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The Rise of e-Commerce in Australia

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The retail industry is facing a major shake up worldwide. One after another, news of long-established department store brands going into the red are heard. Robinsons department store in Singapore, JCPenney in the USA and David Jones in Australia are some of the latest added to the tally of department stores closing down stores, or closing down for good. It seems that there is an upward trend in retail woes. Undoubtedly, the rise of e-commerce has directly and majorly impacted retail stores' prospects.

The perks of e-commerce for consumers

According to JPMorgan, Australia's e-commerce market has grown at a double-digit rate over the last few years, culminating in a market worth of $33.1 billion. Consumers now prefer to shop online for the convenience, larger variety and lower prices offered. Along with the rise in popularity of online shopping is the rise in number of online-only fashion labels like Hello Curve and Popcherry. Offering prices that are significantly lower than retail stores, consumers are enticed to try out online fashion stores. In contrast to retail stores, online stores don't have expensive overhead like rental and labour costs to manage, so they are able to offer better deals to customers. Due to the same reasons, online stores are better able to offer a larger product variety with more funds on hand. To combat the lack of fitting room trying sessions, most online stores offer free or convenient return of items that don't fit well. An added perk of shopping online is that customers get to try clothes in the comfort of their homes.

The growth of logistic companies equals affordable shipping

Along with the growth of e-commerce, is the growth of logistic companies. Modor Intelligence mentions that the growth in ecommerce in Australia is the "major factor that drive the freight and logistics market due to increasing volume of international cross-border trade." With increased volume, logistic firms are able to operate at scale, offering lower shipping rates to customers. It is now commonplace to see free shipping or a low minimum purchase value required before free shipping is offered on e-commerce stores in Australia. These low or free shipping rates lower the barriers for Australians in trying online shopping out. In fact, a case study by Red Door revealed that offering free shipping increased orders for by 90% for a company called Nuface.

The social media savvy wins

Famous Australian e-commerce fashion brand, Showpo, posted a revenue of US$30 million in 2017. It has since grown so big that it ironically has a retail store now. It also have 1.8 million followers on Instagram, a far cry from the 384 thousand followers that department store David Jones has. Case in point, online fashion stores are more often than not, better at the social media game than the late-to-the-game offline competitors who are used to brick and mortar operations. Being purely online stores, online fashion labels are conscious and serious about their online marketing efforts through social media and otherwise. Quoting Wearesocial, Australians spend 1 hour and 44 minutes a day on social media, a generous amount of time for social media savvy online fashion labels to flash their products to smart phone and computer users. In contrast, retail stores lose out as they are usually focused on retail operations and also aren't as well-informed on how to capture the attention of social media users as their counterparts.

Australians are spending more time online

Australians are spending way more time online than they ever did. Quoting Wearesocial, Australians spend 5 hours and 41 minutes of each day on the internet. That is a whopping amount of time online fashion labels make use of to promote their brand. E-commerce stores use various online methods like e-mail newsletters, online advertising, social media, online news and other online outlets to capture potential customers' attentions. Offline stores more often than not own little or no presence online, losing a valuable chance to engage and retain customers.

Shopping online is now commonplace for Australians

Gone are the days where smart phones and computers require familiarizing with. Most people, including those who are older in age are well-versed on going online. People now make purchases online for anything from concert tickets to groceries, and the worry of shopping online has decreased as evidenced by the growth in the e-commerce industry. In fact, Australia's staple grocery store, Woolworths, has doubled its capacity for online grocery deliveries with its expectation of a permanent increase in the number on online shoppers. Consumers are tempted by the cheaper prices online and with a first positive experience, willing to purchase other items online. If retailers want to get consumers' attention, it's time for them go beyond billboards and adopt and embrace digital platforms.

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In conclusion

E-commerce fashion labels are here to stay. If retail stores want any chance of surviving, it is imperative that they engage with consumers online too. It is an understatement to say that technology has changed the way that we live; it has now changed the way we shop too.

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