Exploring markets: Australia

Exploring markets: Australia

For retailers thinking about international expansion, Australia is an appealing option – Australian consumers benefit from a high disposable income, have a solid eCommerce penetration rate and register a lower than average return rate globally. Combine these factors with a comparatively narrow product range availability, due to the country’s isolated location, and you have a population that is very comfortable shopping with foreign retailers.

And to make this market even more attractive, UK brands and retailers appear to be a destination of choice for Australian shoppers, right behind the US market. So, should you go?

We ran a quick poll 100 Australian shoppers who had made a purchase from a British retail in the past 12 months to get the scoop on their expectations when shopping with the Brits.

We then compared this against 40 UK retailers who have a presence in Australia to find out how well they were serving these expectations. Here is a digest of our findings.

 

Quality is key… and so are pricing and seasonality

 

 

When asked what would make them buy from a British retailer, product quality came first for 34.4% of the respondents.

However, it is important to note that Australians are generally price-sensitive shoppers. Make sure currency variations and fulfilment costs don’t affect your pricing too much. 

Another thing to consider is the counter-seasonality, both in terms of product offering and promotions. 78.3% of the retailers benchmarked don’t offer a fully localised website (see table below). The perceived quality of your products won’t be of any value if you promote your winter coats when it’s summer in Australia! 

 

Australian shoppers are not put off by longer delivery times

 

 

 

Australians shoppers don’t mind longer delivery times when buying from an international retailer’s site. 30.6% of the surveyed consumers responded that 14 days was an acceptable time, and speed of delivery only ranked third among the most important criteria, behind delivery cost (35.5%) and on-time delivery (32.1%).

Good news on the UK retailers’ side, as a majority (62.1%) delivers between 7 and 10 days, whilst mainly offering standard delivery as their only delivery option (see table below). 

Considering that on-time delivery is also an important criteria for Australians when shopping online, it would be a good idea to offer tracked delivery, so they can know exactly when to expect their order. Only 8% of UK retailers offer this service at the moment in Australia (see table below). 

 

Australian shoppers expect to pay for delivery 

 

 

41.5% of the respondents are happy to pay up to $9.95 for delivery when buying from a UK retailer.

A significant number of shoppers (12.1%) are even ready to pay up to $29.95.

On the retailer’s side, 14% offer delivery for under $9.95, and 22% offer free delivery with no minimum order. Yet, a majority (64%) register delivery cost above the $9.95 threshold, with 22% between $20 and $29.95 (see table below). 

 

Home delivery is by far their preferred delivery option… but it might change in the future

 

 

64.5% of those surveyed indicated a preference for home delivery. But parcel lockers are increasingly popular in Australia, as they’re seen as a convenient alternative. Yet, only 3% of UK retailers offer this service.

 

UK retailers with a presence in Australia

 

 

If you’d like some advice on how you can optimise eCommerce for the Australian market, download our 10-step guide to building an operational plan or contact us.