Teresa Sperti

Overseas Online Shopping - The Real Issues

Every day over the past few months articles about big retailers losing out to the online stores overseas are being published. Big retailers like Myer, David Jones and Harvey Norman have launched a campaign against the government to pressure them to take action, but have retailers missed the mark? In my opinion yes, retailers are calling on the government to fix the issue by charging consumers GST on overseas goods, however the problem is in their own backyard. Whilst GST free goods and a strong Australian dollar are driving some consumers overseas to buy online this isn't the only reason consumers are shopping overseas. So just why are consumers really shopping from overseas stores?

Every day over the past few months articles about big retailers losing out to the online stores overseas are being published. Big retailers like Myer, David Jones and Harvey Norman have launched a campaign against the government to pressure them to take action, but have retailers missed the mark? In my opinion yes, retailers are calling on the government to fix the issue by charging consumers GST on overseas goods, however the problem is in their own backyard. Whilst GST free goods and a strong Australian dollar are driving some consumers overseas to buy online this isn’t the only reason consumers are shopping overseas. So just why are consumers really shopping from overseas stores?

Reason 1: Retailers Haven’t Evolved
The online phenomenon isn’t new – Amazon has been selling books for over 15 years, so why is it now a problem? The reality is consumer behaviour has changed and retailers haven’t evolved. Retailers are crying foul that international sites are stealing their sales but where are their local alternatives? Whilst a few retailers are online and reaping the benefits (Witchery, Sportsgirl, BigW) there is still a significant portion of those that aren’t. Portmans, Dotti, Harvey Norman, Roger David, House, Ikea & Freedom Furniture are just some of the many brands still not retailing online.

Reason 2: Retailers Are Delivering Inconvenience
What would happen if a traditional store only displayed half their stock and the other half of the store was left empty? My guess is that consumers would say the store lacked variety and choice and it would struggle to gain repeat patronage from shoppers. You would of course never see this happen offline so why does it happen online? Whilst brands like Myer, Kmart and David Jones provide consumers with the option to purchase goods online, they provide limited choice and selection. Online isn’t just about cost it’s about convenience and these online stores are making it more difficult for consumers to buy products from their brand online than offline. So there is no surprise that consumers who prefer to shop online and beat the queues are frequenting sites which provide them with a broad range of products which they can package together to reduce delivery costs.

Reason 3: It’s A Product Issue Not Just Price
Whilst many online retailers are citing price as the key reason that consumers are shopping overseas it seems this is not the case. Recent research conducted by The Leading Edge for PayPal shows that the main reason consumers are shopping from overseas websites is to gain access to goods and services not available in Australia (32 per cent) with a much smaller group saying price is the main issue (19 per cent). This research shows that retailers are not in touch with their market as a whole and this is not only an online issue but impacts their entire business. These kind of issues need to be addressed if retailers will continue to be competitive both offline and online in Australia.

Reason 4: A Lack of Appropriate Investment
Whilst some retailers are investing online we are still seeing a significant lack of knowledge in the digital arena. Digital is being championed by traditional marketers or junior staff in the hope they will bring home the bacon. Forget it! Those serious about online retail need to;
a) Hire senior digital talent who can craft an online experience and develop a marketing strategy to deliver results.
b) Understand that digital is here to stay and no government policy will change that. According to Morgan Stanley by full-year 2015 Australian online retail penetration will reach the current US level, and internet retailing could take 22% of the incremental growth in Australian retail sales,”
c) Organisations need to invest the appropriate amount of resources (financial or otherwise) to build an effective eCommerce strategy. Without the appropriate investment to build a good user experience and drive eye-balls to the online store there will be few outcomes.

Is this the “WAKE UP CALL” that will finally get retailers to effectively gear up their digital strategies? Only 2011 will tell.

What are your thoughts on the topic of online retailing in Australia? Please share them below.

 


COMMENTS

Posted by Suzi Dafnis, 11 January 2011

I totally agree...When stores continue to have shabby sites (that are a total disconnect from their offline presence) OR, as you pointed out, fail to have a presence at all, they shouldn't be crying fowl. Step up the game!

Posted by Carolyn King, 11 January 2011

I'm amazed at how many Australian retailers still just have catalogues on their websites, instead of selling online. Not sure if that's down solely to lack of investment, or if they think selling online will deter people from visiting their stores. Haven't they heard of brand engagement? People buy stuff from Apple online but they also love going to real world Apple stores because of the coordinated brand experience and customer service.

If retailers invested in good online stores, maybe their bricks and mortar stores could evolve to focus more on customer service. They could also offer the option to order online and collect from your local store, which would encourage brand loyalty and get more people through their doors. I'm not a retail expert but I can see the business value in that!

Posted by Gerry Kookmeyer, 11 January 2011

We keep talking about this kind of stuff but I wonder how long it's really going to take to sink in for retailers? Another 3, 4 years?


CHAMPION IN FOCUS

Teresa Sperti Teresa Sperti
Company: Coles Liquor
Position: Marketing Manager - Digital & Loyalty

Latest Articles by Teresa

January 16 | 2013 digital predictions from the experts + some of my own!
December 17 | Australia's top 5 defining digital moments of 2012
August 21 | Online Retailers Have Real World Envy

Article stats

30 Days: 0 articles, 0 views
All time: 0 articles, 0 views


    Twitter
    Follow me on Twitter

    ABOUT TERESA'S COMPANY

    Coles Liquor


     More info & Contact Details



     

    RELATED EVENTS

    NSW Public Sector Grades 9-10 High Performance and Leadership Workshop NSW Public Sector Grades 9-10 High Performance and Leadership Workshop

    Develop and refine core skills and key leadership capability to achieve success and excel in NSW Grade 9-10 level roles and beyond.

    WA Public Sector Level 7-8 High Performance & Leadership Workshop WA Public Sector Level 7-8 High Performance & Leadership Workshop

    Develop and refine core skills and key leadership capability to achieve success and excel in Western Australian 7 - 8 level roles and beyond.

    Executive Assistant Development Intensive Executive Assistant Development Intensive

    Adding value and enhancing your personal and professional effectiveness as an Executive Assistant.

    The Women in Project Management Leadership Summit 2018 The Women in Project Management Leadership Summit 2018

    Practical advice and strategies to guide female leaders for career advancement in the project management space.

    Public Sector Workforce Analytics Workshop Public Sector Workforce Analytics Workshop

    Emerging tools and frameworks to enable best practice workforce analytics and planning for HR Professionals.

    RELATED COMPANIES

    The Creative Collective The Creative Collective

    The Creative Collective, are a multi-award winning, busy and rapidly growing creative services agency offering PR, marketing, branding, websites, online marketing, graphic design, print and more to a wide range of clients.

    Clemenger BBDO/Proximity Melbourne Clemenger BBDO/Proximity Melbourne

    A team of design and technology specialists who collaborate with Clemenger BBDO and Clemenger Proximity to bring integrated marketing campaigns to life through the execution of world-class interactive content and experiences.

    Hydrix Hydrix

    Hydrix is a leading software and electronics design consultancy. One of the largest design consultancies in Australia, we specialise in the design and development of high technology business, communications, mobile and industrial products and services

    Juno Interactive Juno Interactive

    Juno Interactive connects consumers to entertainment content by developing solutions that allow people to watch and listen to their favourite media, at any time, in any place.

    The Cue Project The Cue Project

    The Cue Project is a very agile, global resourcing, marketing services & interim management organisation with a highly synergised portfolio of leading international clients, projects & associates. We LIVE and BREATHE the unique digital & mobile space.


     

    LATEST DIRECTORY LISTINGS Boost SEO - add your company for free

    Mad Dog PromotionsProtonbits Software Pvt LtdCat Rubbish RemovalEnertec Windows & Door SystemsVacuumSpotSally Dasouki - Melbourne Victoria, AustraliaVazooky DigitalDr TurnerAspect Shade