Who’s shopping and what did we buy?

Residents living in Victoria’s Point Cook made the most online purchases by volume in 2023, followed by Queensland’s Toowoomba and Victoria’s Hoppers Crossing.

The suburbs that showed the most growth in online shopping were Fraser Rise in Victoria, followed by Queensland’s Waterford West and Woodford.

By state, Western Australia saw the most growth in online purchases (5.1 per cent), followed by the Northern Territory (4.6 per cent). The ACT and NSW showed the greatest declines in online shopping (2.3 per cent and 2.1 per cent respectively).

Australians spent $16 billion on sprucing up their homes and gardens and a further $15.8 billion on variety stores, particularly online marketplaces, a lift of 9.1 per cent. They also bought more food and liquor ($13.2 billion) online as they shopped around for better deals on groceries. Meanwhile, Australians pulled back on buying clothes and accessories, recreational items, beauty products and books.

While Gen Z contributed the least to online shopping, they were the least loyal, with two-thirds willing to switch retailers for faster shipping and are the most likely (51 per cent) to return items.

As higher fuel costs lead to higher delivery costs, some retailers began raising the minimum order price for free shipping. To deter shoppers from returning items, some retailers such as ASOS Australia, Zara and Boohoo added a fee on returns.

“What they’re trying to get away from, and we do see this, not so much in Australia but particularly during COVID, [someone] will order 10 pairs of shoes and send nine back. That’s great for the receiver, but what a shocker for the retailer,” said Starr.

“There’s an element of psychology there … Even if it’s $1 or $2 … maybe I’ll keep that after all.”

‘Strategic shopper’

While the highs of the lockdown-induced online shopping boom have cooled down, online shopping has become a steady habit, making up $16.80 of every $100 spent on retail. Australians are also doing it more frequently: the number of households that shopped online 11 times or less last year has dipped, while the number of households hitting “buy now” 26 or more times a year has ticked up.

Major sales events are also making up a bigger part of the equation. Last year’s Black Friday was 88 per cent bigger than 2019; meanwhile, end-of-year financial sales (EOFYS), Cyber Monday and Boxing Day saw online purchases 75 per cent, 70 per cent and 67 per cent higher than pre-COVID.

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Where Christmas sales have traditionally been the busiest period for Australia Post couriers, retailers are closely watching the way many shoppers have pulled forward their end-of-year Christmas shopping to take advantage of the significant discounts during the increasingly lengthy Black Friday and Cyber Monday period.

“We’ve almost crossed over into November being the bigger month,” said Starr. “Will this year’s November be bigger? Maybe … people [are] being more discerning, and we call the strategic shopper.”

The future of Australia Post’s revenue will come from parcel deliveries, which are responsible for a 1.3 per cent uptick in revenue to $33.6 million for the half-year, leading to a lift in interim net profits. But its ailing parcel business recorded losses of $182.1 million.

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To stem the ongoing losses, Australia Post will lift the basic postage rate on small letters or postcards from $1.20 to $1.50 from April 4 onwards. The cost of sending large letters weighing up to 125 grams will rise from $2.40 to $3, while large letters weighing up to 250 grams will go from $3.60 to $4.50.

This proposal, flagged by Australia Post in August last year, was officially approved by the ACCC on Monday.

“This decision is based on our finding that Australia Post is not likely to recover revenue in excess of its costs for reserved letter services over the period 2023–24 to 2025–26, even if the proposed 25 per cent increase in the price of the notified letter services is implemented,” the regulator said in its decision paper.

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