Australia is no longer lagging in ecommerce uptake, and brands can’t afford to get it wrong

Peter Vogel
By Peter Vogel | 11 May 2021
Peter Vogel

Peter Vogel, CEO, Wavemaker Australia & New Zealand

There was a time when eCommerce in Australia was lagging much of the world. But that has gone the way of international travel and shaking hands.

As we all know, among the many changes brought about by the COVID-19 pandemic has been in Aussies’ shopping habits.

Figures from Salesforce’s Holiday Insights Hub and 2020 Holiday Predictions report revealed that Australia and New Zealand recorded the highest eCommerce growth globally at 107% in Q3 2020, and 108% in Q2 2020.

But things are about to change again. And how brands respond will have a lasting impact on their fortunes.

With restrictions having lifted across Australia (bar the odd three-day lockdown here and there), and life returning to some level of normality, it’s tempting to think consumers will return to their pre-COVID habits. And yet we know from experience, that’s unlikely to happen. Once people change their behaviour, often there’s no turning back.

The challenge facing brands now is to continue to adapt to these irreversible changes. For those that saw decline in 2020, the question is how do they get their business back to growth? And for those that did well, how do they maintain the growth now that Aussies can spend their money on restaurants and domestic travel again?

A more competitive landscape
Improving their eCommerce experience is a good start. When shopping online, a customer can visit dozens of retailers in the same amount of time it takes to visit just a handful in real life. Coupled with the fact that shoppers use 43% more touchpoints and complete 13% more actions when buying online versus instore, it’s clear there are many more opportunities for customers to choose your competitor’s product over yours.

Add in eCommerce’s ability to shrink the purchase journey in some instances while expanding it in others, and things get really interesting.

The conversation now becomes: do I operate at the bottom of the funnel to optimise the sale at the end of the purchasing journey, or do I invest in the brand to ensure the customer comes directly to my brand?

Keep your eye on the big picture
Playing at the bottom of the funnel and relying on optimisation to capture sales is a trap many brands fall into.

It ignores the reality that eCommerce has created completely new purchase journeys, and that brands now need to transform their entire marketing approach. From the full-funnel customer experience, to where you invest your paid media money – eCommerce is much more than just digital marketing. The big picture is paramount, and brands need to relook their entire marketing strategy.

Cosmetics retailer Mecca is a good example here. When lockdowns shut its stores across Australia, Mecca shifted rapidly to provide online customer experiences that mirrored its instore experiences. It launched Mecca Live, which offered beauty expert interviews, video tutorials and personal online consultations; and adapted its product focus and super-charged its eCommerce distribution – changing its complete approach.

As founder Jo Horgan told the AANA RESET conference late last year, the brand’s share of the prestige beauty market in Australia and New Zealand continued to grow at double-digits through the COVID-19 crisis, when the overall prestige market dropped 12% year-on-year.

Another brand applying the lessons of COVID-19 was Airbnb, which confirmed moving spend from performance marketing into brand marketing, having learnt during COVID that it was the strength of its brand that was fuelling its business. Airbnb’s full-funnel approach has been focused on moving from mass travel to ‘meaningful travel’; by which who you travel with and the experiences you enjoy together are more important than the destination itself.

No doubt marketers across all markets will be watching Airbnb’s move closely.

"Normal" doesn’t exist anymore
So, what’s next? People aren’t going to go back to shopping centres like it’s 2019. Retail will now exist in this peculiar hybrid of instore and eCommerce.

But also, consumers have been reminded of the great power they wield. They know they have great choice – shopping at midnight; why not? – and they don’t have the tolerance or patience for bad brand experiences. Fast shipping, expert customer service, after-purchase care, easy returns – not negotiable.

But most of all, it’s about the brand.

If ever there was a time for brand building, this is it. To thrive in this post-COVID world, brands have to preference brand equity and brand experience over instant sales.



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