The COVID-19 pandemic has been a major hit to a lot of businesses, and the lockdown has forced many people back to their home, but that has not stopped a sharp increase in the amount of Australian businesses and retailers that took a running jump into the world of e-commerce.
While there are still plenty of people out there spending money in retail businesses in person, the impact on e-commerce purchases is undeniable. Australians are becoming more and more aware of how Australia’s home delivery market is perfect for them, and retailers have begun to take in-store practices online as the growth of online consumers continues to tick up. It is all for one simple reason: COVID-19 changed the way that Australia’s consumers see their purchases and react to shopping online.
Any Australian industry can benefit from deliveries, but back pre-COVID-19, there was no guarantee that consumers would be interested and would usually turn their back on the idea. Delivery systems only turn a profit when the business can drum up interest and gather consumers willing to use it, and back then, the average person would never have small items delivered unless they needed to. Even back during the early pandemic, customers cut back on spending by pulling back how much they would order to be delivered.
However, with the arrival of COVID-19 and on the back of serious government restrictions, the limitations of retail as the strong back of Australian commerce became more apparent. Shoppers who would have spent three hours every Friday doing their end-of-week shopping were soon at the mercy of Australia’s lockdown rules, and that meant that their spending turned back towards deliveries that could be made any time to any Australia address, or services that required nothing but an email address to send results back to.
The Shift to Digital Retailers
As Australia embraced home delivery on the back of the virus, shopping began to change as well. A month ago, customers could have frequented two or three stores in their local area and gone for specialist products online. Now, with so much of every industry seen online in some form, the gradual growth of online business back during the pandemic’s early days has completely changed what sales are being made. Online businesses are no longer about specialist items on back-order, but are for whatever the customer may need: food and household necessities being two of the biggest sources of growth.
E-Commerce Marketing Changes
As more people turned to online shopping to replace their normal stores, they also opened themselves up to the impact of marketing material. Services relevant to life during COVID-19 were able to keep their industry the same, but branch off into more material that could suck in far more sales from people who had previously never noticed them.
This advertising media hasn’t just been a temporary change, but may have shifted the way Australia will shop in the long-term. Australia Post CEO Christine Holgate has openly stated that “over the next 12 months, home delivery is expected to remain 25% higher than pre-COVID levels”, a sign that customers have found online purchases to be more than just an alternative – it is a new way to shop, and one that they are happy to keep using.
The Twenty-Per-Cent Loss
Australia business suffered a big blow back during the early days of COVID, with an analysis of many retailers seeing sales fall by up to 20%. While the data may vary between markets and hot new products that consumers flocked to, it is clear that every day brought a chance of a business vanishing and not coming back. Back then, nobody knew what they would be facing or how much it would set them back as a company.
The same can’t be said of the online world: John O’Mahoney, a Deloitte partner, said that there is a prediction for “45% of purchases set to be completed online in the future”, which could easily mean that many business categories shift back to an online shopping system even after the pandemic ends.
Combine that with the gradual increase in the amount of information and data customers are willing to trade back for digital services (far more than just an email address), and many companies have seen an opportunity for not just sales booms, but a marketing boom. Even if we went back to life back before COVID, the data gathered is priceless.
Australia Post is one of the latest cases of a company turning recent events into a strength, with the company seeing a $2.4 billion boom over the three month period towards May 2020 – the time when COVID was hitting Australia the hardest. Parcel deliveries went up, and that led the company to continue putting effort into their parcel process. Now, almost a year later, they are continuing their constant analysis of how their services perform during the pandemic – and it is not slowing down.
Life after COVID-19
Australia will eventually outpace the pandemic and be ‘free’ again, but everything we saw last year (and will see this year) will continue to stay relevant. Consumers have found e-commerce options that they like to use and are happy to share across social media, while companies like Australia Post and Payday Deals have seen report after report that shows at least a small boost every single time. The information and insights gathered aren’t just a sign of a temporary change, but a larger shift across Australian retail.
With more customers discovering e-commerce options and services such as Australia Post every single day, there will eventually be a point where the boom begins to roll back, but what happens then? Post-COVID, it is easy to assume that ecommerce will scale back and that 20 per cent loss will wipe itself away, but that is probably not the case.
Ecommerce: here to stay?
Whatever business categories a company fits within, ecommerce will never go back to how it was. Back before COVID, it was the way to back-order specialist items or get birthday presents behind a love one’s back. Now, it is far more than that, and even if a major report says that the booms are scaling back, there is no way that the market will go back into the shadow of physical retail. Retail is definitely coming back, but not as the giant it used to be.