Online is on trend – Australia’s eCommerce explosion

How can your business benefit from the disruption caused by the eCommerce boom?

Knock knockWho’s there? Well in all reality, probably no one. So, what are you going to do about it?

The latest industry paper from Australia Post, Inside Australian Online Shopping report 2018 confirms that Australia continues to experience significant growth in eCommerce from representing 5.6% of all retail sales in 2015 to a projected share of 7.2% in 2019. In 2017 we spent a record number of $21.3 billion on online purchases. That’s a lot of doorsteps.

But here’s the thing, it’s no longer the exclusive territory of the florist or the birthday present from Auntie Jean dropped off by your friendly postie or the ‘once in a blue moon’ delivery of your new white goods. The items handed over, where the handover takes place and the time of day it happens has changed beyond recognition. (remember the good old days when you were told to be at home to receive your delivery between 10 in the morning and 4 in the afternoon?) Everything was delivered by hand and the most sophisticated technology in the transaction was the pen you used to sign your name on the docket.

Such memories are now consigned to history.  Rapid advances in technology and subsequent changes in consumer behaviours are placing a heavy burden on existing infrastructure and networks with new participants in the emerging share economy wreaking further disruption. However, an unpredictable landscape is also laden with opportunity if you access meaningful market intelligence and ignore the fake news. Understanding the key implications from reports such as this from Australia Post, helps identify where you can benefit from the disruption.

1.You need to know your customers better than you know yourself.

To meet the demands of eCommerce requires an in-depth understanding of who your customers are and their multifarious shopping habits.

(i)  Build a strong demographic profile.

  • Who are your customers?
  • Where do they live?
  • Where do they work?
  • What age group are they?

(ii) Understand their purchasing behaviours.

  • What are they buying?
  • What drives their decisions?
  • When do they need it?
  • Where do they want the handover?
  • Can you guarantee a secure handover?
  • Can you access required locations with increasingly diverse parcels?

(iii) Understand your customers’ communication and service expectations.

  • Customers expect to be able to track their order in real time.
  • Customers want to make last minute changes to their order.
  • Customers often expect quicker than ‘same day’ delivery.
  • Customers expect free returns on unwanted goods.

Indications are that these trends are set to continue.  Australian consumers have a reputation as enthusiastic and early adopters of technology and as a consequence have raised their expectations. Retailers are scrambling to respond with many offering a seamless purchasing experience between the various channels and the pressure on the supply chain is enormous. Particular expectations such as fast delivery (often free, placing further pressure on the revenue per parcel) and increased visibility where the customer can track dispatch and delivery are particularly onerous.  The range of goods being purchased is becoming broader and perishables distributed from dark stores and dedicated fulfillment centres have their own niche requirements both at fulfillment and handover.

2.What are the top 5 characteristics your business needs to meet the new last mile test?

Our experience has shown us that those adapting best to this new retail world are not only well versed in the latest trends but embrace them and their teams are characterized by some specific attributes:

  • Collaborative – they focus on building partnerships which build to each other’s strengths and they share knowledge.
  • Flexible – they develop systems, networks and partnerships that can move with the whims of the customer.
  • Innovative – they are creative in finding solutions.
  • Reactive -they listen to customers and position themselves to respond to new trends.
  • Analytical – they continually ask questions are more rigorous in their assessment and testing of their processes and networks.

Disruption is not a roadblock to success but your thinking can be. The growth of eCommerce in Australia means that unpredictability is the new norm for supply chain participants and success in this new ecosystem will hinge on your team being well briefed and armed with the right mindset.  Knowing your customers well and investing in strong partnerships is critical to last mile success so that when you “knock knock” on the doorstep you can guarantee that the joke will not be on you.