Local brands are beginning to jump on the affiliate marketing bandwagon. Greg Shepard predicts this is one of a few signs that the space is due to explode.
While affiliate marketing has seen impressive growth in America (about $4.1 billion according to Forrester) and in the United Kingdom (about $1.65 billion according to PwC), Australia lags. Some of that can be attributed to infrastructure issues which have stunted the growth of online retail.
In addition, some large retail brands such as David Jones, Myer, Coles and Woolworths haven’t fully embraced online retail partially leading to the fact 26 percent of online sales go to overseas companies according to the NAB. And it’s important to note that this 26 percent primarily consists of overseas retailers who have embraced Australian e-commerce ahead of the country’s own retailers. Add to that the fact Australia is full of duopolies and oligopolies without much incentive to innovate and you have a challenged marketplace.
But all is not lost. There are certainly some signs of growth in the space. Some telecommunication firms including Vodafone have embraced affiliate marketing. Optus is launching a test program for three months this autumn. And Telstra is expected to launch very soon as well. In the retail space, supermarket chain Woolworths has been experimenting with online liquor store Dan Murphy’s and more recently with online retailer Big W which launched an affiliate program in May 2013.
David Jones is currently experimenting with a private affiliate program in Commission Factory. The other major Australian retailers including Coles, Myer and Harvey Norman do not currently have affiliate programs but in the network space, global network Linkshare has recently launched an Australian presence and AvantLink plans to launch a program later this year. Other more local networks such as Commission Factory, DGM Australia and OMG have launched and have experienced substantial growth.
While many Australian retail affiliate programs are typically online retailers or international brands that have extended their affiliate programs to include Australia, many local retailers have launched programs as well. Together, these include Artline, Hotels.com, Apple, Australian Ugg Boots, Big W, Bonds, Budget Direct, Clinique, Crocs, Dell, Dodo, Vision Direct, Fitness First, Office Group, eBay and Vodafone.
Apart from merchants launching affiliate programs, in the airline space, Virgin Airlines is working with frequent flyer brand Velocity on a loyalty program and Qantas Airlines is expected to roll out a program soon as well.
Despite the fact that much of Australia’s growth in the affiliate space has come from US and UK entities entering the Australian market, BDS, a Brisbane-based mobile loyalty program provider formed in December 2013 following the merger of Qwibble.com.au and Zippy.com.au, recently received $500,000 in funding from Brisbane Angels. BDS, under the Zippy brand name, has moved forward with a new loyalty app geared towards small and medium sized businesses.
Of the app, Zippy CEO Gerard Doyle said, “There is underlying demand for cheap and easy to use eLoyalty products for retailers as evidenced by social media such as gathering Facebook likes or Twitter followers. BDS are attempting to engage and support that demand with our loyalty mobile app.”
So there is certainly movement in the marketplace. And Australia’s got one thing going for it that America, in most cases, does not. A lower sales tax. At 5.6 percent, it’s lower than most American states.