The rapid adoption rate of eCommerce in Australia increasingly illustrates a fast-moving, ‘gargantuan’ machine. But looking at the performance of local businesses, compared to the global ‘giants’ entering the market, will Australian brands get steamrolled? Teresa Sperti, Founder and Director, Arktic Fox, discusses.
eCommerce in Australia is experiencing a surge. Our recently released report, Digital, Marketing & eComm in Focus 2025, shows that 2024 broke new eCommerce records. Among our insights, we cited Australia Post data that revealed some 9.8 million Australian households spent more than $69 billion online in 2024, a 12% increase compared to the previous year.
This growth isn’t going to slow down. Australia is already highly acclimatised to online shopping, and the next generation of buyers are digital-first. Australian retailers have been watching these shifts unfold, but a downturn in trading performance for many has driven them to double down on delivering on short-term performance outcomes.
This, on its own, would be a challenge for Australian brands that were perhaps getting pipped by their peers in the same local marketplace, but it feels like that ship has already sailed. International giants like H&M, Uniqlo, Zara, Sephora, Amazon, and Temu have established themselves in the Australian market, and they’ve brought sophisticated eCommerce capabilities built through years of global competition.
No longer competing with other local businesses slowly figuring out the finer points of good digital commerce at the same pace, Australian brands are up against massive, established players with deep eCommerce and omni-channel expertise, substantial technology investments, and proven approaches for personalisation, customer data management, and seamless omnichannel experiences.
With global giants now firmly established and bringing their sophisticated eCommerce capabilities to bear, this challenge is substantial. But just how serious are these maturity gaps, and what’s driving them?
The Maturity Crisis
Since we began examining eCommerce as part of our annual Digital, Marketing & eComm report two years ago, we’ve seen a positive shift in how brands perceive the importance of eCommerce and omnichannel experience delivery. However, the data we collect suggests less confidence, capability and meaningful progress when it comes to implementing and innovating in the digital and eCommerce space.
While the eCommerce market has grown strongly over the past 12 months in Australia, that growth isn’t distributed evenly. 25% of retailers saw significant growth in eCommerce (20%+ YOY) , while 38% grew by less than 10%; some of those even recorded negative growth.
The numbers are telling. 75% of all surveyed brands felt their eCommerce maturity lags behind global leaders and they have work to do. 62% of leaders believe their business understands the importance of delivering an omnichannel experience, which suggests a pretty big number of those that still don’t.
Looking at just retailer respondents from our data, we know that 36% of retailers believe their maturity compared to global leaders is very low or low. When we include moderate maturity, that grows to 67%. In fact, only 2.5% of retailers believe their maturity is very high and on par with global leaders.
Whilst many Australian retailers are not the size and scale of global players, upweighting capability to better compete with global leaders is important for Australian businesses if they want to remain competitive or relevant. As mentioned above, growth in eCommerce (and more broadly, digitally influenced sales) will continue as more consumers are born into a marketplace where eCommerce and digital storefronts are more natural than novel.
Focused on Yesterday’s Performance
When we look at Australian retailers and their current eCommerce strategies, investments and their lack of readiness for the sweeping changes the market is going through (such as major player market share growth and generational consumer changes), a few things stand out as problem areas for these brands.
I believe, first and foremost, that many Australian retailers are investing predominantly based on sales performance today rather than investing to build capability and deliver future sales tomorrow alongside today’s performance.
They know in many ways that they lag in eCommerce maturity when compared to global leaders, but they are hamstrung by ‘business as usual’ approaches to gauging the value of their eCommerce business, rather than investing and innovating. This predominantly short-term focus leaves them vulnerable to competitors building for the future. There are however exceptions to the rule, local supermarket giants like Coles and Woolworths are investing heavily, as the pressure mounts from the onslaught of Amazon and others.
There are other maturity areas local brands are lacking in, which global brands have been able to wield effectively. If we look at just retailer findings from our report, we see that 84% of brands believe they are ’emerging’ at best when it comes to building a unified view of the customer. A unified view of data underpins personalisation, effective reporting and measurement, all of which are vital for eCommerce.
But that’s not all. We see just shy of 50% of retailers suggesting that they are not resourced appropriately to realise the true potential of eCommerce. eCommerce being embedded as part of running the business and seen as an all-of-business priority is also a challenge for many, with 30% of retailers indicating that the business is not backing their eCommerce endeavours and direction.
Driving profitability is also one of the three top priorities for retail brands in eCommerce, which reinforces the challenges of making the economics work given the costs to operate on a model that increasingly sees more sales shifting to eCommerce.
Retailers often measure eCommerce performance based solely on eCommerce sales, yet it plays a critical role in driving omnichannel outcomes. While we do see some brands like Coles, Myer and others deploying more mature measurement approaches like ROBI or ROBIS, to measure the influence of digital and eCommerce efforts on instore sales (which is a critical unlock to understand the true value of their investment), others are not yet there.
Maturity in unifying customer data, personalisation, effective reporting that measures the full value of eCommerce and digital, resourcing, and a commitment to eCommerce as central to business all represent points of difference between many Australian brands and the global players that are succeeding.
AI and Future Challenges
With their houses out of order and lacking maturity in the current core pillars of eCommerce, Australian brands stand to be challenged even further with the growth of AI, which is going to completely reshape the shopping experience.
The way consumers will shop is already increasingly becoming conversational, and that requires retailers to rethink the shopping experience. Rufus, Amazon’s new AI-powered shopping assistant, is already setting the bar for what the future of shopping will look like, as is the new Buy for Me feature Amazon is piloting, which will further challenge retailers to lift their game with respect to conversational shopping experiences.
It will mean the way consumers discover products will fundamentally change and shift. Consumers will be presented with fewer options, and consumers will be looking for solutions first rather than keywords, for example, “help me plan a party” rather than “buy decorations”.
This changes how we need to build and deploy product content, requires us to adopt GEO (generative engine optimisation), and consider how we deliver conversational-first shopping experiences that are voice-led, not just text-based.
Agentic AI will also see machines talking directly to machines to undertake shopping on behalf of consumers and B2B buyers and that will completely up-end the shopper journey as we know it – as it means we need to market as much to the machines as we do shoppers.
I believe retailers who don’t understand where the industry is headed are at risk of extinction within five to ten years, given that the vast majority of product discovery for most categories now starts online.
Is It Now or Never?
It feels like Australian brands are caught between yesterday’s thinking and tomorrow’s reality, while international competitors build next-generation capabilities that will define the future of retail. The goal posts are shifting quickly, the comfort of local market competition is gone with the giants well and truly established in-market.
Based on our research, it’s clear there are a number of considerations our brands need to make.
Australian brands need to stop looking at yesterday’s revenue in eCommerce and get serious about eCommerce being central to their business to drive all of business performance.
This means investing in personalisation, accelerating the build of a 360-degree view of the customer, and delivering connected and valuable omnichannel experiences. It also means streamlining processes for users, such as ensuring a fast and responsive shopping experience, making the checkout process quick and easy, and providing good shipping options.
This article referenced insights collected in the Digital, Marketing & eComm in Focus 2025 report. To see the full report and findings, click here. A purely retailer-focused version of the report has also been produced, available here.
This article was written by Teresa Sperti, Founder and Director of Arktic Fox.