Ecommerce Down Under: The Convenience Gap in Australia

Editor’s Note: Andy Lloyd, the general manager of NetSuite Commerce Products, recently completed a global tour, meeting with NetSuite customers, learning about their markets, their challenges and how they’re solving them. Andy will post insights from his travels from the different regions and markets.

While Australia’s economy has drawn envy in recent years from other corners of the globe, consumers and businesses down under are becoming increasingly concerned about the cooling economic conditions in Asia.  

That makes eCommerce a potentially vital channel for forward-thinking retailers in Australia. In contrast with the UK, where businesses in all sectors are generally ahead of the curve in eCommerce adoption, established Australian retailers have been skeptical of eCommerce and its value to consumers.

Historically, eCommerce has been viewed as a channel Australians use only if they’re seeking low prices, versus a specialized shopping experience or specialized product or service selections. Even today, the “convenience” light bulb hasn’t switched on for many Australian retailers. Being able to shop from anywhere for products located anywhere is a relatively new concept.

Shoppers in the US are as cost-sensitive as any people on the planet, but they rarely think of “low prices” as the primary consideration when they make purchases online. They are more likely to think “convenience” first. Consumers can purchase just about anything they need online. In fact, some items, which may not necessarily be a pressing that a consumer may take their time seeking out, are ideal candidates for an online purchase.

Take, for instance, a knife sharpener. There’s nothing urgent about the knife sharpener – the knives will still work – but eventually it will be needed and eCommerce provides an opportunity to do now, what I’m likely to delay and may even forget later. The competitive prices online are attractive, but it’s really about the convenience of the 90-second purchase that wins me over to this channel. The need doesn’t linger; I don’t have to remember it; the purchase is made and the need is fulfilled.

Despite the skepticism, a small but growing number of savvy Australian and foreign retailers are moving into this market gap and doing very well. While this online shopping activity is small, it’s accelerating rapidly, according to the National Australia Bank.

One company filling this “convenience gap” is, the homewares venture of Kitchenware Direct. The firm is working to establish itself as a leading eCommerce brand on the strength of a unique, high-value shopping experience versus positioning itself as a low-cost leader. The company is providing a well curated assortment of products that will appeal to people who want to shop online. In fact, the company plans to expand to 15 ,000 product SKUs within the next 12 months and manages all customer transactions and interactions in NetSuite, regardless of touchpoint, whether it’s the website, smartphone, social media site or telesales. and other online retailers like it are well positioned to fill in the convenience gap when customers start to make the leap.

-Andy Lloyd - GM of Commerce Products

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