Embrace online: after Borders fall consumers issue a wake-up call for Australian retailing
Australian retail failures such as the recent collapse of Borders Australia and Angus & Robertson will continue to occur unless retailers embrace online shopping, according to a new study into Australian shopping behaviour.
The research, conducted by market research firm Colmar Brunton, found that Australian consumers are frustrated with the limited online shopping options from national retailers, forcing more than half to choose to spend their money offshore with global competitors.
Further, 2 in 5 believe Australia is behind the rest of the world when it comes to online retailing. This is coupled with the exponential rise of online shopping, with 40 percent of Australians now conducting a significant amount of their shopping in the digital world.
“Many Australian retailers stayed away from online following the dotcom crash, while global competitors spotted opportunities. We’re now playing catch-up,” says Dr Steve Nuttall, managing director of Colmar Brunton Sydney.
“This is no longer about competing just on our turf. Global retailers are penetrating our borders without building a single store here. Australian retailers have had a view that the name of the game is bricks and mortar but while they have been focusing on this, other e-tailers are focusing on building trust with consumers .It’s not just about being price-competitive. Choice and convenience are huge drivers for consumers”
The research also found that while consumers now expect all retailers to offer online shopping offers, there is a growing disparity between what retailers are delivering. More than a quarter of consumers believed that they could buy online from Harvey Norman and Target, when actually they could not have done at the time.
“This just highlights how out of touch Australian retailers are with consumers who expect our leading brands to have a fully fledged e-tailing offer. But all too often, the value proposition isn’t there.” says Nuttall.
Convenience is the driving factor pushing people out of shopping centres and into online retail stores.
• 85 percent of consumers say they shop online purely because of convenience. Another 49 percent cited it also allowed them to avoid parking, traffic and shopping queues which come with Christmas shopping experience.
• 66 percent of consumers think you usually get a better deal online • and 54 percent believe there is greater choice online compared to in-store
However the biggest barriers stopping people from spending more of their money online continue to be focused around security and post-sale customer service.
• 86 percent saying they will only shop from trusted websites • 57 percent concerned about product quality • 55 percent saying it is hard to get a refund.
The trust factor only serves to underline the huge online potential for flagship Australian brands.
For more information or a copy of the report “Clicks not bricks: the opportunity for e-tailing in Australia” contact Caroline Flammia: caroline.flammia@cbr.com.au or +61 2 8873 0888).
11 Comments
It might be a more useful step here in WA to encourage our retailers to first embrace proper advertising
…because it would be useful to tackle advertising before fixing a broken distribution method….how about no one advertise at all until they have got their sh#t together??? (maybe 5.10am is a little early for thinking properly)
Hi 5:10am. Sorry, as I read it this article is about online retailing not advertising. There is quite enough advertising already(in all media). There is however, not enough online retailing available. Nice to see you are up bright and early though 🙂
I was not up early. I was up late. That is how I roll.
My point stands. What chance do West Australian retailers have to compete in an online retailing environment if they can’t even be persuaded to embrace proper advertising in a traditional retail environment? First create strong brands that people trust, then put them online. We are way off the pace in all respects.
5.10am you must be made of tiger blood, up that late.
Creating a “strong brand” don’t count for much if the business/distribution model is broke.
Look at eBay/Amazon/Gumtree… they had no brand equity, but a great business/distribution model, now the punters go to them for price and range. And what about these Group Buying sites like Spreets- perfect for retailers…
5:10 – are you Charlie Sheen? honestly, ‘that is how I roll’ get a life.
9:38 is right on the money; get a business model that works and then go online. By the way, can you name an actual WA brand that isn’t doing e commerce that could? I’m not sure Brownes Milk will travel well in the post.
I love egotistical ad types like 5.10; those who think every business will either succeed or die as a result of advertising.
Advertising is only one part of a company’s marketing mix. Even then, marketing is one of many strategies and opportunities that a company must consider on any given day.
In the meantime 5.10, I’m sure Borders would love to hear from you to find out how your snappy jingle could’ve saved them from collapse!
WA company which is now Australia wide, Bedshed, don’t do e-commerce. I believe its constantly on the agenda but their biggest barrier is the arguement about which store ‘gets the sale’. Missing a massive opportunity.
Fact is bookshops can’t compete with online for price, ebooks are the last nail in the coffin for these guys. Someone stopped me in the city the other day looking for a CD shop ( 78s and Dada slipped my mind I hadn’t been there in so long) but the typical CD outlets are few in number. Magazine stands the next to go as the shift continues?…probably.
12:17 I suggest one of the reasons Bedshed don’t do e’commerce is that more than almost every other purchase the customer actually wants sit on the bed they might want to buy. There’s also the issue of up selling which is hard in cyber space, Try going in to Bed Shed and asking to see their advertised cheap mattress, within 30 seconds you’ll have been steered to a much better one and within 5 minutes you’ll be buying the top of the range, save your back, 40% off, 2 years interest free credit one!
It’s very different buying CDs or books online than furniture.
Hey 5:10 can you write a jingle to overcome that?
Only way you’d buy a bed, sofa, rocking chair online would be after identifying the make/model from a showroom and escaping without signing anything. Conceivably white goods a different matter, no end of reviews for any retail product now online means informed decision.