The retail e-commerce industry underwent a metamorphosis during the COVID-19 pandemic and subsequent lockdowns. In 2023, four years on, it seems not much has changed. The economic climate has only further cemented the changes that were already underway during the pandemic.
A study conducted by Shopify called The Australian Retail Report 2023, took a deep dive into the growth of e-commerce and the shift in consumer behaviour. More than 200 medium to large businesses took part in the survey, including over a thousand consumers.
Australians want value for online shopping products
The study found that Australians are concerned about the current unstable economic climate. Close to a third (32%) of all consumers surveyed, prioritised value for money over many other decision-making factors. They are constantly hunting for the best value for their money. Australian consumers are conscious of their budgets and what they spend it on.
With retailers not able to rely strictly on brand loyalty, it’s necessary for businesses to change their strategy. This Shopify report also explores how Australian retailers can balance these competing demands successfully for sustainable growth. “As retailers such as Tigerlily, Strandbags, and July, among others, demonstrate, growth can be just a short market expansion or product innovation away. Navigating the way forward may at first glance seem challenging, but many leading retailers are forging ahead. Their example demonstrates that anyone can make progress with the right tools, tactics, and strategies in place.”
Australians are still spending money online despite tight budgets
Shopify found that 75% of those surveyed opted to cut back on spending to save money. However more than half (52%) are still treating themselves by spending money on discretionary items.
More than a third of the respondents have indicated that they have not changed their spending habits since last year, while 20% in fact said they spend more than compared to 2022.
Ironically, Australians are spending more time at home than even before the pandemic. This is good news for e-commerce with online spending still booming, despite a healthy return to in-store shopping since the end of the pandemic.
The Australian budget shopper vs loyal consumer
For businesses to be ahead of the curve and make sure they adapt their strategies to these changes, it’s good to know what these value shoppers are after.
Shopify found that most of these consumers who are after value for money instead of being brand loyal, are 43-58 years old. They are most likely to be Gen X consumers. Most of them received tertiary education. They also want to find the best value for money.
The loyal consumer cohort makes up 24% of those surveyed. They are most likely older than 50-years. They prioritise high quality over price, if the product isn’t significantly expensive. They also tend to spend more time at home than before the pandemic.
Trading in a dicey market
Rising inflation has caused an uphill battle for retailers. The report found that almost all senior retail leaders surveyed, showed organisations have been impacted by macroeconomic pressures.The biggest macroeconomic pressure faced by their business was attributed to higher wages, followed by operational costs.
Businesses are passing on the increased cost of doing business to consumers, while a third of the respondents in this survey are trying to find ways to absorb a portion of the rising costs. Subsequently, most medium to large retailers are currently investing or planning to invest in Artificial Intelligence (AI) and automation, to increase efficiency and reduce costs.
About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand. Do you have a story you would like her to expose, report on, or consider? Please send your request to Newsdesk@locate2u.com.