Just like meeting the love of your life, shopping is increasingly moving online. Over 73% of Australian households ditched the shopping centre for digital in 2018, spending upwards of $27 billion in the space of a year. This figure is projected to reach over $35 billion in the next two years.
So, what created the surge? In a 2018 study by ASIC, they found the obvious convenience, as well as variety, sales, and innovative buy now, pay later payment options led the way, giving customers flexibility and access to purchase more in one hit without breaking the bank.
In the study, over 90% said that buy now, pay later arrangements helped them ‘manage their spending by spreading payments over time’. In particular, millennials, who now make up 44% of the Australian workforce, also accounted for the largest amount of buy now, pay later users.
With $1 out of every $3 spent on products and services by the millennial generation, it’s now more important than ever for merchants to provide an easy and seamless online experience to attract and retain customers.
The millennial generation grew up with the internet and are more tech-savvy about managing their spending. Almost 33% of millennials track their spending online, and account for over 40% of all buy now, pay later transactions.
‘Digitally savvy, millennials are a large influence on the e-commerce market. Retailers need to evolve to cater for the expectations that come with the generation that grew up with the internet.’
It’s been estimated that over $52 billion is projected to be spent over the Christmas period alone. Let’s then take a quick look at the Top 15 e-commerce trends to get your online business ahead.
1. Fashion is #1.
Walk, walk, fashion, baby! The #1 online product in Australia is fashion, where buy now, pay later remains the most popular payment option, accounting for over 48% of all purchases.
2. Millennials will account for 54% of the population by 2030.
To sell to millennials, merchants need to get what is important to them. With retail growth of $6.1 billion, this demographic represents the biggest potential market for online retailers.
3. 40% of Australian shoppers’ most recent online purchases were from China.
Globalisation across online markets means Australian e-commerce merchants need to stay innovative, with China credited as the #1 online seller through sites such as eBay, AliBaba and Wish. Now you can buy yourself that keychain from Niagara Falls.
4. There was a 30% increase in users paying with Smartphones in the last year.
In Australia, this figure moved from 2.46 million to 3.20 million amongst mobile phone shoppers in the space of a year. A more productive use of time than Angry Birds, perhaps?
5. The national average of Aussies shopping online has grown 13% year on year since 2018.
In addition, packages were delivered to over 12 million addresses across Australia in the last year. More couch time, less crowd time? Yes please.
6. There were 1.95 million BUY NOW, PAY LATER transactions in June 2018 in Australia alone.
Buy now, pay later is increasing at a rapid rate in Australia, helping businesses increase sales. Appealing to millennials for having no service fee and no interest for those who pay on time (like LatitudePay), this has grown from just over 50,000 transactions in April 2016 to almost 2 million in June 2018.
7. Aussie shoppers make more purchases online in the evening.
29% of all shoppers buy online between 7-10pm. Seems like sleeping in is good for business...
8. By 2021, over 2 million people will be buying online.
This means the e-commerce market penetration rate will reach over 85% in Australia alone. Now if only one could get that much reach on their Instagram…
9. Over 26% of shoppers use their mobile to browse and check out.
With everyone today married to their smartphones, this was no surprise, with a Year-on-Year growth of over 28%.
10. 75% of online shoppers are influenced to buy during a retail sale or promotion.
Getting in line at 6am for Boxing Day sales is now a thing of the past, with the traditional American Black Friday and Chinese Singles Day now a large part of the online sales calendar year across the world - Chinese retail giant Alibaba alone brought in over $38 billion during the retail sale. Looks like someone else can help get those white goods through the door!
11. 90% of users like using buy now, pay later.
Using buy now, pay later platforms such as LatitudePay helps customers manage their spending by spreading payments over time. With LatitudePay, customers get their purchase immediately and pay it off in 10 weekly payments, whilst merchants are paid within 2 business days.
12. Australians spend an average of 10 hours a day on their smartphones.
And over 40% of people in an Ernst and Young study said they preferred digital transactions over phone or in person.
13. Online payments are up 400% in Australia!
Australians are now making an average of 500 electronic payments a year, up from just 100 payments 20 years ago. And people say millennials aren’t productive…
14. The biggest sellers aren’t what you think.
The highest selling industries for 2019 were shapewear (set to hit over $5 billion in sales by 2022), pet grooming and athleisure. Now if only you could make high-waisted lycra underwear for cats, we’d be talking serious dough…
15. Buy now, pay later is increasing in popularity.
It’s the today way to pay. Last year, over 6% of online purchases were made through BNPL platforms, and is set to grow to 37% by 2023.
Thinking of adding in buy now, pay later for your online platform? For merchants, the set up is easy – LatitudePay handles all of this from start to finish.