How can Australian retailers jump on board the e-Commerce train and stave off encroaching international competition?
Friday, January 10th, 2014
Retail in the U.K. and the U.S. is often leaps and bounds ahead of Australia, whether it’s innovative marketing techniques, in-store technology, or, in this case, e-Commerce. It’s hard to believe that just three years ago, there were no major Australian retailers with an online presence. While Aussies have made a lot of progress, they’re still lagging behind.
A recentreport by NetSuite and the Australian Retailers Associationshows that only 15 percent of Australia’s approximately 77,000 businesses currently transact online. Since Australian retailers don’t provide their consumers an opportunity to purchase online domestically, it’s no surprise that an estimated40 percent of online retail purchases go outside Australia.
There is great potential for Australian retailers to take advantage of domestic sales, with50 percent of Australians described as “digital buyers”who prefer to buy online when possible; however, retailers’ snail-like pace in adopting e-Commerce is seeing them lose out.
So how can Australian retailers jump on board the e-Commerce train and stave off encroaching international competition?
Price, albeit a key driving force influencing purchase behavior, isn’t the only way for retailers to compete for sales. And, let’s face it, with a relatively strong Australian dollar and a reasonably high threshold for tax-free purchases, competing for the lowest price out there is next to impossible for Aussie retailers. Australian online retailers need to look at innovative solutions to deliver superior service, build loyalty, and develop rewarding relationships with shoppers.
We’ve seen a select few Australian e-retailers doing this; agreat example is Sydney-based online fashion retailer The Iconic.Started in 2011, its main point of difference isn’t its competitive pricing, but rather its standard of service. It offers a 100-day free-return policy, free overnight shipping, 3-hour delivery for $10, an active call center, live chat, and an advisory blog. Should you be away from your desktop, it’s even launched a mobile-shopping app.
The Iconic addresses two of shoppers’ biggest objections to online shopping—immediacy and free shipping—which is leading to great success. In just two years, The Iconic has gone from four to 350 employees, attracted $20 million in international investment, and rivals British-based online retailer ASOS for number of unique visits to its site.
The Iconic is setting a great precedent for Australian online retailers, and I recommend other Aussie retailers follow its lead; otherwise, we will continue to see our retailers lagging behind their international competitors.
By Alexandra Stickler, Integer Australia
Image source: theiconic.com.au