Australian consumer online retail spending has stabilised, according to the Australian Ecommerce Report 2023 released by IAB Australia and Pureprofile.

The report found that two-thirds (67%) of consumers rate convenience as the number one reason for purchasing online, however with recent rises in cost-of-living, consumers are increasingly focusing on discounts, loyalty programs and seeking price comparisons to minimise unexpected price increases when they shop online.  

According to the report, retailers must look to win over shoppers by ramping up value propositions and providing relevant shopping experiences suited to the current economic climate.

IAB Australia CEO, Gai Le Roy commented, “Australian consumers are increasingly enjoying a mix of online and in-store shopping, but its clear retailers face a new set of challenges with shoppers who are price sensitive seeking value for money in their brand choice. We know that constant discounting and undercutting competitors is not a long-term strategy, but retailers will need to consider how to offer a clearly articulated value exchange for consumers.”

Pureprofile CEO, Martin Filz added, “Pandemic behaviour shifts have become sustained habits for consumers with personalisation and relevance now the expectation, along with increased convenience and faster delivery. However, it’s good news for retailers with online retail holding stable as consumers maintain the same frequency of purchase as a year ago, even if they are more cautious.”

According to the report, loyalty programs are providing increasingly important with 62% of online shoppers increasing their usage as they look to enhance their shopping experience while saving money. Nine in 10 online shoppers remain signed up to at least one shopper rewards program with 44% of those signed up to a rewards programs have four or more cards. Half (52%) of online shoppers pay a fee to subscribe to a retail loyalty program such as Amazon Prime, eBay Plus, Wesfarmers OnePass, Woolworths Delivery Unlimited or Costco Membership.

While these loyalty programs provide retailers with rich behavioural data, trust, transparency, and a clearly articulated value exchange with benefits to consumers is key to underpinning successful retail marketing. Concern with how retailers use shopper data increased over the last year with 60% reporting some level of concern about how data collected via loyalty cards (up from 51% in 2022) and 60% concerned about data collected via transactions (up from 55% in 2022).