2019, with at least 90% of households
having shopped online. For the top four locations,
                                                                                                                                                                Specialty
online shopping participation increased by five                                                              National average                                   Food &

                                                                                                      57% YOY
percentage points or more in 2020.                                                                                                                              Liquor

                                                                                                                                                                The delivery
                                                                                                                                                                experience

13                                                                                                                   Inside Australian Online Shopping   2021
Online shopping
trends
                                                             Contents

                                                             State of
                                                             eCommerce

                                                             Online
                                                             shopping
                                                             trends

                                                             Variety
                                                             Stores

                                                             Fashion
                                                             & Apparel

                                                             Home
                                                             & Garden

                                                             Health
                                                             & Beauty

                                                             Hobbies &
                                                             Recreational
                                                             Goods

                                                             Specialty
                                                             Food &
                                                             Liquor

                                                             The delivery
                                                             experience

14                Inside Australian Online Shopping   2021
ONLINE SHOPPING TRENDS

Sustained participation                                                                        Contents

The most exciting trend emerging
from an extraordinary year of growth                                                           State of
                                                                                               eCommerce
in eCommerce was the sustained
participation in online shopping.
                                                                                               Online
                                                                                               shopping
In many cases, people shopped more online as
                                                                                               trends
the year progressed. This indicates that shoppers
are becoming more comfortable with using
eCommerce for their day-to-day shopping needs.                                                 Variety
                                                                                               Stores
Overall, four in five (82%) Australian households
made an online purchase during 2020, up from
75% in 2019. Regular shoppers – those that
                                                                                               Fashion
shopped in both 2019 and 2020 – began shopping                                                 & Apparel
more frequently and from a wider cross-section
of retailers.
                                                                                               Home
                                                                                               & Garden

                                                                                               Health
                                                                                               & Beauty

                                                                                               Hobbies &
                                                                                               Recreational
                                                                                               Goods

                                                                                               Specialty
                                                                                               Food &
                                                                                               Liquor

                                                                                               The delivery
                                                                                               experience

15                                                  Inside Australian Online Shopping   2021
ONLINE SHOPPING TRENDS

Aussies intend to keep                                                                                                             Contents

shopping online
                                                                                                                                   State of
In the ABS Household Impacts                                                                                                       eCommerce
of COVID-19 Survey, a third of
respondents indicated they prefer                                                                                                  Online
to shop online now more than they                                                                                                  shopping
                                                                                                                                   trends
did before the pandemic.11
These figures are even higher in states that have                                                                                  Variety
experienced greater case numbers and tougher                                                                                       Stores
restrictions – 43% in Victoria and 35% in
New South Wales
What’s more, in a December 2020 Australia Post                                                                                     Fashion
survey, respondents indicated they are shopping                                                                                    & Apparel
online 55% more than before the pandemic.12
And, while they expect their online shopping
frequency to decrease by about half as the                                                                                         Home
health crisis abates, this is still 28% higher than                                                                                & Garden
pre-COVID-19 levels.
These figures suggest that the extraordinary
                                                      Shoppers expect their online

                                                      28%
events of 2020 will have a lasting impact on                                                                                       Health
                                                                                                                                   & Beauty
eCommerce in Australia.
                                                      shopping frequency to remain
                                                                                                                                   Hobbies &
                                                                                                                                   Recreational
                                                                                                                                   Goods

                                                                                                                                   Specialty
                                                                                                                                   Food &
                                                                                                                                   Liquor

                                                                                                                                   The delivery

                                                      higher than before the pandemic                                              experience

16                                                                                      Inside Australian Online Shopping   2021
STATE OF ECOMMERCE

                                                                                 Contents

                                                                                 State of
                                                                                 eCommerce

                                                                                 Online
                                                                                 shopping
                                                                                 trends

1.36 mil
                                                                                 Variety
                                                                                 Stores

                                                                                 Fashion
                                                                                 & Apparel

                                                                                 Home
Aussie households made an online                                                 & Garden

purchase for the first time in 2020
                                                                                 Health
                                                                                 & Beauty

                                                                                 Hobbies &
                                                                                 Recreational
                                                                                 Goods

                                                                                 Specialty
                                                                                 Food &
                                                                                 Liquor

                                                                                 The delivery
                                                                                 experience

17                                    Inside Australian Online Shopping   2021
ONLINE SHOPPING TRENDS

                                                                                                                                       48%
Australia's new                                        Average number of online purchases for                                                                                  Contents

online shoppers                                        new online shoppers increased in 2020
                                                                                                                                       of new online shoppers
                                                                                                                                                                               State of
Of the nine million households that                                                                                                    made purchases from:

                                                                          2.8
                                                                                                                                                                               eCommerce
bought online in 2020, 1.36 million                                                                                                    • Home & Garden
made an online purchase for the                                                        items                                           • Variety Stores                        Online
first time.                                                                    in December                                                                                     shopping
                                                                                                                                                                               trends

And of these initial online purchases, more than

                                                                          1.4
93% (1.25 million) took place in the ten months
                                                                                                                                                                               Variety
from March to December 2020.                                                                           Sorrento, VIC 3943
                                                                                       items                                                                                   Stores
To offer a sense of the Australians who were                                        in January
new to eCommerce in 2020, we’ve mapped our                                                             Blairgowrie, VIC 3942
deliveries data against Roy Morgan’s communities.                                                                                                                              Fashion
They mainly fell into the Metrotechs, Doing Fine                                                        Rockbank, VIC 3335                                                     & Apparel

and Fair Go communities. Drilling down, the
dominant Helix personas were Budget Living,                                                                Cowes, VIC 3922
Fit and Fab and Relaxed Living.                                                                                                                                                Home
                                                                                                                                                                               & Garden
This group of new shoppers typically come from         Dominant Helix personas                         Austral, NSW 2179
two distinctly different household types. The first    among new online shoppers:
are young and mid-life families, who are on-trend                                                      Riverstone, NSW 2765
and tech-savvy yet also conscious and pragmatic        • Budget Living                                                                                                         Health
                                                                                                                                                                               & Beauty
about what they buy and where their money goes.        • Fit and Fab                                    Anglesea, VIC 3230
The second are older households, likely retired
                                                       • Relaxed Living
and often living more rurally.                                                                     Port Macdonnell, SA 5291                                                    Hobbies &
Looking at the top postcodes for new shoppers,                                                                                                                                 Recreational
                                                                                                                                                                               Goods
it comes as no surprise that all but three of the                                                   Point Lonsdale, VIC 3225
top ten are in Victoria – after all, the state faced
far longer and more limiting restrictions than                                                         Wollert, VIC 3750                                                       Specialty
others in 2020.                                                                                                                                                                Food &
                                                                                                                                                                               Liquor

                                                                                                 Top 10 online shopping locations                                              The delivery
                                                                              Regional                                              Major City                                 experience
                                                                                                  by percentage of new shoppers

18                                                                                                                                  Inside Australian Online Shopping   2021
ONLINE SHOPPING TRENDS

A closer look at April:                                                                                                               Contents

New online shoppers
                                                                                                                                      State of
While the months following the                                                                                                        eCommerce
declaration of the COVID-19
pandemic saw a substantial increase                                                                                                   Online
in online shopping, the surge of new                                                                                                  shopping
                                                                                                                                      trends
online shoppers in April was quite
extraordinary.
                                                                                                                                      Variety
In fact, more than 240,000 Australian households                                                                                      Stores
shopped online for the first time in April. Of these
households, 118,000 went on to shop online again
in at least three of the remaining eight months of                                                                                    Fashion
the year, and an average 90,000 returned to shop                                                                                      & Apparel
online every month between May and December.

                                                       118k +
                                                                                                                                      Home
What's more, these new online shoppers                                                                                                & Garden
increased their purchase frequency over time,
from an average 1.9 times in April to 2.9 times
in December. And as they became more familiar
                                                                                                                                      Health
with shopping online, their spend diversified                                                                                         & Beauty
across more categories. By December, 22%
purchased from three or more specialty retail
categories, up from 16% in April.                                                                                                     Hobbies &
                                                                                                                                      Recreational
                                                                                                                                      Goods

                                                       of the households new to online
                                                       shopping in April returned to                                                  Specialty
                                                                                                                                      Food &

                                                       purchase in at least three of the                                              Liquor

                                                       remaining months in 2020                                                       The delivery
                                                                                                                                      experience

19                                                                                         Inside Australian Online Shopping   2021
ONLINE SHOPPING TRENDS

Australia's regular                                     Average number of online purchases                                       Most popular sub-categories                 Contents

online shoppers                                         by regular online shoppers                                               for regular shoppers:

                                                                                                                                 • Major & Discount Stores                   State of
Nationwide, 7.6 million households are
                                                                             28      items                                       • Online Marketplaces                       eCommerce
considered regular online shoppers                                                   in 2020                                     • Homewares & Appliances
(those that shopped in both 2019
                                                                             18
                                                                                                                                                                             Online
and 2020).                                                                           items                                                                                   shopping
                                                                                     in 2019                                                                                 trends

On average, around two thirds (63%) of regular
online shoppers made at least one purchase every
                                                                                                                                                                             Variety
month – up from 45% in 2019. The number who               2019       2020                        Narre Warrren North, VIC 3804                                               Stores
bought at least one item every week more than
doubled from 6% in 2019 to almost 16% in 2020.                                                   Secret Harbour, WA 6173
When mapped against Roy Morgan’s communities,                                                                                                                                Fashion
these shoppers often fall into the Leading                                                       Eatons Hill, QLD 4037                                                       & Apparel
Lifestyles community. The households tend to be
professional, and career and family focused.                                                     Frenchs Forest, NSW 2086
They don’t mind splurging on discretionary items,                                                                                                                            Home
and typically fall into the Bluechip, Visible Success                                                                                                                        & Garden
                                                        Dominant Helix personas                  Wakerly, QLD 4154
and Self-Made Lifestyles Helixes – a mix of young
parents and mid-life families with above-average        among new online shoppers:
income who tend to live in their own homes in                                                    Jerrabomberra, NSW 2619
metropolitan areas.
                                                        • Bluechip                                                                                                           Health
                                                                                                                                                                             & Beauty
All but one of the top 10 postcodes for regular
                                                        • Visible Success                        Wattle Grove, NSW 2173
shoppers are in metro areas. Secret Harbour in          • Self-Made Lifestyles
the outer southern suburb of Perth, which took                                                   Narangba, QLD 4504                                                          Hobbies &
                                                                                                                                                                             Recreational
out second position, is the only inner regional                                                                                                                              Goods
postcode. Unlike the new shopper cohort, which                                                   Mount Annan, NSW 2567
mainly hailed from Victoria, the top postcodes for
regular shoppers are from all over Australia.                                                    Warrandyte, VIC 3113                                                        Specialty
                                                                                                                                                                             Food &
                                                                                                                                                                             Liquor

                                                                                                Top 10 locations by highest                                                  The delivery
                                                                               Regional                                           Major City                                 experience
                                                                                               online shopping participation

20                                                                                                                                Inside Australian Online Shopping   2021
ONLINE SHOPPING TRENDS

Household participation in online shopping                                                                                                                             Contents

Households                 Pandemic               National       Melbourne    Melbourne               Melbourne             Sydney
in millions                declared               restrictions   Stage 3      Stage 4                 restrictions easing   COVID-19                                   State of
                                                  easing                                                                    restrictions                               eCommerce

                                                                                                         SA lockdown
5.5                                                                                                      3 days
                                                                                                                                                                       Online
                                                                                                                                                                       shopping
5.0                                                                                                                                                                    trends

4.5
                                                                                                                                                                       Variety
                                                                                                                                                                       Stores

4.0
                                                                                                                                   Variety Stores

                                                                                                                                   Fashion & Apparel                   Fashion
3.5                                                                                                                                                                    & Apparel
                                                                                                                                   Health & Beauty
3.0                                                                                                                                Home & Garden
                                                                                                                                                                       Home
                                                                                                                                   Hobbies &                           & Garden
2.5                                                                                                                                Recreational
                                                                                                                                   Goods

2.0                                                                                                                                Specialty Food                      Health
                                                                                                                                   & Liquor                            & Beauty

1.5                                                                                                                                Media

                                                                                                                                   Total households                    Hobbies &
                                                                                                                                                                       Recreational
1.0                                                                                                                                shopping online
                                                                                                                                                                       Goods

0.5                                                                                                                                                                    Specialty
                                                                                                                                   Use our interactive                 Food &
                                                                                                                                   graph to explore online             Liquor
0.0
                                                                                                                                   shopping household
                                                                                                                                   participation. Visit:
          Jan    Feb     Mar          Apr   May            Jun   Jul         Aug          Sep   Oct   Nov           Dec
                                                                                                                                                                       The delivery
          2020                                                                                                                     auspost.com.au/einsights
                                                                                                                                                                       experience

21                                                                                                                          Inside Australian Online Shopping   2021
ONLINE SHOPPING TRENDS

International supply chains                                                                          Contents

were disrupted in 2020
                                                                                                     State of
By June the impacts of rising COVID-19                                                               eCommerce
cases were being felt worldwide.
Global eCommerce experienced severe delays                                                           Online
                                                                                                     shopping
due to congestion in shipping lanes, disruption                                                      trends
of supply chains, and the increase in businesses
trading online. Australians once again turned to
local retailers, with 57% of shoppers stating they                                                   Variety
wanted to support local businesses, and 52%                                                          Stores
stating that delivery from overseas was taking
far too long.13
At the same time, 73% of small and medium                                                            Fashion
                                                                                                     & Apparel
Australian businesses reported having to change
how they operate, rethink supply chains and
partner with local suppliers. It is expected this
local focus will help build resilience, so businesses                                                Home
are better prepared to respond and adapt to future                                                   & Garden

crises and challenges.14
Looking forward, a global survey found that 67%
                                                                                                     Health
of participants agree that, ‘In future, I will buy more                                              & Beauty
online from e-retailers based in my country’.15
This points to resilience in the domestic market.
Merchants will be keen to continue capitalising                                                      Hobbies &
on the increased interest in local goods, and                                                        Recreational
shoppers in turn have discovered the practical                                                       Goods
and social benefits of buying local.
                                                                                                     Specialty
                                                                                                     Food &
                                                                                                     Liquor

                                                                                                     The delivery
                                                                                                     experience

22                                                        Inside Australian Online Shopping   2021
ONLINE SHOPPING TRENDS

eCommerce across                                Frequency of online shopping by country                                                                                                                       Contents

the globe                                       Once every
                                                3 months        7.5%                                                                                                                                          State of
A study conducted across 25 nations                                                                                                                                                                           eCommerce
showed those shopping online more
than once a week increased by 22% in            Around 2-3
                                                                11.7%                                                                                                                                         Online
2020 on average, up from 17% in 2019.           times a year                                                                                                                                                  shopping
                                                                                                                                                                                                              trends

In Australia, we exceeded this global average
with an increase of 27% for the same period.
In China, South Korea and India, where
                                                               26.9%                                                                                                                                          Variety
                                                                                                                                                                                                              Stores
eCommerce was already well established,
more than 45% of consumers made an online
purchase weekly.15                              Once a month
                                                                                                                                                                                                              Fashion
                                                                                                                                                                                                              & Apparel

                                                                                                                                                                                                              Home
                                                               27.4%                                                                                                                                          & Garden

                                                Once every
                                                                                                                                                                                                              Health
                                                2 weeks                                                                                                                                                       & Beauty

                                                                                                                                                                                                              Hobbies &
                                                                                                                                                                                                              Recreational
                                                                                                                                                                                                              Goods

                                                                                                                                                                                                              Specialty
                                                                                                                                                                                                              Food &

                                                                                                                                      United Kingdom
                                                               26.5%                                                                                                                                          Liquor

                                                                                                                      United States
                                                                                    South Korea

                                                                                                          Indonesia

                                                                                                                                                                                           Germany
                                                                                                                                                                                  Mexico
                                                                                                                                                       Poland

                                                                                                                                                                 Japan
                                                                            China

                                                                                                                                                                         Spain
                                                                                                  India
                                                                                                                                                                                                              The delivery

                                                                                                                                                                                                     Italy
                                                                Australia                                                                                                                                     experience
                                                Once a week

23                                                                                                                                                              Inside Australian Online Shopping      2021
ONLINE SHOPPING TRENDS

Aussies shopped around                                                                           Contents

Australians quickly discovered more
online options were open to them                                                                 State of
                                                                                                 eCommerce
in 2020. On average, regular online
shoppers bought from a broader
number of retailers.                                                                             Online
                                                                                                 shopping
                                                                                                 trends
Consumers are clearly becoming more comfortable
engaging with the vast array of retailers they have
at their fingertips – hunting down better prices or                                              Variety
offers. They aren’t afraid to buy from somewhere                                                 Stores
new, with survey data showing that in August alone,
one in five (22%) online shoppers purchased from
a retailer they had never purchased from before.                                                 Fashion
                                                                                                 & Apparel

                                                                                                 Home
Percentage of                                                                                    & Garden

                             22%
regular shoppers who
purchased from more
than nine sources
                                                                                                 Health
                                                                                                 & Beauty
            53%              of shoppers
                             purchased from
     36%                     an online store                                                     Hobbies &
                                                                                                 Recreational
                             that was new for                                                    Goods
                             them in 202016
     2019   2020
                                                                                                 Specialty
                                                                                                 Food &
                                                                                                 Liquor

                                                                                                 The delivery
                                                                                                 experience

24                                                    Inside Australian Online Shopping   2021
ONLINE SHOPPING TRENDS

The buy local trend                                                                                                                 Contents

gathered momentum
                                                                                                                                    State of
Natural disasters, economic upheaval                                                                                                eCommerce
and pandemic restrictions raised new
challenges for businesses across                                                                                                    Online
Australia, particularly those in regional                                                                                           shopping

                                                         257,000 followers
                                                                                                                                    trends
and remote areas.
During summer, Australia was hit hard by

                                                       #BuyFromTheBush
                                                                                                                                    Variety
devastating bushfires that burned more than                                                                                         Stores
12.6 million hectares.17 A flurry of support emerged
for local communities ravaged by the fires,
with donations pouring in. As the crisis passed,                                                                                    Fashion
attention turned to helping these communities                                                                                       & Apparel

                                                       #SpendWithThem
rebuild their homes and reinvigorate the
local economy.
There was a noticeable uptake in social media                                                                                       Home
campaigns urging Australians to shop in local                                                                                       & Garden
communities. For example, Grace Brennan’s
#BuyFromTheBush campaign delivered
$5 million to regional small businesses from
its launch in October 2019 (before the fires) to
                                                                             185,000 followers                                      Health
                                                                                                                                    & Beauty
June 2020.18 Other examples include Turia Pitt’s
#SpendWithThem, the NSW government’s
#BuyRegional and Visa’s #WhereYouShopMatters.                                                                                       Hobbies &
                                                                                                                                    Recreational
Regional businesses could promote their products                                                                                    Goods
for free via these campaigns, most of which are
hosted on Instagram.
                                                                                                                                    Specialty
                                                                                                                                    Food &
                                                                                                                                    Liquor

                                                                                                                                    The delivery
                                                                                                                                    experience

25                                                                                       Inside Australian Online Shopping   2021
During the height of the                                                    Contents

Victorian lockdown, the
State Government launched
                                                                            State of

#ClickforVic
                                                                            eCommerce

– a campaign designed to                                                    Online

support local businesses.                                                   shopping
                                                                            trends

                                                                            Variety
     31,000 posts                                                           Stores

                                                                            Fashion
                                                                            & Apparel

                                                                            Home
                                                                            & Garden

                                                                            Health

57%
                                                                            & Beauty

                                                                            Hobbies &
                                                                            Recreational
                                                                            Goods

                                                                            Specialty
                                                                            Food &
                                                                            Liquor

of Aussie online shoppers want                                              The delivery

to support local businesses17                                               experience

26                               Inside Australian Online Shopping   2021
ONLINE SHOPPING TRENDS

How Aussies                                                         Online purchases more evenly                                                                     Contents

buy online                                                          spread throughout the day
                                                                                                                                                                     State of
Australians used more devices than ever before                      Australians spent more time at home in 2020,                                                     eCommerce
to go online. An average of 4.4 devices per adult                   often working more flexible hours. This may help to
were used to access the internet in 2020, up from                   explain why afternoon purchases have risen by 2.7
4.0 in 2019.19                                                      percentage points since 2018, while mid-evening                                                  Online
                                                                    purchases have fallen by 4.4 percentage points.                                                  shopping
                                                                                                                                                                     trends
                                                                    Between April and December 2020, 28% of
                                                                    purchases were made during the mid-evening,
                                                                    down from 31% in 2019.                                                                           Variety
                                                                                                                                                                     Stores

         91%
87%
                                                                                                                                                                     Fashion
                          76%                                                                                                                                        & Apparel
                  69%
                                            61%             60%
                                   56%
                                                    48%
                                                                                                                                                                     Home
                                                                                                                                                                     & Garden

 2019    2020      2019    2020     2019    2020     2019    2020

  Mobile           Laptop           Tablet           Television
                                                                                                                                                                     Health
  phone            computer                          or Smart TV                                                                                                     & Beauty

                                                                                                                                                                     Hobbies &

83%
                                                                                                                                                                     Recreational
                                                                                                                                                                     Goods
                          of adult Australians used
                          the internet for shopping in
                          2020, up from 78% in 2019*                                                                                                                 Specialty
                                                                                                                                                                     Food &
                                                                                                                                                                     Liquor

                                                                                                                                                                     The delivery
                                                                                                                                                                     experience
* Adult internet users in the 6 months to May 2019 and June 2020

27                                                                                                                        Inside Australian Online Shopping   2021
ONLINE SHOPPING TRENDS

Payment methods                                                                                                               Contents

Buy Now Pay Later (BNPL) services
grew in popularity. Market leader                                                                                             State of
                                                                                                                              eCommerce
Afterpay recorded a 15% increase
in active customers during 2020.20
                                                                                                                              Online
While the number of credit cards on issue                                                                                     shopping
                                                                                                                              trends
declined 9.2% to 18.4 million in November 2020,21
survey data shows a significant increase in credit
card usage for online purchases. In fact, 34% of                                                                              Variety
respondents used a credit card to buy online,                                                                                 Stores
an increase of 10 percentage points from 2019.22
This growth may be linked to the number of
new online shoppers in 2020, who may have
                                                                                                                              Fashion
been less familiar with newer payment options                                                                                 & Apparel
such as BNPL.

                                                                                                                              Home
                                                                                                                              & Garden

                                                     34%
                                                                                                                              Health
                                                                                                                              & Beauty

                                                                                                                              Hobbies &
                                                                                                                              Recreational
                                                                                                                              Goods

                                                                                                                              Specialty
                                                                                                                              Food &

                                                     of surveyed shoppers paid
                                                                                                                              Liquor

                                                     for an online purchase with                                              The delivery

                                                     a credit card in 202022                                                  experience

28                                                                                 Inside Australian Online Shopping   2021
Specialty retail
categories
                                                                                  Contents

                                                                                  State of
                                                                                  eCommerce

Read on for online shopping trends
for six key specialty retailer                                                    Online
categories. You'll also discover how                                              shopping
                                                                                  trends
Australian retailers have adapted,
survived and thrived during
                                                                                  Variety
an incredible year of change.                                                     Stores

                                                                                  Fashion
                                                                                  & Apparel

                                                                                  Home
                                                                                  & Garden

                                                                                  Health
                                                                                  & Beauty

                                                                                  Hobbies &
                                                                                  Recreational
                                                                                  Goods

                                                                                  Specialty
                                                                                  Food &
                                                                                  Liquor

                                                                                  The delivery
                                                                                  experience

29                                     Inside Australian Online Shopping   2021
Paul Zahra, CEO of the Australian
Retailers Association, reflects on the
resilience of Australian retailers in                                                                                                                                                     Contents

adjusting to the changing needs of
consumers.
                                                                                                                                                                                          State of
                                                                                                                                                                                          eCommerce
Retailers felt the full brunt of the                     The latest ABS figures show a 20% YOY increase                 Due to COVID-19, we’ve seen
                                                         in household goods in January, and it’s far
pandemic, and experienced a year                         outperforming the other retail categories.
                                                                                                                        about ten years’ worth of trends in
of enormous challenges as well as                        That spike is reflected in the half-year profit                ten months – this is phenomenal!                                  Online
                                                                                                                                                                                          shopping
opportunities.                                           results some of the big retailers have reported                                                                                  trends
                                                         recently and some businesses have even paid                Hence, we expect to see retailers continue to
We’re all looking forward to the rollout of the          back the JobKeeper wage subsidy, given their               reduce their physical footprint and invest heavily
vaccines providing business certainty and                success during the pandemic.                               in digital.                                                           Variety
                                                                                                                                                                                          Stores
stability, but overnight success is not guaranteed.      More than 5.2 million households made an online            Overall, retailers are approaching 2021 with
The economic climate is still a challenging one for      purchase in January – a 25% increase on the same           fresh optimism. Our priority as Australians needs
many retailers, with JobKeeper coming to an end          time last year.                                            to be on ensuring no one is left behind in our
and international border restrictions still in place.                                                               economic recovery.
                                                                                                                                                                                          Fashion
                                                                                                                                                                                          & Apparel
Overall, retail sales in recent months have been
incredibly strong but it doesn’t paint a complete
                                                             You only have to look at Australia
picture of what the sector is going through.                 Post's data and insights to see                           The Australian Retailers Association is Australia’s
Travel retailers, like those at airports and retailers       how the dynamic has shifted.                              largest retail association, representing a $340 billion
                                                                                                                                                                                          Home
                                                                                                                                                                                          & Garden
of both goods and services in CBD locations are                                                                        sector employing more than 1.2 million people.
                                                                                                                       The ARA works to ensure retail success by informing,
struggling and are preparing to shed thousands
                                                         With the incredible growth of online sales,                   protecting, advocating, educating and saving money for
of jobs post JobKeeper. These businesses are                                                                           its 7,500 independent and national retail members.
                                                         and the move towards data-rich decision making                                                                                   Health
in crisis – some have lost 90% of their revenue
                                                         and artificial intelligence, future skills in retail are      To become a member, visit www.retail.org.au                        & Beauty
since the pandemic started and face a long road
                                                         becoming more science based.
back. The Australian Retailers Association (ARA)
continues to advocate strongly to the Federal            Having said that, brick and mortar stores still have
                                                                                                                                                                                          Hobbies &
Government for there to be ongoing targeted              an important role to play – it’s where the bulk of                                                                               Recreational
support to help these deeply affected businesses.        retail sales still occur – so store managers, sales                                                                              Goods
                                                         assistants and the like are still in-demand roles.
At the other end of the scale, many retailers have
done incredibly well through COVID-19, including                                                                                                                                          Specialty
those in household goods. With so many of us                                                                                                                                              Food &
                                                                                                                                                                                          Liquor
confined to our homes during the pandemic,                                                                                                         Paul Zahra
and now choosing to work flexibly, people have                                                                                                     Chief Executive Officer
invested in household items like new furniture or                                                                                                                                         The delivery
office and tech equipment.                                                                                                                         Australian Retailers
                                                                                                                                                                                          experience
                                                                                                                                                   Association

30                                                                                                                                             Inside Australian Online Shopping   2021
Variety Stores                   Throughout 2020, many Australians                           eBay saw a significant rise in sales of puzzles and
                                                                                             video games, and shoppers bought four times as much
                                 turned to online marketplaces to purchase
                                                                                             running, yoga and training equipment than they had the                Contents
                                 everything from appliances and fashion to                   previous year. Bike accessories more than doubled
In terms of share of online      toys and homewares.                                         mid-year before spiking again in November.
purchases, Variety Stores                                                                                                                                          State of
were the clear winners in 2020   Tim MacKinnon shares eBay's insights into
                                                                                                                                                                   eCommerce

and captured 33% of              the changing needs of the nation through
the eCommerce market.            the goods they were purchasing.                                                                                                   Online
                                                                                                                                                                   shopping
                                                                                                                                                                   trends

Category YOY growth

51.1%
                                                                                                                                                                   Variety
                                                          Tim MacKinnon                                                                                            Stores
                                                          Managing Director & VP
                                                          eBay
                                                          Australia and New Zealand                                                                                Fashion
                                                                                                                                                                   & Apparel

                                 At a time of uncertainty, Australians were relying on
                                 online marketplaces like eBay to get what they needed.
                                 Nobody knew how consumers would respond when we                 Face mask sales were up more                                      Home
                                                                                                                                                                   & Garden
                                 first entered this crisis, however eBay Australia saw an        than 700,000% in March (not a
                                 extra million monthly visitors during 2020, bringing the
                                 total average to 12 million unique.
                                                                                                 typo), spiking again in July when
                                 These spikes in visitor levels are normally reserved for        Melbourne went back into lockdown.                                Health
                                                                                                                                                                   & Beauty
                                 the weeks leading up to Christmas, but the busiest day
                                 of 2020 occurred in April. eBay saw another significant     Consumer expectations are on the rise, and we will see
                                 rise in visitors during July when Melbourne went into its   more people launching online businesses. Much of what                 Hobbies &
                                 second lockdown. Smaller increases were also seen as a      we’re seeing today is just the very beginning of the next             Recreational
                                 result of snap lockdowns in various states.                 reinvention of retail, and we expect to see elevated                  Goods

                                 eBay research shows 58% of people felt safer shopping       eCommerce levels for the foreseeable future.
                                 online than in-store, and the increase in online shopping                                                                         Specialty
                                 was largely driven by people having more time to                                                                                  Food &
                                 browse (75%) and being at home to collect deliveries           Explore eBay’s insights and what these mean for the                Liquor
                                 (75%). Australians also noted the financial benefits of        future of eCommerce in their report
                                 online shopping, with 80% saying they can find better          ‘Lockdown: One Year On’.
                                 deals and save money.                                          www.ebayinc.com/lockdownreport                                     The delivery
                                                                                                                                                                   experience
                                 Shopping behaviour reflects how Australians were
                                 feeling through the different phases of the pandemic.

31                                                                                                                      Inside Australian Online Shopping   2021
Variety Stores 2020
                                                                                    Fashion & Apparel 7.3%
                                                                                    Hobbies & Recreational Goods 6.4%

eCommerce snapshot                                                                  Home & Garden 10.3%

                                                                                                                                33%
                                                                                                                                                                    Contents
                                                                                    Other 9%

6.8 mil
                                                                                                                                                                    State of
                                                                                                                                share of all                        eCommerce
                                                                                                                                online purchases
                                                                                  Top 5 online                                                                      Online
                                                                                                                                                                    shopping
                                                                                  shopping locations                                                                trends
households purchased online                                                       by purchase volume
from Variety Stores in 2020                                                                                                                                         Variety
                                                                                   Point Cook, VIC 3030                  115.1%                                     Stores

                                                                                   Hoppers Crossing, VIC 3029                 114.3%
                                                                                                                                                                    Fashion
                                                                                                                                                                    & Apparel
                                                                                   Cranbourne, VIC 3977                 98.7%                YOY growth

State YOY growth                                                                   Craigieburn, VIC 3064          126.3%
                                                                                                                                                                    Home
                                                                                                                                                                    & Garden
     Victoria                                              77.6%                   Doreen, VIC 3754          168.6%

     Australian Capital Territory      48.7%                                                                                                                        Health
                                                                                                                                                                    & Beauty
     New South Wales                  46.1%                                       Metro areas 54.1% YOY growth
                                                                                                                                                                    Hobbies &
     Tasmania                          40.6%                                                                                                                        Recreational
                                                                                                                                                                    Goods
     South Australia          38.5%
                                                                                  Regional areas 43.9% YOY growth                                                   Specialty
     Queensland              38.2%                                                                                                                                  Food &
                                                                                                                                                                    Liquor

     Western Australia      36.1%              National YOY growth

     Northern Territory     20.5%
                                               51.1%                                                                                                                The delivery
                                                                                                                                                                    experience
                                               vs 57% YOY across all categories

32                                                                                                                       Inside Australian Online Shopping   2021
Variety Stores 2020
eCommerce YOY growth                                                                                                                                                                  Contents

YOY growth of                                April                                     August                        November
online purchases                                                                                                                                                                      State of
                                             Overall YOY growth hit 135%.              Victorians drove strong       November saw modest
                                                                                                                                                                                      eCommerce
                                             Major & Discount Stores grew              national growth. Overall      overall category growth
                                             fastest, up 317% YOY.                     category growth was 79%       at just 33% YOY.
350%
                                                                                       YOY, with Major & Discount    South Australia was the
                                                                                       Stores growing over 240%      fastest growing state,                                           Online
                                                                  June                 YOY nationally and 602%       up 48% YOY.                                                      shopping
                                                                                       YOY in Victoria.                                                                               trends
                                                                  End of Financial
300%
                                                                  Year Sales
                                                                  (EOFYS) drove
                                                                  growth of 156%                                                                                                      Variety
                                                                  YOY in the week                                                                                                     Stores
250%                                                              starting 14 June.

                                                                                                                                                                                      Fashion
                                                                                                                                                                                      & Apparel
200%

                                                                                                                                                                                      Home
150%                                                                                                                                                                                  & Garden

                                                                                                                                                                                      Health
100%                                                                                                                                                                                  & Beauty

                                                                                                                                                  Baby Product Stores
                                                                                                                                                                                      Hobbies &
50%                                                                                                                                               Major &
                                                                                                                                                                                      Recreational
                                                                                                                                                  Discount Stores                     Goods

                                                                                                                                                  Marketplaces

0%                                                                                                                                                Online                              Specialty
                                                                                                                                                  Discount Stores                     Food &
                                                                                                                                                                                      Liquor

           Nov     Dec   Jan    Feb   Mar   Apr      May        Jun         Jul       Aug       Sep        Oct      Nov       Dec
                                                                                                                                                                                      The delivery
           2019          2020                                                                                                                                                         experience

33                                                                                                                                         Inside Australian Online Shopping   2021
Fashion &                            When pandemic restrictions impacted

Apparel
                                     retailers' foot traffic and even forced                                                                                            Contents
                                     them to close stores, attention shifted
                                     to connecting with customers online.
                                                                                                                                                                        State of
The Fashion & Apparel category                                                                                                                                          eCommerce
                                     Cue Clothing's Shane Lenton shares how
came in second behind Variety
                                     their new online styling service is driving up
Stores in 2020 – capturing 25.9%     online conversion rates and order values.                                                                                          Online
of the eCommerce market.                                                                                                                                                shopping
                                                                                                                                                                        trends
If you add fashion purchases from
Variety Stores, the category rises
to 33.3% share.                                                                                                                                                         Variety
                                                                                                                                                                        Stores
                                                              Shane Lenton                             Our virtual stylist experience is
Category YOY growth
                                                              Chief Information Officer                the culmination of years of tech

45.5%
                                                              Cue                                      investment.                                                      Fashion
                                                                                                                                                                        & Apparel

                                     At Cue Clothing, we've worked hard over the past few          With so many people stuck at home, we quickly
                                     years to ensure customers can shop our entire range           saw the need to deliver a more personalised online                   Home
                                     from an online experience. We call this the ‘Endless          shopping experience. Even before the pandemic,                       & Garden
                                     Aisle’ because it removes out of stock frustrations for       we had been preparing to offer a virtual styling service,
                                     online or in-store shoppers by fulfilling a purchase from     so we accelerated its launch. There was great uptake
                                     any location, regardless of the order touchpoint.             immediately, with incredible social engagement around
                                                                                                   the initiative. Sessions immediately booked out weeks                Health
                                     As a result, when we had to close some of our stores                                                                               & Beauty
                                                                                                   in advance and we’re still seeing conversion rates
                                     during lockdown, we were quickly able to turn them
                                                                                                   consistently over 60%, with average transaction values
                                     into ‘dark stores’ for online order fulfilment. This helped
                                                                                                   over five times higher than normal.
                                     keep our retail staff working and our local manufacturers
                                                                                                                                                                        Hobbies &
                                     in business.                                                  Post-lockdown life has shown that customers continue                 Recreational
                                                                                                   to value these reliable and convenient connection                    Goods
                                     As one of Australia’s largest local fashion manufacturers,
                                                                                                   points. While there may be some calibrations, the more
                                     we were also able to adjust our styles quickly to meet
                                                                                                   personalised shopping experience – whether it be
                                     the needs of the time. Our customers may have been
                                                                                                   in-store or online – I think it's here to stay.                      Specialty
                                     working from home, but they still wanted to wear                                                                                   Food &
                                     something great while on a Zoom call!                                                                                              Liquor

                                                                                                                                                                        The delivery
                                                                                                                                                                        experience

34                                                                                                                           Inside Australian Online Shopping   2021
Fashion & Apparel 2020
eCommerce snapshot                                                               Fashion & Apparel 25.9%

                                                                                                                          33.6%
                                                                                                                                                              Contents
                                                                                 Variety Stores 7.7%

5.9 mil
                                                                                                                                                              State of
                                                                                                                          share of all                        eCommerce
                                                                                                                          online purchases
                                                                               Top 5 online                                                                   Online
                                                                                                                                                              shopping
                                                                               shopping locations                                                             trends
households purchased online from                                               by purchase volume
Fashion & Apparel retailers in 2020                                                                                                                           Variety
                                                                                Point Cook, VIC 3030       92.9%                                              Stores

                                                                                Cranbourne, VIC 3977       95.2%
                                                                                                                                                              Fashion
                                                                                                                                                              & Apparel
                                                                                Hoppers Crossing, VIC 3029 89.9%               YOY growth

State YOY growth                                                                Toowoomba, QLD 4350 51.0%
                                                                                                                                                              Home
                                                                                                                                                              & Garden
     Victoria                                    65.8%                          Craigieburn, VIC 3064       102.5%

     Tasmania                   42.3%                                                                                                                         Health
                                                                                                                                                              & Beauty
     Queensland            40.5%                                               Metro areas 46.1% YOY growth
                                                                                                                                                              Hobbies &
 Western Australia        39.3%                                                                                                                               Recreational
                                                                                                                                                              Goods
 South Australia         38.6%
                                                                               Regional areas 44.3% YOY growth                                                Specialty
 New South Wales         36.9%                                                                                                                                Food &
                                                                                                                                                              Liquor

 Australian Capital Territory       35.2%   National YOY growth

 Northern Territory     36.9%
                                            45.5%                                                                                                             The delivery
                                                                                                                                                              experience
                                            vs 57% YOY across all categories

35                                                                                                                 Inside Australian Online Shopping   2021
Fashion & Apparel 2020
eCommerce YOY growth                                                                                                                                                                                     Contents

YOY growth of                                        April          May                             August
online purchases                                                                                                                                                                                         State of
                                   Athleisure and Fashion           The week of Click Frenzy's      Highest growth in Women’s Fashion to date in 2020,
                                                                                                                                                                                                         eCommerce
                              Accessories grew 120% YOY.            May Mayhem (20 May) grew        up 45% YOY for the month. Victoria grew 168% YOY.
                         Unisex Fashion experienced a big           49.1% YOY. NSW accounted for    The Click Frenzy Sports and Afterpay Day (20-21 August)
                           jump, growing from 10% YOY in            36% of all Fashion & Apparel    sales caused a jump in the third week of the month,
                                March to 74% YOY in April.          purchases for the month.        with Athleisure growing 148% YOY for the week.                                                       Online
                                                                                                                                                                                                         shopping
                                                                                                                                                                                                         trends

                                                                                         July                                         November                                                           Variety
                                                                                                                                                                                                         Stores
                                                                                         The week of Click Frenzy's                   The week of Cyber Monday
                                                                                         Julove (22 July), grew                       (30 November), was the largest
                                                                                         73.7% YOY. Athleisure grew                   of the year and grew 42.8% YOY,
150%                                                                                     the fastest that week at                     followed by the week leading
                                                                                                                                                                                                         Fashion
                                                                                         122.5% YOY.                                  to Black Friday (29 November),
                                                                                                                                                                                                         & Apparel
                                                                                                                                      which grew 54% YOY.

                                                                                                                                                                                                         Home
                                                                                                                                                                                                         & Garden
100%

                                                                                                                                                                                                         Health
                                                                                                                                                                                                         & Beauty

50%                                                                                                                                                                                                      Hobbies &
                                                                                                                                                                     Athleisure                          Recreational
                                                                                                                                                                     Fashion Accessories                 Goods

                                                                                                                                                                     Footwear
                                                                                                                                                                     Unisex                              Specialty
                                                                                                                                                                     Women's Fashion                     Food &
                                                                                                                                                                                                         Liquor
0%

           Nov     Dec   Jan       Feb         Mar           Apr   May      Jun        Jul         Aug       Sep        Oct         Nov        Dec
                                                                                                                                                                                                         The delivery
           2019          2020                                                                                                                                                                            experience

36                                                                                                                                                            Inside Australian Online Shopping   2021
Home                                      Spending more time at home than usual,                    On top of strong organic growth in retail we have plans

& Garden
                                                                                                    to keep opening new store sites across the country.
                                          2020 saw Australians settle into routines that
                                                                                                    This will only bolster strong online growth as physical              Contents
                                          involved more home cooking and gardening.                 retail provides for greater brand exposure and helps
                                                                                                    build trust in our brand. Stores provide an avenue for
                                                                                                    easy returns of online purchases and strengthening
The Home & Garden category                Stephen Smith, GM Supply Chain and Store                  our offer through in-demand services, such as click and              State of
                                                                                                                                                                         eCommerce
took out third place for share            Operations at Kitchen Warehouse, explains                 collect, being an omnichannel retailer certainly
                                                                                                    gives us a competitive edge.
of online purchases, at 12.6%.            what Australia’s cooking renaissance meant
                                                                                                    We were in peak season mode from March onwards, as
                                          for the omnichannel retailer.                             Australians embraced cooking at home. To support this
                                                                                                                                                                         Online
A further 10.3% of all online purchases                                                                                                                                  shopping
                                                                                                    increase in demand we were able to pivot and utilise                 trends
were Home & Garden goods bought
                                                                                                    stores to fulfil online orders. This was an initiative we
through Variety Stores.                                                                             had earmarked for calendar year 2020 but were able to
                                                                                                    turn around what would have been a four-month project                Variety
                                                                                                    in the space of four weeks. There’s a lot of moving                  Stores
                                                                  Stephen Smith
Category YOY growth

69.6%
                                                                                                    pieces in there from the sorting of order allocation and
                                                                  GM Supply Chain and               WMS logic, to new workflow processes in-store, and
                                                                  Store Operations                  additional logistics services. Australia Post supported
                                                                                                    this effort by activating 14 additional collection points            Fashion
                                                                  Kitchen Warehouse                                                                                      & Apparel
                                                                                                    for our parcel service. This enabled us to ramp up our
                                                                                                    throughput and keep customers happy by avoiding
                                          At Kitchen Warehouse we want to be the one-stop           major despatch and shipment delays.
                                          shop for Australian’s cooking and entertaining needs.                                                                          Home
                                                                                                                                                                         & Garden
                                          This means delivering a world-class experience
                                          and offering the largest range of quality products.
                                                                                                        When COVID hit there was definitely
                                          I guess you could call us the Bunnings of kitchenware!        a fear of the unknown around how
                                          We are a family run business and the owners have a            we would be impacted but in reality,                             Health
                                                                                                                                                                         & Beauty
                                          heritage in the service and hospitality industry.             we saw a sharp uptick in sales.
                                          About 20 years ago they began with one retail store and
                                          grew from there. In 2016, the business merged with the
                                          established online company, Kitchenware Direct, run by    It’s been very successful. We’ve certainly seen some                 Hobbies &
                                          family member and now CEO Peter Macaulay – with the       reduction in freight costs but also some real wins in                Recreational
                                                                                                    terms of customer experience. There’s more work to be                Goods
                                          purpose of strengthening our offer to consumers as an
                                          omnichannel retailer and expanding nationally.            done here although we have seen that fulfilling orders
                                                                                                    from locations nearer to our customers reduces order
                                                                                                                                                                         Specialty
                                                                                                    turnarounds by several days. Customers are loyal to                  Food &
                                                                                                    brands that deliver the right experience. Being able to              Liquor
                                                                                                    innovate and form the right partnerships, I believe has
                                                                                                    not only allowed us to acquire new customers over this
                                                                                                    period but retain them into the future.                              The delivery
                                                                                                                                                                         experience

37                                                                                                                            Inside Australian Online Shopping   2021
Home & Garden 2020
eCommerce snapshot                                                                               Home & Garden retailers 12.6%

                                                                                                                                           22.9%
                                                                                                                                                                               Contents
                                                                                                 Variety Stores 10.3%

5.4 mil
                                                                                                                                                                               State of
                                                                                                                                           share of all                        eCommerce
                                                                                                                                           online purchases
                                                                                               Top 5 online                                                                    Online
                                                                                                                                                                               shopping
                                                                                               shopping locations                                                              trends
households purchased online                                                                    by purchase volume
from Home & Garden retailers in 2020                                                                                                                                           Variety
                                                                                                Point Cook, VIC 3030             143.8%                                        Stores

                                                                                                Cranbourne, VIC 3977              148.6%
                                                                                                                                                                               Fashion
                                                                                                                                                                               & Apparel
                                                                                                Hoppers Crossing, VIC 3029                   144.6%         YOY growth

State YOY growth                                                                                Toowoomba, VIC 4350 71.8%
                                                                                                                                                                               Home
                                                                                                                                                                               & Garden
     Victoria                                                                101.4%             Craigieburn, VIC 3064                     180.5%

     New South Wales                                63.8%                                                                                                                      Health
                                                                                                                                                                               & Beauty
     Australian Capital Territory                   63.1%                                      Metro areas 76.3% YOY growth
                                                                                                                                                                               Hobbies &
 Queensland                                    58.1%                                                                                                                           Recreational
                                                                                                                                                                               Goods
 Tasmania                                     57.2%
                                                                                               Regional areas 57.2% YOY growth                                                 Specialty
 South Australia                            54.2%                                                                                                                              Food &
                                                                                                                                                                               Liquor

 Western Australia                  46.1%                   National YOY growth

 Northern Territory 31.7%
                                                            69.6%                                                                                                              The delivery
                                                                                                                                                                               experience
                                                            vs 57% YOY across all categories

38                                                                                                                                  Inside Australian Online Shopping   2021
Home & Garden 2020
eCommerce YOY growth                                                                                                                                                                                Contents

YOY growth of                                        April           May                           August                         November
online purchases                                                                                                                                                                                    State of
                           Homewares & Appliances grew               Click Frenzy’s May Mayhem     During Victoria’s lockdown,    NSW and Queensland saw strong
                                                                                                                                                                                                    eCommerce
                           the fastest, at 139% YOY for the          (20 May) event drove 96.4%    Homeware & Appliances          growth of 70% YOY and 65% YOY
                           month. Consumer Electronics &             YOY growth for the month.     accounted for two in five      respectively. Pet Products recorded
                          Telecommunications hit its peak            Growth peaked at 145% YOY     purchases nationally and       its biggest growth of the year, up 90%
                            of the year, growing 108% YOY.           the week of Afterpay Day      recorded 137% YOY growth.      YOY. Online purchases from Home &                                 Online
                                                                     (20-21 May).                                                 Garden Stores grew 48.4% in the week                              shopping
                                                                                                                                  of Cyber Monday (30 November).                                    trends

150%
                                                                                                                                                                                                    Variety
                                                                                                                                                                                                    Stores

                                                                                                                                                                                                    Fashion
                                                                                                                                                                                                    & Apparel
100%

                                                                                                                                                                                                    Home
                                                                                                                                                                                                    & Garden

                                                                                                                                                                                                    Health
50%                                                                                                                                                                                                 & Beauty

                                                                                                                                                                Consumer Electronics
                                                                                                                                                                & Telecommunications                Hobbies &
                                                                                                                                                                                                    Recreational
                                                                                                                                                                Homewares &                         Goods
                                                                                                                                                                Appliances

                                                                                                                                                                Pet Products
0%                                                                                                                                                                                                  Specialty
                                                                                                                                                                Tools & Garden                      Food &
                                                                                                                                                                                                    Liquor

           Nov     Dec   Jan       Feb         Mar            Apr   May      Jun        Jul       Aug       Sep         Oct      Nov       Dec
                                                                                                                                                                                                    The delivery
           2019          2020                                                                                                                                                                       experience

39                                                                                                                                                       Inside Australian Online Shopping   2021
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