Physical interactions throughout the customer journey contribute significantly to Australian ecommerce sales, according to new research from ShipStation and Retail Economics, with $15 billion or nearly half (48%) of Australian online non-food sales in 2023 interacting with physical touchpoints.
The Ecommerce Delivery Benchmark Report 2024 commissioned by ShipStation’s parent company, Auctane, in partnership with Retail Economics, surveyed 8,000 consumers and 800+ online sellers across eight markets.
Auctane vice president and head of Australia and New Zealand, David Boyer believes the $15 billion figure paints a compelling picture of consumer behaviour, presenting a significant opportunity for brands to evolve their approach.
“Gone are the days of rigid classifications like ‘online’ or ‘offline’ shopping. Today’s informed consumer seamlessly navigates physical touchpoints like bricks-and-mortar stores, social media discovery channels, and even embraces innovative solutions like AI-powered assistants to streamline tedious tasks like delivery and product research,” he said.
“This omnichannel journey is not merely a matter of convenience, but rather an opportunity to forge personalised connections that build enduring brand loyalty.”
While in-store browsing and returns play a critical role in the omnichannel experience, the research also shows the rising influence of social media and AI.
For Gen Z and Millennials, TikTok and Instagram reign supreme for product discovery. Across surveyed markets, nearly 40% of digital natives (those aged under 45) rely on social media for inspiration and product research, compared to just 35% who use retail websites.
While some Australian consumers remain cautious about AI, close to one-third (31%) surveyed see it as valuable for streamlining order and delivery updates, and 28% believe it can simplify product research. For retailers, clear communication and responsible implementation are crucial for building trust and ensuring AI is used effectively.
The survey also found that cost sensitivity remains paramount for surveyed Australian consumers, especially around delivery. Almost half (48%) state the cost of delivery as the most important factor when shopping online and 71% are less likely to shop with a brand due to high delivery costs, while more than two in five (44%) are unwilling to pay for premium deliveries.
Consumers also expressed a strong desire for out-of-home returns. Almost one-third (31%) of surveyed Australian consumers report a preference for in-store returns and 21% favour PUDO (pick-up/drop-off) locations. When it comes to frequency of returns, across markets Gen Z leads the pack, returning one in five (19%) apparel purchases on average.
In addition, 65% of surveyed Australian consumers believe returns should be free and not have any associated costs. Notably, across surveyed markets, half of Gen Zs are willing to pay for a quick and hassle-free return, making them three times more likely than Boomers (aged 65+) to do so. Four in 10 (40%) surveyed Australian consumers report an inconvenient returns policy as a factor that would make them less likely to shop with a brand in the future.
Commenting on the report findings, Retail Economics CEO, Richard Lim said, “The retail landscape has demonstrably shifted towards a unified, omnichannel strategy in 2024. The $15 billion figure spent online that is heavily influenced by physical touchpoints underscores the dynamic and multi-faceted nature of the modern customer journey.
“Convenience and value are paramount across all channels, from product discovery to delivery and returns, leaving no room for friction in the experience. Retailers must understand this evolution and prioritise seamless, consistent customer experiences – regardless of whether customers choose online, in-store, or a hybrid approach.
“Single-channel strategies struggle to maintain relevance in this fluid environment. Embracing a unified, omnichannel approach unlocks the potential for lasting customer loyalty and reinforces brand relevance in the competitive landscape.”