The $15bn impact: Physical touchpoints drive Australian e-commerce revolution

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In a groundbreaking revelation, recent research from ShipStation and Retail Economics uncovers the pivotal role of physical interactions in shaping the Australian e-commerce landscape.

A staggering $15 billion, constituting 48 per cent of online non-food sales last year, can be attributed to seamless interactions between the online and offline realms. This compelling data highlights the critical importance of adopting omnichannel strategies for Australian retailers striving to stay at the forefront in an ever-evolving market.

The E-commerce Delivery Benchmark Report 2024 – a comprehensive study commissioned by Auctane, ShipStation’s parent company, in collaboration with Retail Economics – surveyed 8000 consumers and more than 800 online sellers across eight markets.

David Boyer, VP, head of ANZ at Auctane, underscored the transformative potential of this finding: “Today’s informed consumer seamlessly navigates physical touchpoints like brick-and-mortar stores, social media discovery channels, and even embraces innovative solutions like AI-powered assistants. This omnichannel journey is an opportunity for retailers to forge personalised connections that build enduring brand loyalty.”

Social media overtakes retail websites for Gen Z and millennials

Reflecting a shift in consumer behaviour, platforms like TikTok and Instagram have eclipsed traditional retail websites as the preferred sources for product discovery among Gen Z and millennials. Nearly 40 per cent of digital natives under 45 rely on social media for inspiration and product research, underscoring the need for Australian retailers to adapt their strategies to reach these audiences on their preferred platforms.

AI: Revolutionising the shopping experience

The rise of artificial intelligence (AI) promises to revolutionise the shopping experience, with 31 per cent of surveyed Australians recognising its value in streamlining order and delivery updates. Clear communication and responsible implementation are crucial for retailers looking to build trust and effectively integrate AI into the shopping experience.

Cost-conscious consumers and returns as a loyalty catalyst

While physical interactions, social media, and seamless logistics drive online sales, cost sensitivity remains paramount for surveyed Australian consumers, especially around delivery. A significant 48 per cent say the cost of delivery is the most important factor when shopping online.

Returns – once viewed as a friction point – now emerge as a loyalty catalyst. Consumers express a significant desire for out-of-home returns, with 65 per cent believing they should be free. Retailers can transform returns into a powerful customer retention tool by embracing diverse, in-person return options, addressing rising returns, and prioritising transparent policies.

Navigating retail challenges in 2024

Surveyed merchants express concerns about rising overhead costs, weak customer demand, and intense competition heading into this year. Richard Lim, CEO of Retail Economics, emphasises the shift towards a unified, omnichannel strategy: “Retailers must prioritise seamless, consistent customer experiences, embracing a unified, omnichannel approach to unlock the potential for lasting customer loyalty and reinforce brand relevance.”

In a retail landscape marked by dynamic shifts and challenges, the $15 billion impact underscores the need for Australian retailers to adapt, innovate, and deliver frictionless experiences across all channels to stay ahead in the competitive Australian market.