In a comprehensive examination of Australia's e-commerce landscape, global advisory firm Circana has released an industry Insights report identifing three primary focus areas for retailers.
The report, "Unlocking The Next Wave Of E-Commerce Growth", underlines three major focus areas for the retail segment, which are:
- enhancing e-commerce capabilities;
- viewing e-commerce as more than just online sales; and
- executing across omni-channel touchpoints.
Alistair Leathwood, Circana's Head of Product and Solutions for the Asia-Pacific region, described the report as "one of the most significant and in-depth reviews of e-commerce in Australia".
Pandemic's impact on e-commerce
Addressing the pandemic's influence on digital shopping, Leathwood disclosed that Australian online retail sales grew by a staggering 7.3 times during the pandemic, outpacing in-store sales.
He said: "The number of shoppers using online retail more frequently increased from 27% in 2020 to 41% in 2021 and 2022.
"Now that life is returning to normal, the number has reduced by 14% back down to 27%."
Online challenges and preferences
Leathwood highlighted several challenges in enticing shoppers back online, particularly in the Fast-Moving Consumer Goods (FMCG) sector.
He explained, "Omni-channel and omni-category leadership is key.
"Here is a need to invest in capabilities that enable a better online customer experience."
Growth prospects for online retail
The Circana report suggests the online retail market is poised for a rebound in 2024.
Leathwood affirmed, "Going forward online retail will continue to grow share amid a digitisation of society.
"The most recent quarter indicates a reversion to growth, although below pre-pandemic run-rates."
Key customer segments
According to Circana's research, households with higher incomes and those with kids and pets are driving online sales.
Leathwood advised: "Retailers and manufacturers will quickly need to identify untapped and emerging customer segments and gain a rapid understanding of their needs and preferences."
Leathwood also touched upon the future of order fulfilment. "Order fulfillment will become a key battleground for the sector as more shoppers develop the confidence to use different ways to receive online orders," he said.
Winning in e-commerce
Concluding the discussion, Leathwood urged businesses to invest in basic omni capabilities.
He emphasised, "Simply displaying a product in a visually pleasing way can make a major impact towards winning in e-commerce."
The Circana report serves as a comprehensive guide for retailers looking to navigate the fast-evolving e-commerce landscape in Australia. It provides valuable insights into consumer behaviour, market trends, and strategies for growth, giving the retail sector a robust framework for decision-making.