After undergoing extensive change in 2020, Australia’s ecommerce and logistics industries have essentially been catapulted a decade into the future in terms of customer demand. With customers and storefronts at the mercy of rolling lockdowns, shoppers turned to online channels, which, in turn, put pressure on an overburdened delivery network struggling to keep up with the demand for home delivery.
Now, as Australia reforges its retail industry, applying the lessons and advancements of the last 12 months, distinct trends are forming that will shape the future of retail in the 21st century.
Ecommerce sustains its new, higher share of retail
While many shoppers have welcomed the return to in-person bricks and mortar shopping, hesitation will remain for many, who may not be totally comfortable and relaxed in a busy indoor space for some time. Retail is having to adapt already to this fact, meeting demand whether it’s online or offline. This, combined with the now ingrained nature of online shopping learned during the pandemic, means ecommerce will continue to hold a pivotal place in the industry.
PUDO reaches the mainstream
Sustained ecommerce unfortunately maintains the pressure on ecommerce fulfilment, which has had to deal with a 44 percent increase in purchase volume in January 2021 compared with January ‘20, according to Australia Post. The influx of parcels is leading shoppers to explore more convenient ways to get their online shopping – especially with working environments adopting a hybrid office and home-working model.
New research from Doddle revealing two thirds of Australian consumers are interested in trying new delivery options, suggesting that there’s plenty of room for growth in new delivery formats. In fact, this research highlights the appetite for a pick-up drop-off (PUDO) future in Australia, with 66 percent of Australians seeing the potential of a Scandinavian-style PUDO model to improve delivery in Australia. Convenience tops the list of motivations for these alternative options, closely followed by the availability of free delivery, and speed.
FMCG retailers harness their stores to offer alternative delivery methods
Despite online purchases up 34.9 percent year-on-year, groceries and other fast moving consumer goods (FMCG) are still overwhelmingly purchased in stores. This serves as a potent reminder of the essential nature of physical retail, particularly supermarkets and convenience stores. Many consumers will also want to avoid lingering in enclosed public spaces for too long, so the more they can get done in one trip, the better. With growing ecommerce and a desire to still visit the grocery store or supermarket, many of these stores will be looking to offer more services like Australia Post’s Collect & Return to ensure demand for alternative delivery options is met.
Increased focus on returns
Returns are an increasingly important factor in the consumer decision-making process, with 72 percent of shoppers checking an online retailer’s returns policy before making a purchase. As a result, delivery and returns options will be more consistently used throughout the customer journey, in ad-copy, homepage banners, product pages and at the checkout.
This is relatively standard in other markets like the UK, where retailers will frequently use valuable characters in Google Ad titles to indicate they offer free returns, and use screen real estate on their homepages for above-the-fold banners emphasising the length of their returns policy. The consistency is important – if shoppers don’t even need to break from their purchase journey to know the retailer has them covered when it comes to returns, they’re more likely to convert.
Amazon moves into last-mile fulfillment
Following patterns of the US and UK markets with Amazon Shipping, Amazon is expected to make serious moves into last-mile fulfilment in Australia, delivering more of its own parcels and offering its delivery service to other retailers. To remain competitive, networks in other markets are beginning to open up or collaborate, such as the UK Post Office announcing in December 2020 it no longer exclusively works with Royal Mail, opening up a network of 11,500 post offices to other carriers in the market. In 2021, we will see a trend towards models where carrier-agnostic PUDO networks are vitally important to the overall delivery ecosystem.
Australia’s ecommerce and logistics industries have undergone incredible growth and serious challenges in the past 12 months. Where 2020 was all about managing the growth and staying afloat, 2021 will open the door for strategic change to respond to the new reality of ecommerce and allow carriers and retailers to work more closely together to become more efficient.
Justin Dery is CEO for Asia Pacific at Doddle