Slow Delivery is Hurting Australian Online Retail

To compete effectively, Australian retailers need to think beyond ‘units sold’ and understand their customer’s full engagement lifecycle including shipping, returns and other value-added benefits, according to new research. 

The PayPal mCommerce Index exposes a significant gap between consumer demand and the shipping capability of Australian online businesses. The study found that 42% of Australian smartphone users say that Australian businesses are behind when it comes to shipping and a further 57% are deterred from shopping at a store again if shipping takes too long.

The  report further reveals that while two thirds of online shoppers (63%) would definitely buy an item in their online shopping cart with next day delivery,which drops sharply to 28% for 4-7-day delivery, the majority of Australian businesses (54%) have no plans or don’t intend to offer next-day delivery. Currently, only a third of Australian businesses offer next day delivery (33%), with 13% planning to offer next day delivery within the next five years.

 The research highlights the opportunity for Australian businesses to close the gap, according to managing director of PayPal Australia, Libby Roy. “With almost half of mobile shoppers (47%) saying they’d return to a merchant who offered next day delivery, there’s a real opportunity for Australian retailers who get their shipping speed and price right.  Australian retailers are operating in a global market where free and fast shipping is now a consumer expectation. The online shopping experience doesn’t end at the checkout– product delivery is a core part of the end-to-end experience.”

The study shows that lengthy Australian shipping times undermines the benefits of mobile shopping more broadly, with 42% of Australian mobile shoppers stating slow shipping makes the convenience of online shopping redundant.

Competition

“With two online shopping giants, Alibaba and Amazon, poised to enter the Australian market, local consumers will have greater choice and online retail will be more competitive.  To compete effectively, Australian businesses need to think beyond ‘units sold’ and understand their customer’s full engagement lifecycle including shipping, returns and other value-added benefits,” Roy continued.

Cart Abandonment

The survey also reveals shipping is a key factor in shopping cart abandonment. Almost three quarters of online shoppers (73%) have abandoned a purchase due to shipping costs being too high, and 42% have abandoned a purchase because shipping took too long. More than half of online shoppers expect a free shipping option, and the same proportion (57%) would not shop twice with a business whose delivery took too long.

Match Mobile Immediacy with Delivery Speed

“Australia has one of the highest levels of mobile penetration globally and 71% of Australian smartphone users shop on their mobile devices.  Yet, it seems the Australian shipping experience is making the convenience of mobile shopping redundant. Although online retailers may not consider shipping to be a business priority, the Trends Report demonstrates that matching the agility of mobile transactions with great delivery is critical to customer loyalty and overall business success,” said Roy.

Jane Lu, CEO & Founder, Showpo, says that for a business, meeting consumers’ expectations is critical to growth: “We know that our customers expect to receive their products quickly – fast shipping, along with a great mobile experience is how we stay ahead. We know that we’re not just competing with Australian retailers, the world of online shopping has made every global retailer our competitor.” 

Categories

Nearly one-third of respondents ranked groceries and food and drink as the two most important categories for next day delivery (35% and 34% respectively). Tickets to music, movies and arts, and clothing and accessories tied for third place, both prioritised by 9% of respondents. In comparison, there are some things we’re prepared to wait for with sporting goods and toys and games ranked as the least important for next-day delivery (1% respectively). 

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