Australia Post Could Spark A Boom For Online Retail

This year, online shopping in Australia is tipped to hit $13.6billion dollars according toFrost & Sullivan; an increase of more than 13% year on year and it’s a trend that is expected to steadily continue for at least the next few years.  Whilst the figures might seem strong, consider that in 2010 online shopping only accounted for around 3% of the total retail spending in Australia. Despite only steady growth forecasts, my prediction is that we need to get ready for a boom moment.

Australia Post clearly understands this growth and announced a trial of a 24/7 pickup service to “meet the online shopping boom” earlier this month.  Australia Post believes this to be the biggest change to its parcel service in its 200 year history. Until now, you needed to be home to receive your delivery. If you miss the postman, you’re required to front up at the local Australia Post outlet between 9-5 within the next couple of days or your parcel disappears into a regulatory  black hole.

I write from experience when I say this is extremely frustrating and ultimately a major deterrent to ordering online.  Presumably there are now thousands of parcels across the world marked “return to sender”.  Foreign suppliers are confused; so is the customer and little has been done until now.

Assuming that Australia Post takes on this concept permanently (and commitment to infrastructure development alone indicates that it will) we all need to get ready for online retailing in this country to boom.   Consider that this service breaks down a very significant hurdle for online shopping in one fell swoop and that a shift of only 1% – 2 % of shoppers from bricks to clicks, will have a massive impact on the retail landscape.  The idea of 1% – 2% shift seems ultra conservative given that some companies, such as Zappos.com, see as much as 30% of all retail going online in the future.

Whilst I don’t have a crystal ball, the forecasts of a modest 10-15% growth in online shopping over the next year seems very conservative. Changes in technology (i.e. speed and availability) and the ever-increasing catalogue of products online, combined with these changes to Australia Post’s delivery service and you have a recipe for a substantial change in consumer behaviour.

So if your retail business isn’t online, or even if it is, it’s time to ask yourself; “is my business ready for this shift?”  If the answer is no, then now is the time to speak to people who can help, before its too late…

DC Strategy is your business growth specialist. For more information please contact:

Tim McDougall
Online Strategy Manager
tim.mcdougall@dcstrategy.com
03 8615 7205