How did eCommerce do last quarter?

A steady climb: Growth in online purchases

Our latest Inside Australian Online Shopping Quarterly Update (Apr-June 2024) reveals impressive resilience and growth within Australia’s eCommerce sector, despite overall retail slowing down due to cost-of-living pressures mounting. 

Online purchases saw a modest but steady rise in the quarter, growing 1.1% compared to last year and 2.1% compared to the previous quarter. This consistent increase in parcel volume growth highlights the strength of the parcel delivery industry in Australia and suggests that consumers are increasingly turning to online platforms for their shopping needs.

Read on for the latest eCommerce insights to help grow your business ahead of the upcoming peak season.

Popular categories: Where shoppers are spending

Understanding which categories are driving growth is essential for SMBs looking to align their product offerings with consumer demand. 

Fashion & Apparel leads the pack with a substantial +19.1% YoY growth. This surge is a testament to the sector’s ability to attract consumers through dynamic online retail strategies and responsive parcel shipment volumes based on customer’s needs. We’re also seeing overseas players like Shein driving a shift towards cheaper alternatives to trending fashion, resulting in higher purchase volumes but smaller basket sizes. 

Following closely, the Health & Beauty sector saw a +6.0% YoY growth, reflecting the increasing consumer focus on wellness and self-care products, particularly nutrition and health supplement items. The Hobbies & Recreation Goods category also showed positive momentum, growing by +1.3% YoY.

Regional performance: A mixed bag

The performance across different states varied significantly, offering unique insights into regional trends:

• ACT: Experienced a slight decline of -1.2% YoY.
• Queensland (QLD): Showed strong performance with a +5.0% YoY growth.
• Victoria (VIC): Faced a small decline of -1.0% YoY.
• Western Australia (WA): Grew modestly by +0.4% YoY.
• New South Wales (NSW): Had a marginal decline of -0.3% YoY.
• Northern Territory (NT): Saw a notable increase of +6.7% YoY.
• South Australia (SA): Grew by +2.3% YoY.

So, what does this mean for SMBs looking to leverage the varying parcel growth rates across states? Consider targeted marketing campaigns, optimised inventory management and logistics planning. For example, focusing efforts on high-growth regions like Queensland could help meet increased demand and expand customer reach.

EOFY sales: A boost for retailers

The End of Financial Year (EOFY) sales period is a significant event for both consumers and businesses. This year, EOFY sales grew by 4.4% compared to last year, reflecting a successful sales period that contributed to higher parcel shipment volumes. 

For SMBs, leveraging such seasonal events with strategic promotions and discounts can drive significant revenue growth. Create bundled product offers or package deals to incentivise customers to purchase multiple items or higher-value products, thereby increasing the average order value. Or reward repeat customers with exclusive discounts or early access to EOFY sales to strengthen customer loyalty and encourage repeat purchases.

The growing online shopper base

On average, 5.7 million households shopped online each month in the last quarter, marking a 3.8% increase from the previous year. This household growth underscores the shift towards consumers shopping online, which fuels the demand for efficient and reliable parcel market services.

By implementing a range of delivery options, including next-day and express services, SMBs can ensure they can handle increased order volumes during peak periods and maintain high levels of customer satisfaction. Australia Post’s new Metro service delivers to 2,500+ postcodes and boasts a 97.8% delivery-on-time rate, which is a great option for customers wanting next-day deliveries.  

Planning for the peak retail season

As we approach the peak retail season, these insights offer valuable guidance for SMBs. Here are a few strategies to consider:

1. Optimise your online presence: Ensure your website is user-friendly, mobile-optimised and equipped with seamless payment options.
2. Utilise technology for forecasting: Use AI tools and data analytics for accurate forecasting, especially in high-interest sectors like Fashion, Specialty Food, and Health & Beauty. 
3. Partner with reliable logistics providers: Customers are seeking choice, convenience, and flexibility. Therefore, partnering with a reliable delivery service is essential. Australia Post’s 24/7 Parcel Lockers exemplify this, offering customers the ability to pick up their parcels from over 700 convenient locations nationwide.
4. Offer easy returns: Offer easy and hassle-free return options to boost customer confidence and encourage repeat purchases. Australia Post offers a range of business and customer-friendly returns options—from printer-less returns to our online Returns Portal.  
5. Regional marketing strategies: Tailor your marketing campaigns to target regions showing strong growth, such as Queensland and Tasmania.

For small and medium-sized businesses, these insights are invaluable for strategic planning. Learning what services Australia Post offers, plus leveraging these eCommerce trends, can significantly enhance your retail strategy. Whether you’re focusing on Fashion & Apparel, Health & Beauty or other popular categories, aligning your operations with these trends will be crucial.

* Data derived from Inside Australian Online Shopping Quarterly Update | Apr-Jun 2024 (Q4).