Australian retailers are failing to meet their customers’ shipping expectations and are at risk of losing business to Alibaba and Amazon, according to a new report.
The study into mobile shopping from PayPal has exposed a significant gap between consumer demand and the shipping capability of local online businesses.
It found that while two-thirds of online shoppers (63 per cent) would definitely buy an item in their online shopping cart with next day delivery, the majority of Australian businesses have no plans or don’t intend to offer next day delivery (54 per cent).
Currently, only a third of Australian businesses offer next-day delivery (33 per cent), with 13 per cent planning to offer the service within the next five years.
PayPal Australia managing director Libby Roy said there is an opportunity for Australian businesses to close the gap.
“With almost half of mobile shoppers (47 per cent) saying they’d return to a merchant who offered next day delivery, there’s a real opportunity for Australian retailers who get their shipping speed and price right,” she said.
“Australian retailers are operating in a global market where free and fast shipping is now a consumer expectation. The online shopping experience doesn’t end at the checkout—product delivery is a core part of the end-to-end experience.”
Expect fast and free shipping
While 71 per cent of Australian smartphone users shop on their mobile devices, many are put off by lengthy shipping times. In fact, 42 per cent of survey respondents said slow shipping makes the convenience of online shopping redundant.
This is an issue for local retailers wanting to compete with international players, said Roy.
“With two online shopping giants, Alibaba and Amazon, poised to enter the Australian market, local consumers will have greater choice and online retail will be more competitive.
“To compete effectively, Australian businesses need to think beyond ‘units sold’ and understand their customers’ full engagement lifecycle including shipping, returns and other value-added benefits.”
Shipping is such an issue that 42 per cent of shoppers said they have abandoned a purchase because delivery took too long.
More than half of online shoppers (57 per cent) expect a free shipping option, and the same proportion would not shop twice with a business if shipping was too slow.
Shoppers ranked groceries and food and drink as the two most important categories for next day delivery. Tickets to music, movies and arts, and clothing and accessories tied for third, while shoppers were prepared to wait longer for sporting goods and toys and games.
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