Online retail 'not just about price' and marketers should focus on big spenders

By Rosie Baker | 24 September 2013

There are some indications that shoppers are not just interested in cheap deals online and marketers should be targeting those with most to spend.

That's according to two reports.

The Changing Face of Retail report by Magna Global, shows that the public is losing its appetite for group buying sites such as Groupon and price comparison sites as the online shopping market matures beyond pure price plays. Their popularity fell by 9%, according to Magna's data.

Online retail is instead being driven by the convenience offered by tablet and smartphone devices. Online shopping through desktop computers increased 11% last year, according to the report while smartphone and tablet shopping increased 19% and 52% respectively.

While the vast majority of people still go online to seek out bargains, slightly fewer people did that this year than last year (down five percentage points to 75%) according to the report. While a small change, the inference is that the market may be maturing away from price alone.

Equally, more people this year said they liked to engage with a real person when shopping. It increased from 49% to 54% this year.

The report also found that bricks and mortar stores are still seen as providing the best service and brand experience.

Victor Corones, Magna Global Australia managing director, said: “This year’s data shows some important shifts in retail customer dynamics. This shift in shopping behaviour is an important detail for marketers and an indication that media dollars should be shifting to meet shoppers' online considerations.”

Meanwhile, the latest EMMA data shows Australians spend more than $1,000 a month on consumer goods across online and physical stores. Most of spending goes on groceries at $141 per week, followed by clothing at $104 per week. Furniture and homewares accounts for $101, $96 goes on electrical goods, $83 on hardware and gardening and $77 on IT products, each month.

The survey did not break down how much of that spend was online and how much was offline. However, according to NAB research, Australian online retail sales rose to $14.1 billion in the year to July 2013, a level that is equivalent to 6.3% of traditional retail spending. That would suggest less than $100 of the $1,000 figure mooted by EMMA is spent online.

The EMMA data, based on its panel of 54,000 Australians, suggested that while more than three quarters of Australians (76%) have shopped online in their lifetime, more than three quarters (86%) have visited a shopping centre in the last month. Westfield malls, Bunnings, Big W, Kmart, Target and Officeworks were cited as favourite big stores by those surveyed.

Ipsos MediaCT managing director Simon Wake said: “Our EMMA research found that although the Australian wallet has been stretched by the GFC which curbed discretionary spending, there is still a strong appetite to shop with consumers embracing both online and bricks and mortar stores with equal fervour.”

The survey showed that international online retailers remain a major threat to domestic retailers with almost as many (six in 10) shopping online with international retailers as with domestic retailers (seven in 10).

The most regular online shoppers are those earning over $80,000, and those aged 30 to 44.

Shoppers in the 30 to 60 age bracket earning more than $80,000 represent the top 33% of all online spending and are the biggest online shoppers, spending nearly double the average at $1,900 a month. A big opportunity for marketers.

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