The challenges of 2020 have been rough with many companies already shutting their doors. Some are closing their stores to save the company name while others are barely surviving and expecting huge losses but not for the E-commerce industry.
Flashback 2019. A total of 20.2% National average YOY growth in E-commerce business was recorded in Australia based on Australia Post’s 2019 E-commerce Report (https://auspost.com.au/content/dam/auspost_corp/media/documents/inside-australian-online-shopping-ecommerce-report.pdf). That is an 8.5% increase from the previous year’s report. Thirty-five point two percent (35.2 %) of this number is an online purchase under the fashion category. The report also stated that the spikes of the sale came from November to December given the sale events like Black Friday, Cyber Monday, and Christmas sales.
Source: Australia Post
Fast forward to 2020. In early March, prior to lockdown, Australia’s total retail spending reached 15.5% YOY (Australia Post, 2020 https://auspost.com.au/content/dam/auspost_corp/media/documents/2020-ecommerce-industry-report.pdf ). That’s 4.7% below 2019’s YOY. When the whole world has to shut its doors due to the coronavirus pandemic, people are scared to buy in-store given the guidelines and restrictions. Thus, staying at home and working from home set-ups, as recommended, have resorted to an increase in online buying including food and other necessities. In April, this has resulted in an increase of 31% in online shopping purchases compared to last year. This new normal has changed the buying behavior of the consumer as well as the change in the types of products being offered by E-commerce companies. Some companies have even removed their bulk order option to meet the high demands for online buying.
Digging deeper into the details of the same report made by Australia Post, a comparison between 2020 and 2019 showed that 36% of the orders processed online were made using laptop computers followed by 27% from desktop computers. This highlights two options that can be seen through the computer’s browser compared to the browsing options using smartphones.
Source: Australia Post
What do Australians buy online?
Statista (https://www.statista.com/outlook/243/107/ecommerce/australia#market-revenue) showed a graph of the projections based on the data that they have. Fashion, food, and personal care are the top buys with an increase of approximately 2 million sales in 2020 compared to last year’s data. The projection as the new normal continues until 2024 suggests that E-commerce business will continue to grow as people feel safer to buy online than going to a bricks-and-mortar outlet.
How do Australians know the product brands that they are purchasing online?
This is the time when digital advertising comes in handy. E-commerce companies likely have used digital marketing strategies to reach customers especially these days when most orders are shipped directly to customers. Research made by We Are Social and Hootsuite (hyperlink https://wearesocial.com/au/blog/2020/07/everything-you-need-to-know-about-digital-use-around-the-world-in-july-2020) showed an in-depth data of how Australian customers discover brands, Ads overview of the top social media platforms like Snapchat, Twitter, Pinterest, Instagram, Twitter, LinkedIn. The research/report also includes Ads overview of other platforms such as YouTube, WeChat, and Reddit.
The "stay at home" campaign by the World Health Organization has helped social media platforms in getting more users. In July, Instagram reached a new milestone; 1 billion users. This could mean more ad reach for E-commerce campaigns. According to the report, that’s an additional 11% advertising reach.
On the other hand, LinkedIn also surpassed 700 million users. This could also be because of the need to create a professional profile as the demand for work from home is high such as social media managing jobs. This increase has made an additional 26 million in ad reach. Meanwhile, Tiktok has a total of 2 billion sign-ups. However, there is no current data as to the number of active users given that the U.S. and India announced the ban for the use of the said app (subject to an American purchase of the app). Moreover, the report did not provide data as to the reach-in Tiktok ads as well. Also, Facebook remained at the top with 1.69 billion users but ad clicks remained steady.
There are so many social media platforms that have E-commerce generated additional business through ad campaigns. Still, 98% of internet users use search engines in looking for a brand.
Here is a snapshot of the report made by We Are Social and Hootsuite.