5 ways Ecommerce has changed this Christmas. Are you ready?

Warehouses are filling up, last minute development requests are lodged and annual leave has gone into lockdown… It’s less than three months until Christmas!

As a retailer, you’re excited at the prospect of your most lucrative season or full of dread as you face the unknown. If you are in the latter camp, I have some good news and some bad news.

The good news is that some trends will continue. eCommerce retail share is less than 10% but continues to steal share of the retail pie. Mobile dominates screen time and is almost the dominant transaction device. Australians continue to love their marketplaces. Fulfilment in Australia remains tricky. Plan well.

Now, the bad news for those who haven’t been paying attention. There’s been big changes in the Australian eCommerce landscape over the last year. You may need to adjust your strategy for a successful Christmas. But… the good news is, you still have time to respond.

So what has changed for eCommerce retailers this Christmas?

1. Amazon has levelled up

This time last year, the retail world was in meltdown over the imminent invasion of Amazon. But they turned up as a gift carrying aunty rather than a drunk uncle. Don’t get complacent, they are growing rather than invading.

Amazon Prime in Australia

Amazon launched Prime to Australian customers in 2018. Source: amazon.com.au

Since last Christmas, Amazon have quadrupled their product range. They have branched into eight more categories, taking the category count to 26. They launched their Prime membership for Australian customers. They now offer their own fulfilment service. And they found their way into Australian homes via a myriad of Alexa devices. 2018 Amazon is very different to 2017 Amazon. But it’s not all doom and gloom…

2. Internationals have been brought back to the field

On July 1 the Australian government introduced GST on imported “low value” goods of less than $1,000. This impacts foreign eCommerce stores, Australian drop shippers and Australian-based international marketplaces. Think eBay, ASOS and Kogan… and Amazon.

International vs Domestic Spend in Australia

20% of Australian eCommerce spend was international in 2017. Source: NAB Online Sales Index – Dec 2017 (PDF)

Most retailers changed their systems to apply GST and comply. Amazon responded by geo-blocking their international site. This forced Australians down the inferior com.au offering. Whether this change has a material impact on Amazon’s local adoption is a guarded secret. Likewise, the GST impact on international eCommerce competition is not yet quantified. But in theory, it is a more level playing field this Christmas for Australian retailers.

3. Afterpay continues to soar

The “buy now, pay later” domination continues by Afterpay. In 2018 Afterpay increased their retail footprint to over 17,000 retailers. The suburban shrieks were deafening for Kmart’s announcement. Afterpay have 2.3m active users. They powered their way into the US and are raising $108m in capital for a UK expansion. It’s not all smooth sailing though. The “start up” operates at a loss and has faced criticism for being ‘predatory’ of young consumers.

Afterpay Customer Growth 2018

Afterpay’s tripled customer growth in eighteen months. Source: Afterpay FY2018 Results Presentation (PDF)

Despite this, the Australian love affair with Afterpay continues. Afterpay has changed the way a segment of the market shops. It is not just a payment option, it is a qualifier. For some, if you can’t Afterpay, you’re not a consideration. While the jury is out on the long term future for Afterpay, you can guarantee that it will be a non-negotiable for many this Christmas.

4.Cyber Week shifts spending

Boxing Day has always been our national shopping day. This tradition has shifted with the explosion of Cyber Week. Cyber week kicks off with Black Friday on November 23 and continues with Cyber Monday on November 26. Many retailers fill in the blanks to make it a week long event. 35% of Australian Christmas shopping will happen during Cyber week according to Salesforce. It represents 40% of holiday shopping in the US where it has been a tradition for decades.

Cyber Week Share per Country

Cyber Week captures 35% of Australian Christmas shopping. Source: Salesforce 2018 Holiday Predictions

Australian customers now expect and plan for participation. Such is the importance of the event, some retailers do a dual Christmas buy. They clear the initial Christmas range during Cyber Week and then launch a new range post. Whatever your strategy, prepare for Christmas to peak early!

5. Purpose has never been more important

2018 has challenged accepted norms through significant social movements. Examples include #metoo, single use plastic and customer data protection. Nike reinforced their purpose by standing behind Colin Kaepernick in their latest campaign. There was uproar. There was also “record engagement” by true fans.

Nike took a position in 2018. What do you stand for?

Retailers in Australian with strong social purpose include Cotton On, Flora & Fauna and World For Pets. Customers want to know where you stand. Do you source local? Empower minority groups? Prioritise sustainable materials? Donate to the disadvantaged? If so, it should be part of your story this Christmas. Your customers want to know. They want it to be part of their story when they gift.

2018 Christmas will be different. Optimise in response to the evolving patterns from last Christmas. Rethink your approach to capitalise on new opportunities. This is not a ‘copy and paste’ Christmas.

The turkey is on the table for those who look at it with fresh eyes. The rest get the scraps.

Seven weeks until Cyber Friday, go get ’em!

Source: https://12high.com.au/2018/10/09/5-ways-ecommerce-has-changed-this-christmas-are-you-ready/