Andrew Begg On eCommerce

Sitting on the tarmac at Sydney Airport on a return flight to Melbourne earlier this week, I came across an article in the Qantas magazine that discussed the evolution and impact of eCommerce. According to its author, Brad Howarth, Australians are flocking en-masse to e-commerce to avail of the benefits of convenience and amplified choice. With a number of retail clients in our client list, I sat up and took notice.

In fact, this article wasn’t the first I’d read about eCommerce that week. Only the day before, The NAB Online Retail Sales Index reported that in the year to March 2014, Australians spent $15.2 billion on online retail. Meanwhile, earlier this year the ABC reported that the annual World Internet Project found the number of online purchases made by Australians grew by more than 46 per cent between 2011 and 2013. Whilst online retail is nothing new (in fact it’s 20 years old!), its recent exponential growth is the factor catching the attention of economists and marketers.

So what’s causing this growth? According to Howarth, the growth in online sales is due to the reduction of barriers that had previously hindered both retailers and consumers online transactions. For the retailer, eCommerce sites are increasingly cheaper and easier to use and maintain. For consumers, payment systems and delivery option are improving to increase convenience and reduce costs. In fact, many retailers are absorbing the cost of delivery altogether.

Regardless of who pays, such is the increase in eCommerce that parcel delivery companies are thriving. Good news for Australia Post, which, having feared becoming obsolete due to the rise of email, has experienced double digit growth in the percentage of parcel deliveries. It seems parcel delivery is becoming so prevalent that Australia Post is no longer a letters business but an e-commerce-driven parcels business.

What does this mean for retailers? According to Howarth, it’s good news. In the past, online retailers, such as Amazon, threatened to put the local ‘mum and dad’ stores out of business, but as eCommerce becomes more accessible, it appears many of our local and national retailers are jumping on the bandwagon and taking advantage. Whilst spending on digital is scary for some, the truth is our retailers are risking more by avoiding doing so.

At Traffic, we’re finding more and more of our retail clients are investing in our digital capabilities, innovating through technology and having successful outcomes. And we’re finding they’ll win if they have a strong and consistent brand, which offers a seamlessly integrated customer experience both offline and online. With the latest in responsive design, supported by clever digital advertising, we can bring customers to your store both online and on foot. And whether they’re on their I-phone or in your shop, we can help you better understand their needs to provide the same level of tailored service increasing loyalty and on-going sales.

To conclude, eCommerce is growing, but it’s only a threat to traditional retailers if they fail to embrace technology and get caught behind the evolving trends of consumer behaviour. If harnessed effectively, retailers have a real and achievable potential to take advantage of new and improved touch points to remain relevant to today’s consumer and increase sales and profits.