Australian consumers are expected to spend $4.8 billion this year on online marketplaces this Black Friday and Christmas as they look to get the most value from their baskets, according to new research from ecommerce delivery leader, ShipStation.
The research was commissioned by ShipStation’s operating company, Auctane, in partnership with retail consultancy, Retail Economics. With eight markets surveyed (Australia, UK, US, Germany, France, Spain, Italy and Canada),the Peak Season Report 2023 highlights consumer spending intentions, channel preferences and delivery deal-breakers this peak season.
The state of play
With high interest rates and cost-of-living pressures, a cautious consumer backdrop is set to impact this year’s peak season with more than three-quarters (78%) of Australian consumers surveyed stating they plan to cut back on non-food spending related to Black Friday and Christmas – up 24% on last year. Specifically, over two-thirds (38%) of Australian consumers surveyed cited inflation and 20% highlighted a lack of savings, as their biggest concerns heading into peak this year.
That said, retailers appear to hold more optimistic prospects with almost two-thirds of online retailers surveyed stating sales volumes will broadly align with last year and close to one-quarter (24%) expecting volumes to rise on last year.
Despite a tough consumer backdrop, there is reason for optimism for online prospects, with 57% of consumers across the eight markets surveyed planning to do most – if not all – of their holiday shopping online – up from 49% last year. Looking at the Australian market, 72% of consumers plan to do some of their shopping online, and from this, 48% expect to do most of their shopping online.
Early shopping is a rising trend
Australian consumers are starting their holiday shopping earlier this year as they look to stretch budgets, with almost one-third (35%) of Australian consumers surveyed stating they are planning to start before October.
The research also suggests that retailers are looking to jump on this trend. One in four merchants surveyed intend to increase the number of their holiday promotions this year, with the same proportion planning to launch promotions before October.
The impetus to shop early and benefit from promotions is particularly pronounced among younger shoppers. Across all markets surveyed, 44% of digital natives (consumers under 45) intend to engage in festive shopping during promotional periods like Black Friday and Cyber Monday.
Conversely, older shoppers surveyed report being more likely to adopt more traditional approaches to better manage budgets including include self-imposed spending limits, trading down to value brands and using cash to help them stick to their budget.
Auctane head of Australia and New Zealand, David Boyer said, “As we approach this year’s Black Friday and Christmas season, Australian consumers are gearing up to spend $4.8 billion on online marketplaces. In the face of economic caution marked by high interest rates and cost-of-living pressures, it’s encouraging to see the majority of Australians planning to do their shopping online. This shift may be indicative of changing consumer habits, particularly among younger shoppers who are seeking out holiday promotions and early deals.
“While cost remains the king of considerations for Australian consumers, it’s interesting to note that they are willing to pay a bit more for quicker delivery, with 57% ready to shell out $6-7 for same-day delivery. These changing dynamics are driven by a digitally-savvy demographic under 45, who prioritise speed and convenience.
“In the face of cautious economic sentiment, it’s promising to see retailers are optimistic about peak season demand. As we navigate through these shifting consumer trends, it’s clear that the ecommerce landscape is evolving, and we at ShipStation are committed to helping businesses adapt and thrive during this pivotal shopping season.”
Online marketplaces gaining popularity
Online marketplaces look set to be the most popular channel of choice for online shoppers this peak season with 80% of Australian consumers surveyed expecting to shop on online marketplaces, with this figure rising to 90% across the markets surveyed. The research also suggests that around one in two online orders over the holiday season looks set to be made via a marketplace.
What’s driving the popularity of online marketplaces? Close to three-quarters (72%) of Australian shoppers surveyed believe online marketplaces offer better value than individual retailers, and almost half of Australian consumers (48%) state the main benefit of online marketplaces is that they offer more competitive prices and deals. Delivery also plays a vital part with 62% of Australian consumers believing they usually provide a fast and reliable delivery experience.
Cost is king in Australia versus other markets
With speed of delivery becoming more important during holiday shopping, in Australia, cost remains by far the most important shipping feature for consumers. More than three in four (78%) Australians surveyed highlight the cost of delivery as the most important factor when making an online purchase.
With this in mind, 45% of Australian consumers surveyed are concerned that shipping costs are too high during the holiday season. Alongside this, 42% of Australians are also concerned about long scheduled delivery times and 38% are worried about late deliveries or deliveries arriving when nobody is available to receive it, and 37% are worried about missing/stolen parcels.
Interestingly, while Australians surveyed expressed concern about delivery costs, many are willing to pay for a typical $30-50 online purchase to ensure it arrives quicker. In fact, 57% of Australian consumers state they would pay $6-7 to ensure same-day delivery and 42% are willing to pay that price for next day delivery. On the other side of the spectrum, almost 40% of Australian consumers surveyed state they would never pay extra for a premium delivery service.