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Consumer Trends in Australia
                                                                     27 September, 2011




Tony Hackett
Blog: http://www.mypublicbrand.com/
Email: tonyhackett@mypublicbrand.com
Twitter: https://twitter.com/#!/MyPublicBrand
LinkedIn: ttp://www.linkedin.com/in/mrtonyhackett
Facebook: https://www.facebook.com/mypublicbrand?sk=wall
Google+: https://plus.google.com/u/0/b/109841685099483397637/109841685099483397637/posts
Table of Contents (1/2 )
 Executive Summary                                                     4
 Consumer Behavior Of Australian Consumers- An Overview                5
 Online Pre-purchase Research                                          7
 Multichannel Behavior                                                 8
 The In-store Experience … kiosks                                      9
 Online Shopping                                                       10
 Mobile commerce                                                       11
 6 Multi-channel, Shopper Archetypes                                   12
 Busy Consumer: Implications                                           13
 The Rise of Social Media                                              15
 Social Media User Demographics                                        16
 Social Media User Segments                                            17
 Social Retailing                                                      18
 Key Findings for the Consumer Behavior for Online Retail- Australia   20
 Banking Habits                                                        22
Table of Contents(2/2)
 Marketing of Debt                                        23
 Community Attitude towards Big Banks                     24
 Consumer Behavior on Making Payments in Australia        26
 The evolution of Payment Patterns                        27
 Payments by Cards                                        28
 Shopping Behavior in Australia                           30
 Private Health Insurance in Australia- A snap shot       32
 Growth Of PayPal in Australia                            34
 PayPal-Statistics in Australia                           35
 Opportunities for PayPal                                 36
 Customer Expectations                                    38
 Key Trends for Online Retail-Australia                   39
 Online Retailers in response to Consumer's Expectation   40
 Amazon in Australia                                      42
 Some Facts Amazon                                        43
Executive Summary
•   The Report contains the consumer behaviour which

•   The consumer behaviour has evolved and they look for gaining greater value for the money spent. They
    are looking for reliable and trusted brands and they are adopting sustainable living and conscious
    purchasing practices.

•   The Social media is being capitalized in most of the sectors to attain the customer attention and expand
    their reach.

•   Facebook and Twitter are the two most reported social media platforms being used, with Facebook
    leading the way. Almost half of all retailers (48 %) said they looked to communicate with customers via
    Facebook, and 29.2 per cent have communicated with customers in 140 characters or less via Twitter
    as of 2010.

•   PayPal has seen a considerable growth in Australia. The prime concern for the user while doing an
    online purchase is the security concerns. Consumers are hesitant to share their credit card details with
    the merchant and Pay Pal solves this problem. Even the online shopping giant Amazon is looking for a
    big time expansion in Australia because of the immense potential in the eCommerce there.

•   Consumers expect secure and engaging retailing experience even while and after making a purchase
    hence retailers need to think of strategies to achieve consumer.
Consumer Behavior Of Australian Consumers-
  An Overview
       Confidence      of   Consumers
                                                                            Consumers          spending
       impacted by global economic         Consumers more inquisitive,
                                                                            extremely
       uncertainty,    rising   interest   cynical,   demanding,      and
                                                                            carefully, considering value
       rates, higher fuel prices =         unpredictable.
                                                                            for money.
       increased costs of living.




                                                                            Adopting more convenient
       Being comfortable in reliable       Seeking more engaging retail
                                                                            shopping     methods    and
       and trusted brands.                 experiences.
                                                                            channels.




       Interacting       with     other                                     Adopting sustainable living
                                           Purchasing     locally   grown
       consumers        through     new                                     and conscious purchasing
                                           and manufactured products
       forms of media.                                                      practices.


Source: www.buseco.monash.edu
Busy Consumer &
Digital Consumer
Online Pre-Purchase Research

                                                                       Those that
                                                                       spent more
                                                     Up to 50% of
                                                     Australians       than three
                                                     search online     hours
                                  Growth linked      prior to          researching
                                  to technological   purchasing in-    online (11%),
                                  advancement        store.            spent
                                  and smart-                           significantly
                 Ranked as        phone devices.     Of these 89%
                 the most                            spent up to 3     more when
                 important pre-                      hours             purchasing.
                 purchase                            researching the
                 information                         product
   Internet      source due to                       category online
   has a         „ease of                            prior to
   permanent     comparison”.                        purchase.
   role in
   consumer
   pre-
   purchase
   information
   search.
Multichannel Behaviour
Consumers increasingly engaging with brands through multiple touch points.



86% of US and UK consumers use two or more channels to search for and purchase products
(Burnett Group, 2010)



Multi-Channel consumers are more valuable!



Consumers spend up to 10 times more which generate 25 to 50% more profit, Consumers
demonstrate greater loyalty.



Different shopping channels bring distinct value at different stages of the shopping process.



Catalogues and Internet have become a popular shopping combination. 80% of shoppers browse
catalogues before ordering online.
The In-store Experience … kiosks
 Interactive, stand-alone units that enable users to ,serve themselves‟



 Minimize loss of customers to the Internet, while boosting sales and service and cutting
 operating costs within the store


 Consumer appeal due to speed, convenience and a matched flow of information on the
 Internet.


 Service kiosk transactions surpassed US$775 billion in 2009.Projected to reach US$1.3
 trillion in 2013.


 Savvy retailers going a step further by equipping staff with hand-held PDAs that give access to product
 information, capture customer feedback, enable comparisons and provide information about stock
 availability.
Online Shopping
                                                                            Some of them as per survey are:

                                                                            To get better value(68% of
Growth outpaces traditional retail    Attraction lies in immediacy and      respondents), To avoid
channels -up to 4-5 times faster.     convenience.                          crowds(65%),To avoid
                                                                            queuing(48%) , To have access to a
                                                                            wider range of products (46%).




Over 85% of the world's online
population has used the Internet to   79% of Australians shop online,83%    Australian   online     sales   reached
make a purchase -up 40% from two      will do so in the next year.          $18.6 billion in 2009
years ago.




                                      It is forecasted to reach $23.4
                                      billion by 2014 (IBIS World, 2010).
Mobile commerce


                                                                                                 In 2009, more than 25% of
                                                                                                 Australians            accessed
                                                             1.2 billion people globally         mobile       Internet.25%    use
                                                             will use mobile commerce            mobile banking and 12%
Mobile    phones,      smart                                 applications by the end of          order          goods         and
                               They provide opportunity to
phones       and       PDAs                                  2012.     Australian       mobile   services,41% users look for
                               merge mobility, the web and
increasingly help customers                                  market     was     worth     $3.3   information on products and
                               stores.
perform daily tasks.                                         million   in   2008;   and     is   services.36%        look     for
                                                             anticipated to reach $4.1           suppliers of products and
                                                             million by 2013.                    services. Over 60% would
                                                                                                 like    to    purchase      more
                                                                                                 through their mobile phone.




 Source: www.salmat.com.au
6 Multi-channel,Shopper Archetypes

                                         „Strategic Savers‟
                   „Efficient
                                         ‐greatest level of
                   Sprinters‟‐don't
                                         research, emphas
                   enjoy          the
                                         is on finding the
                   shopping
                                         best price (29%)
                   process,
                   functional
                   shoppers (13%).


        „Dollar                                    „Quality Devotees‟
        Defaulters‟‐diseng                         ‐focus           on
        aged, use price to                         quality, loyal to
        make quick brand                           the brands that
        decisions (13%)                            deliver it (16%)

                   „Savvy               „Opportunistic
                   Passionistas‟‐w      Adventurers‟‐love
                   ho          enjoy    to shop and enjoy
                   shopping, have       the    thrill    of
                   emotional            hunting         for
                   connections    to    bargains       and
                   the     shopping     great deals (15%)
                   experience (14%)
Busy Consumer: Implications

Cost effective convenience is a major consumer concern.




These days it is addressed by the retail offer, from store layout to product design and
packaging. Consumers are seeking multiple shopping channels to streamline and simplify
shopping.



However, Inconsistencies across channels can result in lost customers and revenue, while
positive experiences can deliver customer loyalty and profit.


Mobile phones is a fast growing channel. There has been a rapid growth in online shopping;
61% of consumers say retailers need to offer more flexible online services. Consumers pre-
purchase research online means information on the Internet must be relevant, up to date and
easily accessible.
Digital Consumers
The Rise of Social Media
                                        Shift from mass media to
   67% are more likely to               social media, social media       86% of Australian Internet
   purchase more based on               can take many forms.             shoppers      look    to   fellow
   recommendations           from                                        Internet users for opinions
   people in a community in                                              and       information      about
   which         they     actively                                       products,      services      and
   participate                                                           brands


 73% agree "people like me"
                                                                             46%       value        product
 are   the       most   trusted
                                                                             recommendations           from
 sources when making a
                                                                             friends
 purchase




             74% are influenced by the                           85% share information about
             opinions of others in making                        their purchases with people
             buying decisions,                                   they know
Implications for
Retailers
Social Media User Demographics
                                      Although    a    core
                Women aged over       group,     not   only
                55 are the fastest    young
                growing               consumers...
                demographic!




       7% aged 13 to 17                          36% aged 35 to 54
       years                                     years




                16% aged 18 to 24 34% aged 25 to 34
                years                years
Social Media User Segments
Creators 13%
• Publish Webpage
• Publish or maintain Blog
• Upload video or sites like YouTube




        Critics 19%
        Comment on Blogs
        • Post Ratings & Reviews




                 Collectors 15%
                 • Use RSS
                 • Tag Web Pages




                         Joiners
                         •Use Social networking Sites
Social Retailing
           “Shopping meets social networks ”.
           Following are the observations from ForeSee Results 2010 Social
           Media Report of (US),:



           56% of shoppers who interact with social media websites have elected to “friend” or
           “follow” or “subscribe” to a retailer.

           More than 50% of online shoppers use Facebook, and of those online shoppers who
           engage in social media, more than 80% use Facebook. 49% of respondents who “friend”
           or “follow” companies through social media do so to learn about special deals and
           options ,45% of users do it to learn about products,5% use social media primarily for
           customer support.

           However, 60% of retailers do not have a presence on a social networks…85% of Gen Y
           shoppers participate in social networking (Price Grabber, 2010)
Findings for the Consumer Behaviour for Online
   Retail- Australia
                               Consumers
                               expect
                               retailers    to
                               interact with
                               them with a                       Consumers
Consumer                       consistent                        are spending                     Satisfaction
behavior is                    message                           more     time                    is the key
changing...                    across     the                    researching                      driver      of
faster than it                 full breadth                      their                            brand
ever has.                      of media                          purchases                        loyalty.




                 Multi-                          consumers                       Catalogue
                 channel                         are seeking                     &online are
                 outperforms                     more                            the dominant
                 single-                         engaging                        research
                 channel                         experiences                     tool, reviews
                 every time                      (both in and                    and ratings
                                                 out of store)                   are the most
                                                                                 trusted
                                                                                 source      of
                                                                                 information.
Banking Habits- Research Data of 2010
•   The nature and structure of the banking sector depends to a large
    degree on the individual decisions of millions of Australians about
                                                                             Banking                  18-34       35-54         55+         Total
    which institutions to trust with their financial affairs.
                                                                             Institutions/Age
•   The information presented beside is drawn from a survey of 1,360
                                                                             One of the big 4        76.4 %       71.7%       60.8%         69.6
    adults conducted by The Australia Institute in March 2010.
                                                                             banks
•   As Table 1 shows, survey respondents reflected the profile of the
                                                                             Another Bank            14.8%        13.8%       13.8%         14.1%
    retail banking market, with most respondents (70 %) saying they did
    most of their banking with one of the big four banks. 14% reported       A Credit Union           6.8%        13.3%       24.1%         14.8%
    using another bank, while another 15 % banked with a credit union.
                                                                             Other                    1.9%        1.2%         1.4%         1.5%
    Younger people (76 %of 18 to 24 year olds) were more likely to bank
    with one of the big four than older people (61 % of those over 55        Total                    100%        100%        100 %         100%
    years).

•   Respondents who banked with one of the big four were asked                  Base = 1,360 Respondents
    whether they had ever considered switching to another bank (not
    one of the big four) or a credit union. Roughly half (49 %) had
    considered switching to another bank, while 41 % had considered
    switching to a credit union; together, 57 % had considered switching
    to one or the other. Viewed another way, fully 43 % of people          Source: Research by The Australia Institute 2010 by Josh Fear,
                                                                           Richard Denniss and David Richardson
    banking with one of the big four have never considered switching to
    a smaller bank or credit union.
Marketing of Debt


As per the survey, 2 in 3 respondents (66
%) reported receiving an unsolicited offer                                                        While people on higher incomes were more
for a new credit card in the past 12         Such unsolicited offers, which can come              likely to receive such offers, the marketing
months, while one in       two (49 %) had    by post, by email, in a bank branch and              of debt among people on low incomes is
received an unsolicited offer to increase    even in a public place such as a shopping            clearly widespread. For example, one in
their credit card limit.                     centre, were by no means restricted to               three people in low-income households had

36 % had received an offer for a personal    those on substantial incomes.                        received an offer of a personal loan in the

loan, and 18 % had an offer to increase                                                           past year without seeking one out.

the available credit on their home loan.




                                                               Source: Research by The Australia Institute 2010 & Reserve Bank of Australia
Community Attitude towards Big Banks
Survey findings indicate that most Australians do not believe that the highly concentrated structure of the banking market is desirable. 72
% agreed that the big four banks in Australia have too much market power, while only 13 % disagreed. People who did their banking with
a smaller bank or credit union were more likely to believe that the big four have too much market power.




The survey also asked respondents for their views on whether its profits affect how „safe‟ a bank is. 19 % said that it is safer to deposit
money with a bank with bigger profits, while 4 % said that a bank with smaller profits is safer. Most respondents (=67 % said neither—
profits make no difference to how safe a bank is.




Younger people were much more likely to believe that a bank with big profits is safer. People who banked with one of the big four were
also more likely to hold this view, suggesting that perceived „safety‟ is a factor in their choice of financial institution.




Among those who banked with one of the big four, respondents who had never considered switching to a smaller bank or credit union
were more likely to believe that bigger profits equal more safety than those who had considered switching. Around a quarter of big-four
customers apparently do not interpret recent bank profits as evidence of overcharging; on the contrary, they see such profits as evidence
they have chosen a „safe‟ bank for their funds.


                                                                              Source: Research by The Australia Institute 2010
Consumer behaviour towards the Mode of Payment
Consumer Behaviour on Making Payments in
 Australia
                                                Transactions up to $50 accounted for around
                                                three-quarters of the number of payments in
                                                2010, but only one-fifth of the value of
                                                payments. By contrast, only 0.1 % of
                                                transactions were more than $5 000, but they
                                                accounted for more than one-fifth of the
                                                value of payments.

                                                Given this, it is not surprising that cash
                                                continues to be the most widely used
                                                payment method in Australia, accounting for
                                                62 % of all payments made by Australian
                                                consumers.

                                                Cards are the dominant payment method
                                                used for mid-sized transactions and are the
                                                second most frequently used payment
                                                method       for    all   payments.     BPAY,
                                                internet/telephone banking and cheque are
                                                important payment methods for higher-value
                                                transactions (particularly those above $500),
                                                although       these    payment      methods
                                                collectively account for less than 10 per cent
                                                of the number of payments.




Roy Morgan Research in December and November 2010
The evolution of Payment Patterns
                                                              Card payments are responsible for the bulk of this shift
                                                              away from using cash for low-value payments: card
                                                              payments accounted for around 24 per cent of payments
Although the broad patterns                                   under $50 in 2010, up from 19 per cent in 2007. To a
of payment behavior have                                      lesser extent there has also been some substitution to
remained unchanged, the                                       other electronic forms of payment, such as BPAY; the
use of different payment                                      industry with the largest decline in cash use was
methods has evolved to                                        household bills, where „paperless‟ billing, which
some degree in the period                                     encourages electronic payment, has been promoted
between surveys.                                              increasingly in recent years.




                              Most noticeably, the relative
                              use of cash declined.
                              Although the average use
                              of cash actually increased
                              slightly between survey
                              periods, the increase was
                              less than for other payment
                              methods .Therefore, the
                              share of cash use in the
                              total number of payments
                              decreased from 70 % in
                              2007 to 64 % in 2010 .

 Roy Morgan Research in December and November 2010
Payments by Cards

                                                                              By contrast, growth in the use of
                                                                              credit cards has been subdued
                                                                              over the past three years. One
                                                                              reason for this preference for        However,      consumers       have
As per the Survey there has been
                                                                              debit cards may be the increased      become better at avoiding credit
relative decline in cash use. The   Within debit cards, growth was
                                                                              prevalence   of   surcharging   on    card surcharges, in part by using
average        number   of   card   particularly strong for payments
                                                                              credit card transactions between      payment methods that do not
payments        made    by   each   on MasterCard/Visa debit cards.
                                                                              survey periods.                       attract surcharges. Indeed, the
respondent in a week increased      This    likely reflects    the   wider
                                                                              The Reserve Bank first introduced     proportion of payments on which
from around 3.5 payments to 4.8     issuance of these cards by the
                                                                              reforms to remove surcharging         consumers     actually    paid    a
payments. This was largely driven   major    banks     in     the    period
                                                                              restrictions in 2003, leading to a    surcharge    remained      virtually
by strong growth in the use of      following the first survey.
                                                                              steady increase in surcharging by     unchanged between the studies,
debit cards.
                                                                              merchants over time. This has         at around 5 per cent.
                                                                              resulted in a greater prevalence of
                                                                              surcharging merchants in 2010,
                                                                              compared with 2007.




 Roy Morgan Research in December and November 2010
Shopping Behaviour in Australia
Shopping Behaviour in Australia
     Australian Shoppers, especially those aged under 30 and with a credit card, are sending $4.2 billion a year
     to overseas online retailers, robbing local bricks-and-mortar shops of business.




     On the consumer side, bank surveys have shown that this trend is facilitated mainly by two important
     developments. First is the enhanced security of online payments. A recent PayPal survey reports that in the
     early days, 95 % of internet shoppers expressed strong reservations about the safety of online transactions.
     More advanced payment technologies have, however, recently increased consumer confidence in making
     online purchases. Second is access to credit cards and other forms of online payment. Research shows that
     more than half of internet sales are finalized using credit cards.



     In the economic literature, there are formal models of consumption behavior that have been used to explain
     this trend towards increased internet consumption. First of these is the Transaction Cost Economic (TCE)
     model, which basically says that a transaction subject will choose one form of transaction channel instead of
     others because of lower transaction costs. Applied to internet shopping, which is essentially a choice
     between the internet and traditional stores, consumers are thought to choose the internet channel because
     of the lower transaction costs. Lower transaction costs necessarily includes the money costs of the good or
     service purchased but also refers to convenience gained by the purchaser in the process.



     The second model is the standard economic model of competition, and clearly complements the TCE
     explanation. The internet acts mainly as a mechanism that reduces consumers' costs of acquiring
     information about products and prices. Before the online age, someone looking to buy a fridge, say, might
     have gone into one or two local shops — and perhaps rung a few more — to compare prices. The web,
     however, makes it easy to gather more information.

Source: education.theage.com.au/cmspage.php?intid=152
Health Insurance-Some
Insights
Private Health Insurance in Australia- A snap shot
                                                          Private health insurance plays an important part in delivering
                                                          Australians access to world-class care. Last year private health funds
                                                          paid $12.4 billion in benefits towards the healthcare of the 11.7
                                                          million Australians with private health cover.

                                                          By proposing to means-test the 30% Rebate, the Minister for Health
                                                          and Ageing will make healthcare less affordable for all
                                                          Australians, and by her own admission, add more pressure to our
                                                          public hospitals.
                                                          The Minister‟s press release of today fails to point out that the
                                                          estimates of the effect of the Medicare Levy Surcharge changes on
                                                          private health membership were based on the original 2008 Budget
                                                          proposal, which was altered significantly in the Senate in October
                                                          2008.

                                                          The Minister herself at the time of the altered legislation passing said
                                                          “the projection of the number of people from Treasury that will drop
                                                          out of health insurance is just under half a million, 492,000 people”.

                                                          The Minister is being deliberately misleading in what she is choosing
                                                          to tell Australian health consumers about those changes then and
                                                          what will happen to our health system if the means-testing legislation
                                                          is approved by the Parliament.




 www.ahia.org.au/news/media_releases/“no-minister of May 2011
PayPal-Growth in
Australian market
Growth Of PayPal in Australia
         PayPal in Australia has over 3 Million active users and over 30,000 Australian businesses as of 2010 now using
         PayPal as a secure way to send and receive money online. PayPal is capitalizing on the growing Australian
         eCommerce market with the number of customer registrations growing more than 25% in the last calendar year.


         The total payment volume for PayPal in 2009 was almost US$2 billion, an increase of 32 per cent from 2008,
         demonstrating rapid growth as consumers and businesses seek fast, safe and secure ways to shop online.


         In addition to domestic growth, PayPal has enjoyed a growth in cross border sales. The recent rise in the
         Australian dollar has brought about a year on year increase of 32 % in cross border payments as
         Australians seek bargains and choice from overseas, and take advantage of the strong dollar.

         Conversely, PayPal opens the door to Australian businesses seeking opportunities to sell products or
         services to overseas markets. With more than 84 million active accounts in 190 markets and 24
         currencies, PayPal enables global eCommerce.


         Jonathan Reid, Director, MyCatwalk.com, an online Aussie fashion boutique and PayPal merchant commented:
         "Building revenue from overseas is critical to our business and PayPal has definitely helped us to grow our business
         abroad.

         Over the past 5 years, several factors have been responsible for the slower uptake of    e-tail amongst Australian
         consumers. While the cost of shipping, long delivery times and uncertainty around returns policies have prevented
         some consumers from shopping online, concerns around the security of transactions remains the top concern to
         consumers shopping online today.

         James Stevens, CEO and Founder, Roses Only, one of Pay Pal's first merchant partners in Australia, commented:
         "We integrated PayPal the minute it was available in Australia. Delivering a gifting service, it is critical that our
         customers feel confident that their payment is secure.


Source: http://www.paypal-education.com.au/media/news_22042010.html
PayPal-Statistics in Australia
                            Approximately      50%    of   PayPal's
                            Australian transactions are related to              PayPal is fast growing and some of
                            eBay purchases.                                     the compelling reasons are:

                            "Travel    sites   have    very    much             It provides a way of paying without
                            benefited from PayPal," said Frerk-                 sharing credit card details with the
                            Malte Feller, Managing Director of                  vendor (even if the payment is
                            PayPal Australia, for example by                    actually coming from a credit card),
                            making it easier for people to book                 reducing the security exposure.
                            from overseas.




                                                                                While consumers are more than
                                                                                ready for e-commerce, but retailers
                                                                                have lagged. The range of goods
                            It is simply easier to make a PayPal
                                                                                available is not very impressive
                            transaction than it is to enter a 16-digit
                                                                                (where are the fashion, house and
                            card number, expiry date, security
                                                                                garden,    and    sports   goods?     he
                            code and cardholder's name.
                                                                                pondered), "and the prices aren't
                                                                                very   attractive"   especially     when
                                                                                shipping is extra.



Source: http://www.itwire.com/it-industry-news/development/38516-paypal-australia-sees-growth-in-mobility?start=1
Opportunities for PayPal
                                                                The PayPal report, which was conducted by Forrester Research and
                                                                Leading Edge, reveals that despite Australians' slow approach to
 The other area showing promise for PayPal                      eCommerce, online retail is a booming market with turnover expected
 is mobile transactions. The company has                        to reach $36.81 billion per annum by 2013.
 provides an API allowing developers to
 embed payments into apps for the iPhone,                                                         Travel and groceries remain the largest two
 Blackberry, Android and other platforms,                                                         online markets, taking up $4.9 billion this year,
 and Feller thinks this will be used in ways                                                      followed       by       appliances      and      home
 "we haven't imagined yet.                                                                        improvement, set to reach $2.6 billion this
                                                                                                  year. Other major categories include computer
                                                                                                  tech at $2.5 billion and apparel at $1.4 billion.
 In fact, 38% of respondents said competition
                                                                                                  (2009)
 from low-cost online retailers would be the
 biggest threat to profitability, especially
 those overseas. A separate 32% claimed a
                                                                                             PayPal      also     warns      that      dedicated
 lack of skilled staff will hurt, followed by 25%
                                                                                             eCommerce          stores     and      Multichannel
 who claimed the price and performance of
                                                                                             retailers are suffering from some big issues
 marketing would be harmful. About 20%
                                                                                             including the high price of postage and
 said logistics and delivery issues would hurt
                                                                                             content management, resulting in lower
 profitability.
                                                                                             inventories than bricks-and-mortar stores.

Source: http://www.mypaymentsolutions.com/2010/11/online-retailers-urged-fix-logistics-problems-australian-ecommerce/ &
http://www.itwire.com/it-industry-news/development/38516-paypal-australia-sees-growth-in-mobility?start=2
Retailing-Some Facts & Strategies
Customer Expectations
Retailers want their brand name to engender positive feelings among the general public. In a crowded, competitive
and increasingly global market place, differentiation is becoming vital.


Across the study the quality of customer service is highlighted as a driver of customers that does not focus on price,
closely followed by after purchase service. Store location and in-store merchandising are also recognized as having
significant impact.


“Customer service is critical as customers return as they know they will be given one-on-one help compared to that
of other stores.” one retailer said.


Facebook and Twitter are the two most reported social media platforms being used, with Facebook leading the way.
Almost half of all retailers (48 %) said they looked to communicate with customers via Facebook, and 29.2 per cent
have communicated with customers in 140 characters or less via Twitter.

Customers rate their retailing experience on certain parameters. They are: Quality of Customer Service while
purchase, Quality of Customer Service after sales, Store location, In-store merchandising and other displays, Store
design and fit-out, Window display .

Source: http://www.businessofretail.com.au/2011_Report/public/pdf/2011_report.pdf
Key Trends for Online Retail-Australia

                                                               The biggest one by
                                                               far is the growth of
                                                               mobiles,          for
                                                               accessing        the
                                                               internet and buying
                                                               products.




                                        The second is the
                                        use     of    social
                                        media, so people
                                        referring to friends
                                        and family when
                                        talking        about
                                        brands           and              The third is the integration of
                                        products."                        digital into traditional
                                                                          retailing. So things like
                                                                          interactive store
                                                                          experiences, bringing
                                                                          technology into the
                                                                          traditional retailing
                                                                          environment




Source: fetchoscaraccessories.bigcartel.com/why-shop-online
Online Retailers response to Consumer's Expectation
 Retailers need to make efforts in order to bring many customers online. They also need to enhance the shopping
 experience of customers. There are certain areas where the retailers and online marketers need to focus. They are:




 The confidence between a consumer and an online site has to be built. One needs to give consumers the confidence
 to buy online when they can't touch the product or can't see it.“Eg usage of high quality photos, making sure the retail
 experience is a high value experience.




 Online retailers need to start filling their sites with ways to communicate with friends and family through social
 networks. One needs to be offering the possibility to rate and review products, and consumers should be allowed to
 share your products on social networks.




 The third and final piece of advice is around convenience, which feeds back into the growth mobiles and smart
 phones. "You need to allow that people can buy your products anywhere, at any time," Stephen Foxworthy says. This
 is especially important given the dollar is now at parity and people are looking at buying overseas.

Source: Forrester Research and Leading Edge, Comments by Reactive strategy director Stephen Foxworthy
http://www.smarttechnology.com.au/blog20101125ecommerce-sales-heads-27-billion-2010
Amazon in Australia
   As online sales soar in Australia, US operator Amazon                  says that their
   Australian business has increased "significantly" in 2010 has reported a
   51% increase in sales to $9.91 billion.



       On the downside, profits fell 8 percent to $191 million in the second
       quarter due to additional investments in infrastructure.


               Amazon did not give specific details about sales of its Kindle e-readers in
               Australia, but Amazon CEO Jeff Bezos did say the $139 Kindle 3G version
               with Special Offers - a version of the Kindle released during the quarter
               that is subsidized with ads - is now its top-selling Kindle device.


                       Jeff Bezos said that "low prices, expanding selection and innovation"
                       drove the company's second-quarter growth.


                            This growth means Amazon must keep investing in operations expansions and
                            upgrades along with moves into overseas countries like Australia and India, in order
                            to support the proliferation of its online retail business. to rise. Overall, operating
                            expenses rose 54 % to $9.71 billion.


Source: http://www.smarthouse.com.au/iPods_And_Portable_Players/Industry/K5G9B2X7
Some Facts -Amazon


                                                                                                               Amazon. COM has also
                                                                           Customers have been taking
                                                                                                               completely turned around the
                                                                           unfair advantage of the
                                                                                                               fashion purveyor, by setting
                                                                           strong Australian dollar and
                                                                                                               up     a    members     only
  Online shopping giant Amazon.           As the materials are shipped     have directed themselves
                                                                                                               website, Myhabit.com which
  Com has decided to expand into          in Australia from other          towards online shopping.
                                                                                                               offers to its customers
  Australia. Amazon‟s web services        countries, buyers in Australia   This in turn has an adverse
                                                                                                               international brands such as
  are ready to start operating from       have to pay a little extra.      effect on the local retailers. In
                                                                                                               Dolce and Gabana. A lot of
  a local data centre by early next       However, many complaints         the month of July Amazon.
                                                                                                               the products purchased via
  year to meet the needs of               have    not    been     made     COM has also taken over
                                                                                                               Myhabit.com are available on
  enterprise    and    government         regarding this due to the        Britain‟s Book Depository,
                                                                                                               a 60% discount, the website
  clients.                                strong domestic currency.        which is really popular
                                                                                                               offers shipping and delivery
                                                                           amongst Australian book
                                                                                                               in more than 50 countries
                                                                           lovers      as     it     offers
                                                                                                               including Australia for only
                                                                           considerably lower .
                                                                                                               USD 15 flat rate




Source: thecourierpigeon.com.au/amazon-coming-to-australia/852198/
Bibliography

1. The Research facts by Australian Centre for
   Research Studies-2010.
2. Retail World Management & Technology.
3. Online Retailer
4. CeBIT Australia.
5. Nielsen.
6. eTail2010
7. Reserve Bank of Australia.
8. Australia Institute Research Facts-2010
9. Forrester Research and Leading Edge
10.Smart Technology Australia
11.www.businessofretail.com
Disclaimer

   “The information contained in this document that includes text, graphics and links, are provided on an
        “as-is”, "with all faults" and "as available" basis and are without warranty of any kind. While I depend
        on sources that are believed to be reliable, it cannot rule out errors in judgment or application. The
        document is intended for “information” and “general guidance” purposes only.”
   “Investment decisions and/or other decisions based on the conclusions and potential strategies
        mentioned in the document are not necessarily endorsed by My Public Brand Inc. My Public Brand
        Inc does not represent or warrant that the information provided is accurate, complete or current and
        will not be held liable for any damages of any kind arising from the use of this information.”
Consumer Trends in Australia
                                                                     September 27th, 2011




Tony Hackett
Blog: http://www.mypublicbrand.com/
Email: tonyhackett@mypublicbrand.com
Twitter: https://twitter.com/#!/MyPublicBrand
LinkedIn: ttp://www.linkedin.com/in/mrtonyhackett
Facebook: https://www.facebook.com/mypublicbrand?sk=wall
Google+: https://plus.google.com/u/0/b/109841685099483397637/109841685099483397637/posts

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Consumer Trends in Australia - Tony Hackett (www.mypublicbrand.com)

  • 1. Consumer Trends in Australia 27 September, 2011 Tony Hackett Blog: http://www.mypublicbrand.com/ Email: tonyhackett@mypublicbrand.com Twitter: https://twitter.com/#!/MyPublicBrand LinkedIn: ttp://www.linkedin.com/in/mrtonyhackett Facebook: https://www.facebook.com/mypublicbrand?sk=wall Google+: https://plus.google.com/u/0/b/109841685099483397637/109841685099483397637/posts
  • 2. Table of Contents (1/2 )  Executive Summary 4  Consumer Behavior Of Australian Consumers- An Overview 5  Online Pre-purchase Research 7  Multichannel Behavior 8  The In-store Experience … kiosks 9  Online Shopping 10  Mobile commerce 11  6 Multi-channel, Shopper Archetypes 12  Busy Consumer: Implications 13  The Rise of Social Media 15  Social Media User Demographics 16  Social Media User Segments 17  Social Retailing 18  Key Findings for the Consumer Behavior for Online Retail- Australia 20  Banking Habits 22
  • 3. Table of Contents(2/2)  Marketing of Debt 23  Community Attitude towards Big Banks 24  Consumer Behavior on Making Payments in Australia 26  The evolution of Payment Patterns 27  Payments by Cards 28  Shopping Behavior in Australia 30  Private Health Insurance in Australia- A snap shot 32  Growth Of PayPal in Australia 34  PayPal-Statistics in Australia 35  Opportunities for PayPal 36  Customer Expectations 38  Key Trends for Online Retail-Australia 39  Online Retailers in response to Consumer's Expectation 40  Amazon in Australia 42  Some Facts Amazon 43
  • 4. Executive Summary • The Report contains the consumer behaviour which • The consumer behaviour has evolved and they look for gaining greater value for the money spent. They are looking for reliable and trusted brands and they are adopting sustainable living and conscious purchasing practices. • The Social media is being capitalized in most of the sectors to attain the customer attention and expand their reach. • Facebook and Twitter are the two most reported social media platforms being used, with Facebook leading the way. Almost half of all retailers (48 %) said they looked to communicate with customers via Facebook, and 29.2 per cent have communicated with customers in 140 characters or less via Twitter as of 2010. • PayPal has seen a considerable growth in Australia. The prime concern for the user while doing an online purchase is the security concerns. Consumers are hesitant to share their credit card details with the merchant and Pay Pal solves this problem. Even the online shopping giant Amazon is looking for a big time expansion in Australia because of the immense potential in the eCommerce there. • Consumers expect secure and engaging retailing experience even while and after making a purchase hence retailers need to think of strategies to achieve consumer.
  • 5. Consumer Behavior Of Australian Consumers- An Overview Confidence of Consumers Consumers spending impacted by global economic Consumers more inquisitive, extremely uncertainty, rising interest cynical, demanding, and carefully, considering value rates, higher fuel prices = unpredictable. for money. increased costs of living. Adopting more convenient Being comfortable in reliable Seeking more engaging retail shopping methods and and trusted brands. experiences. channels. Interacting with other Adopting sustainable living Purchasing locally grown consumers through new and conscious purchasing and manufactured products forms of media. practices. Source: www.buseco.monash.edu
  • 7. Online Pre-Purchase Research Those that spent more Up to 50% of Australians than three search online hours Growth linked prior to researching to technological purchasing in- online (11%), advancement store. spent and smart- significantly Ranked as phone devices. Of these 89% the most spent up to 3 more when important pre- hours purchasing. purchase researching the information product Internet source due to category online has a „ease of prior to permanent comparison”. purchase. role in consumer pre- purchase information search.
  • 8. Multichannel Behaviour Consumers increasingly engaging with brands through multiple touch points. 86% of US and UK consumers use two or more channels to search for and purchase products (Burnett Group, 2010) Multi-Channel consumers are more valuable! Consumers spend up to 10 times more which generate 25 to 50% more profit, Consumers demonstrate greater loyalty. Different shopping channels bring distinct value at different stages of the shopping process. Catalogues and Internet have become a popular shopping combination. 80% of shoppers browse catalogues before ordering online.
  • 9. The In-store Experience … kiosks Interactive, stand-alone units that enable users to ,serve themselves‟ Minimize loss of customers to the Internet, while boosting sales and service and cutting operating costs within the store Consumer appeal due to speed, convenience and a matched flow of information on the Internet. Service kiosk transactions surpassed US$775 billion in 2009.Projected to reach US$1.3 trillion in 2013. Savvy retailers going a step further by equipping staff with hand-held PDAs that give access to product information, capture customer feedback, enable comparisons and provide information about stock availability.
  • 10. Online Shopping Some of them as per survey are: To get better value(68% of Growth outpaces traditional retail Attraction lies in immediacy and respondents), To avoid channels -up to 4-5 times faster. convenience. crowds(65%),To avoid queuing(48%) , To have access to a wider range of products (46%). Over 85% of the world's online population has used the Internet to 79% of Australians shop online,83% Australian online sales reached make a purchase -up 40% from two will do so in the next year. $18.6 billion in 2009 years ago. It is forecasted to reach $23.4 billion by 2014 (IBIS World, 2010).
  • 11. Mobile commerce In 2009, more than 25% of Australians accessed 1.2 billion people globally mobile Internet.25% use will use mobile commerce mobile banking and 12% Mobile phones, smart applications by the end of order goods and They provide opportunity to phones and PDAs 2012. Australian mobile services,41% users look for merge mobility, the web and increasingly help customers market was worth $3.3 information on products and stores. perform daily tasks. million in 2008; and is services.36% look for anticipated to reach $4.1 suppliers of products and million by 2013. services. Over 60% would like to purchase more through their mobile phone. Source: www.salmat.com.au
  • 12. 6 Multi-channel,Shopper Archetypes „Strategic Savers‟ „Efficient ‐greatest level of Sprinters‟‐don't research, emphas enjoy the is on finding the shopping best price (29%) process, functional shoppers (13%). „Dollar „Quality Devotees‟ Defaulters‟‐diseng ‐focus on aged, use price to quality, loyal to make quick brand the brands that decisions (13%) deliver it (16%) „Savvy „Opportunistic Passionistas‟‐w Adventurers‟‐love ho enjoy to shop and enjoy shopping, have the thrill of emotional hunting for connections to bargains and the shopping great deals (15%) experience (14%)
  • 13. Busy Consumer: Implications Cost effective convenience is a major consumer concern. These days it is addressed by the retail offer, from store layout to product design and packaging. Consumers are seeking multiple shopping channels to streamline and simplify shopping. However, Inconsistencies across channels can result in lost customers and revenue, while positive experiences can deliver customer loyalty and profit. Mobile phones is a fast growing channel. There has been a rapid growth in online shopping; 61% of consumers say retailers need to offer more flexible online services. Consumers pre- purchase research online means information on the Internet must be relevant, up to date and easily accessible.
  • 15. The Rise of Social Media Shift from mass media to 67% are more likely to social media, social media 86% of Australian Internet purchase more based on can take many forms. shoppers look to fellow recommendations from Internet users for opinions people in a community in and information about which they actively products, services and participate brands 73% agree "people like me" 46% value product are the most trusted recommendations from sources when making a friends purchase 74% are influenced by the 85% share information about opinions of others in making their purchases with people buying decisions, they know
  • 17. Social Media User Demographics Although a core Women aged over group, not only 55 are the fastest young growing consumers... demographic! 7% aged 13 to 17 36% aged 35 to 54 years years 16% aged 18 to 24 34% aged 25 to 34 years years
  • 18. Social Media User Segments Creators 13% • Publish Webpage • Publish or maintain Blog • Upload video or sites like YouTube Critics 19% Comment on Blogs • Post Ratings & Reviews Collectors 15% • Use RSS • Tag Web Pages Joiners •Use Social networking Sites
  • 19. Social Retailing “Shopping meets social networks ”. Following are the observations from ForeSee Results 2010 Social Media Report of (US),: 56% of shoppers who interact with social media websites have elected to “friend” or “follow” or “subscribe” to a retailer. More than 50% of online shoppers use Facebook, and of those online shoppers who engage in social media, more than 80% use Facebook. 49% of respondents who “friend” or “follow” companies through social media do so to learn about special deals and options ,45% of users do it to learn about products,5% use social media primarily for customer support. However, 60% of retailers do not have a presence on a social networks…85% of Gen Y shoppers participate in social networking (Price Grabber, 2010)
  • 20. Findings for the Consumer Behaviour for Online Retail- Australia Consumers expect retailers to interact with them with a Consumers Consumer consistent are spending Satisfaction behavior is message more time is the key changing... across the researching driver of faster than it full breadth their brand ever has. of media purchases loyalty. Multi- consumers Catalogue channel are seeking &online are outperforms more the dominant single- engaging research channel experiences tool, reviews every time (both in and and ratings out of store) are the most trusted source of information.
  • 21.
  • 22. Banking Habits- Research Data of 2010 • The nature and structure of the banking sector depends to a large degree on the individual decisions of millions of Australians about Banking 18-34 35-54 55+ Total which institutions to trust with their financial affairs. Institutions/Age • The information presented beside is drawn from a survey of 1,360 One of the big 4 76.4 % 71.7% 60.8% 69.6 adults conducted by The Australia Institute in March 2010. banks • As Table 1 shows, survey respondents reflected the profile of the Another Bank 14.8% 13.8% 13.8% 14.1% retail banking market, with most respondents (70 %) saying they did most of their banking with one of the big four banks. 14% reported A Credit Union 6.8% 13.3% 24.1% 14.8% using another bank, while another 15 % banked with a credit union. Other 1.9% 1.2% 1.4% 1.5% Younger people (76 %of 18 to 24 year olds) were more likely to bank with one of the big four than older people (61 % of those over 55 Total 100% 100% 100 % 100% years). • Respondents who banked with one of the big four were asked Base = 1,360 Respondents whether they had ever considered switching to another bank (not one of the big four) or a credit union. Roughly half (49 %) had considered switching to another bank, while 41 % had considered switching to a credit union; together, 57 % had considered switching to one or the other. Viewed another way, fully 43 % of people Source: Research by The Australia Institute 2010 by Josh Fear, Richard Denniss and David Richardson banking with one of the big four have never considered switching to a smaller bank or credit union.
  • 23. Marketing of Debt As per the survey, 2 in 3 respondents (66 %) reported receiving an unsolicited offer While people on higher incomes were more for a new credit card in the past 12 Such unsolicited offers, which can come likely to receive such offers, the marketing months, while one in two (49 %) had by post, by email, in a bank branch and of debt among people on low incomes is received an unsolicited offer to increase even in a public place such as a shopping clearly widespread. For example, one in their credit card limit. centre, were by no means restricted to three people in low-income households had 36 % had received an offer for a personal those on substantial incomes. received an offer of a personal loan in the loan, and 18 % had an offer to increase past year without seeking one out. the available credit on their home loan. Source: Research by The Australia Institute 2010 & Reserve Bank of Australia
  • 24. Community Attitude towards Big Banks Survey findings indicate that most Australians do not believe that the highly concentrated structure of the banking market is desirable. 72 % agreed that the big four banks in Australia have too much market power, while only 13 % disagreed. People who did their banking with a smaller bank or credit union were more likely to believe that the big four have too much market power. The survey also asked respondents for their views on whether its profits affect how „safe‟ a bank is. 19 % said that it is safer to deposit money with a bank with bigger profits, while 4 % said that a bank with smaller profits is safer. Most respondents (=67 % said neither— profits make no difference to how safe a bank is. Younger people were much more likely to believe that a bank with big profits is safer. People who banked with one of the big four were also more likely to hold this view, suggesting that perceived „safety‟ is a factor in their choice of financial institution. Among those who banked with one of the big four, respondents who had never considered switching to a smaller bank or credit union were more likely to believe that bigger profits equal more safety than those who had considered switching. Around a quarter of big-four customers apparently do not interpret recent bank profits as evidence of overcharging; on the contrary, they see such profits as evidence they have chosen a „safe‟ bank for their funds. Source: Research by The Australia Institute 2010
  • 25. Consumer behaviour towards the Mode of Payment
  • 26. Consumer Behaviour on Making Payments in Australia Transactions up to $50 accounted for around three-quarters of the number of payments in 2010, but only one-fifth of the value of payments. By contrast, only 0.1 % of transactions were more than $5 000, but they accounted for more than one-fifth of the value of payments. Given this, it is not surprising that cash continues to be the most widely used payment method in Australia, accounting for 62 % of all payments made by Australian consumers. Cards are the dominant payment method used for mid-sized transactions and are the second most frequently used payment method for all payments. BPAY, internet/telephone banking and cheque are important payment methods for higher-value transactions (particularly those above $500), although these payment methods collectively account for less than 10 per cent of the number of payments. Roy Morgan Research in December and November 2010
  • 27. The evolution of Payment Patterns Card payments are responsible for the bulk of this shift away from using cash for low-value payments: card payments accounted for around 24 per cent of payments Although the broad patterns under $50 in 2010, up from 19 per cent in 2007. To a of payment behavior have lesser extent there has also been some substitution to remained unchanged, the other electronic forms of payment, such as BPAY; the use of different payment industry with the largest decline in cash use was methods has evolved to household bills, where „paperless‟ billing, which some degree in the period encourages electronic payment, has been promoted between surveys. increasingly in recent years. Most noticeably, the relative use of cash declined. Although the average use of cash actually increased slightly between survey periods, the increase was less than for other payment methods .Therefore, the share of cash use in the total number of payments decreased from 70 % in 2007 to 64 % in 2010 . Roy Morgan Research in December and November 2010
  • 28. Payments by Cards By contrast, growth in the use of credit cards has been subdued over the past three years. One reason for this preference for However, consumers have As per the Survey there has been debit cards may be the increased become better at avoiding credit relative decline in cash use. The Within debit cards, growth was prevalence of surcharging on card surcharges, in part by using average number of card particularly strong for payments credit card transactions between payment methods that do not payments made by each on MasterCard/Visa debit cards. survey periods. attract surcharges. Indeed, the respondent in a week increased This likely reflects the wider The Reserve Bank first introduced proportion of payments on which from around 3.5 payments to 4.8 issuance of these cards by the reforms to remove surcharging consumers actually paid a payments. This was largely driven major banks in the period restrictions in 2003, leading to a surcharge remained virtually by strong growth in the use of following the first survey. steady increase in surcharging by unchanged between the studies, debit cards. merchants over time. This has at around 5 per cent. resulted in a greater prevalence of surcharging merchants in 2010, compared with 2007. Roy Morgan Research in December and November 2010
  • 30. Shopping Behaviour in Australia Australian Shoppers, especially those aged under 30 and with a credit card, are sending $4.2 billion a year to overseas online retailers, robbing local bricks-and-mortar shops of business. On the consumer side, bank surveys have shown that this trend is facilitated mainly by two important developments. First is the enhanced security of online payments. A recent PayPal survey reports that in the early days, 95 % of internet shoppers expressed strong reservations about the safety of online transactions. More advanced payment technologies have, however, recently increased consumer confidence in making online purchases. Second is access to credit cards and other forms of online payment. Research shows that more than half of internet sales are finalized using credit cards. In the economic literature, there are formal models of consumption behavior that have been used to explain this trend towards increased internet consumption. First of these is the Transaction Cost Economic (TCE) model, which basically says that a transaction subject will choose one form of transaction channel instead of others because of lower transaction costs. Applied to internet shopping, which is essentially a choice between the internet and traditional stores, consumers are thought to choose the internet channel because of the lower transaction costs. Lower transaction costs necessarily includes the money costs of the good or service purchased but also refers to convenience gained by the purchaser in the process. The second model is the standard economic model of competition, and clearly complements the TCE explanation. The internet acts mainly as a mechanism that reduces consumers' costs of acquiring information about products and prices. Before the online age, someone looking to buy a fridge, say, might have gone into one or two local shops — and perhaps rung a few more — to compare prices. The web, however, makes it easy to gather more information. Source: education.theage.com.au/cmspage.php?intid=152
  • 32. Private Health Insurance in Australia- A snap shot Private health insurance plays an important part in delivering Australians access to world-class care. Last year private health funds paid $12.4 billion in benefits towards the healthcare of the 11.7 million Australians with private health cover. By proposing to means-test the 30% Rebate, the Minister for Health and Ageing will make healthcare less affordable for all Australians, and by her own admission, add more pressure to our public hospitals. The Minister‟s press release of today fails to point out that the estimates of the effect of the Medicare Levy Surcharge changes on private health membership were based on the original 2008 Budget proposal, which was altered significantly in the Senate in October 2008. The Minister herself at the time of the altered legislation passing said “the projection of the number of people from Treasury that will drop out of health insurance is just under half a million, 492,000 people”. The Minister is being deliberately misleading in what she is choosing to tell Australian health consumers about those changes then and what will happen to our health system if the means-testing legislation is approved by the Parliament. www.ahia.org.au/news/media_releases/“no-minister of May 2011
  • 34. Growth Of PayPal in Australia PayPal in Australia has over 3 Million active users and over 30,000 Australian businesses as of 2010 now using PayPal as a secure way to send and receive money online. PayPal is capitalizing on the growing Australian eCommerce market with the number of customer registrations growing more than 25% in the last calendar year. The total payment volume for PayPal in 2009 was almost US$2 billion, an increase of 32 per cent from 2008, demonstrating rapid growth as consumers and businesses seek fast, safe and secure ways to shop online. In addition to domestic growth, PayPal has enjoyed a growth in cross border sales. The recent rise in the Australian dollar has brought about a year on year increase of 32 % in cross border payments as Australians seek bargains and choice from overseas, and take advantage of the strong dollar. Conversely, PayPal opens the door to Australian businesses seeking opportunities to sell products or services to overseas markets. With more than 84 million active accounts in 190 markets and 24 currencies, PayPal enables global eCommerce. Jonathan Reid, Director, MyCatwalk.com, an online Aussie fashion boutique and PayPal merchant commented: "Building revenue from overseas is critical to our business and PayPal has definitely helped us to grow our business abroad. Over the past 5 years, several factors have been responsible for the slower uptake of e-tail amongst Australian consumers. While the cost of shipping, long delivery times and uncertainty around returns policies have prevented some consumers from shopping online, concerns around the security of transactions remains the top concern to consumers shopping online today. James Stevens, CEO and Founder, Roses Only, one of Pay Pal's first merchant partners in Australia, commented: "We integrated PayPal the minute it was available in Australia. Delivering a gifting service, it is critical that our customers feel confident that their payment is secure. Source: http://www.paypal-education.com.au/media/news_22042010.html
  • 35. PayPal-Statistics in Australia Approximately 50% of PayPal's Australian transactions are related to PayPal is fast growing and some of eBay purchases. the compelling reasons are: "Travel sites have very much It provides a way of paying without benefited from PayPal," said Frerk- sharing credit card details with the Malte Feller, Managing Director of vendor (even if the payment is PayPal Australia, for example by actually coming from a credit card), making it easier for people to book reducing the security exposure. from overseas. While consumers are more than ready for e-commerce, but retailers have lagged. The range of goods It is simply easier to make a PayPal available is not very impressive transaction than it is to enter a 16-digit (where are the fashion, house and card number, expiry date, security garden, and sports goods? he code and cardholder's name. pondered), "and the prices aren't very attractive" especially when shipping is extra. Source: http://www.itwire.com/it-industry-news/development/38516-paypal-australia-sees-growth-in-mobility?start=1
  • 36. Opportunities for PayPal The PayPal report, which was conducted by Forrester Research and Leading Edge, reveals that despite Australians' slow approach to The other area showing promise for PayPal eCommerce, online retail is a booming market with turnover expected is mobile transactions. The company has to reach $36.81 billion per annum by 2013. provides an API allowing developers to embed payments into apps for the iPhone, Travel and groceries remain the largest two Blackberry, Android and other platforms, online markets, taking up $4.9 billion this year, and Feller thinks this will be used in ways followed by appliances and home "we haven't imagined yet. improvement, set to reach $2.6 billion this year. Other major categories include computer tech at $2.5 billion and apparel at $1.4 billion. In fact, 38% of respondents said competition (2009) from low-cost online retailers would be the biggest threat to profitability, especially those overseas. A separate 32% claimed a PayPal also warns that dedicated lack of skilled staff will hurt, followed by 25% eCommerce stores and Multichannel who claimed the price and performance of retailers are suffering from some big issues marketing would be harmful. About 20% including the high price of postage and said logistics and delivery issues would hurt content management, resulting in lower profitability. inventories than bricks-and-mortar stores. Source: http://www.mypaymentsolutions.com/2010/11/online-retailers-urged-fix-logistics-problems-australian-ecommerce/ & http://www.itwire.com/it-industry-news/development/38516-paypal-australia-sees-growth-in-mobility?start=2
  • 38. Customer Expectations Retailers want their brand name to engender positive feelings among the general public. In a crowded, competitive and increasingly global market place, differentiation is becoming vital. Across the study the quality of customer service is highlighted as a driver of customers that does not focus on price, closely followed by after purchase service. Store location and in-store merchandising are also recognized as having significant impact. “Customer service is critical as customers return as they know they will be given one-on-one help compared to that of other stores.” one retailer said. Facebook and Twitter are the two most reported social media platforms being used, with Facebook leading the way. Almost half of all retailers (48 %) said they looked to communicate with customers via Facebook, and 29.2 per cent have communicated with customers in 140 characters or less via Twitter. Customers rate their retailing experience on certain parameters. They are: Quality of Customer Service while purchase, Quality of Customer Service after sales, Store location, In-store merchandising and other displays, Store design and fit-out, Window display . Source: http://www.businessofretail.com.au/2011_Report/public/pdf/2011_report.pdf
  • 39. Key Trends for Online Retail-Australia The biggest one by far is the growth of mobiles, for accessing the internet and buying products. The second is the use of social media, so people referring to friends and family when talking about brands and The third is the integration of products." digital into traditional retailing. So things like interactive store experiences, bringing technology into the traditional retailing environment Source: fetchoscaraccessories.bigcartel.com/why-shop-online
  • 40. Online Retailers response to Consumer's Expectation Retailers need to make efforts in order to bring many customers online. They also need to enhance the shopping experience of customers. There are certain areas where the retailers and online marketers need to focus. They are: The confidence between a consumer and an online site has to be built. One needs to give consumers the confidence to buy online when they can't touch the product or can't see it.“Eg usage of high quality photos, making sure the retail experience is a high value experience. Online retailers need to start filling their sites with ways to communicate with friends and family through social networks. One needs to be offering the possibility to rate and review products, and consumers should be allowed to share your products on social networks. The third and final piece of advice is around convenience, which feeds back into the growth mobiles and smart phones. "You need to allow that people can buy your products anywhere, at any time," Stephen Foxworthy says. This is especially important given the dollar is now at parity and people are looking at buying overseas. Source: Forrester Research and Leading Edge, Comments by Reactive strategy director Stephen Foxworthy http://www.smarttechnology.com.au/blog20101125ecommerce-sales-heads-27-billion-2010
  • 41. Amazon in Australia As online sales soar in Australia, US operator Amazon says that their Australian business has increased "significantly" in 2010 has reported a 51% increase in sales to $9.91 billion. On the downside, profits fell 8 percent to $191 million in the second quarter due to additional investments in infrastructure. Amazon did not give specific details about sales of its Kindle e-readers in Australia, but Amazon CEO Jeff Bezos did say the $139 Kindle 3G version with Special Offers - a version of the Kindle released during the quarter that is subsidized with ads - is now its top-selling Kindle device. Jeff Bezos said that "low prices, expanding selection and innovation" drove the company's second-quarter growth. This growth means Amazon must keep investing in operations expansions and upgrades along with moves into overseas countries like Australia and India, in order to support the proliferation of its online retail business. to rise. Overall, operating expenses rose 54 % to $9.71 billion. Source: http://www.smarthouse.com.au/iPods_And_Portable_Players/Industry/K5G9B2X7
  • 42. Some Facts -Amazon Amazon. COM has also Customers have been taking completely turned around the unfair advantage of the fashion purveyor, by setting strong Australian dollar and up a members only Online shopping giant Amazon. As the materials are shipped have directed themselves website, Myhabit.com which Com has decided to expand into in Australia from other towards online shopping. offers to its customers Australia. Amazon‟s web services countries, buyers in Australia This in turn has an adverse international brands such as are ready to start operating from have to pay a little extra. effect on the local retailers. In Dolce and Gabana. A lot of a local data centre by early next However, many complaints the month of July Amazon. the products purchased via year to meet the needs of have not been made COM has also taken over Myhabit.com are available on enterprise and government regarding this due to the Britain‟s Book Depository, a 60% discount, the website clients. strong domestic currency. which is really popular offers shipping and delivery amongst Australian book in more than 50 countries lovers as it offers including Australia for only considerably lower . USD 15 flat rate Source: thecourierpigeon.com.au/amazon-coming-to-australia/852198/
  • 43. Bibliography 1. The Research facts by Australian Centre for Research Studies-2010. 2. Retail World Management & Technology. 3. Online Retailer 4. CeBIT Australia. 5. Nielsen. 6. eTail2010 7. Reserve Bank of Australia. 8. Australia Institute Research Facts-2010 9. Forrester Research and Leading Edge 10.Smart Technology Australia 11.www.businessofretail.com
  • 44. Disclaimer “The information contained in this document that includes text, graphics and links, are provided on an “as-is”, "with all faults" and "as available" basis and are without warranty of any kind. While I depend on sources that are believed to be reliable, it cannot rule out errors in judgment or application. The document is intended for “information” and “general guidance” purposes only.” “Investment decisions and/or other decisions based on the conclusions and potential strategies mentioned in the document are not necessarily endorsed by My Public Brand Inc. My Public Brand Inc does not represent or warrant that the information provided is accurate, complete or current and will not be held liable for any damages of any kind arising from the use of this information.”
  • 45. Consumer Trends in Australia September 27th, 2011 Tony Hackett Blog: http://www.mypublicbrand.com/ Email: tonyhackett@mypublicbrand.com Twitter: https://twitter.com/#!/MyPublicBrand LinkedIn: ttp://www.linkedin.com/in/mrtonyhackett Facebook: https://www.facebook.com/mypublicbrand?sk=wall Google+: https://plus.google.com/u/0/b/109841685099483397637/109841685099483397637/posts

Notas do Editor

  1. The power of Australia’s big four banks is unmistakable. Their underlying profits equate to almost three per cent of GDP, up from less than one per cent a quarter of a century ago. Of every $100 spent in Australia, nearly $3 ends up as underlying profit for the banks. Profits are so high because the banking market is highly concentrated. The big four banks now control more than 75 per cent of all bank assets and banks account for over 90 per cent of all lending by financial institutions in Australia. This level of concentration has distorted competition, allowing the big banks to reap underlying profits of around $35 billion per year, including $20 billion in ‘superprofits’ attributable to their market power. Most Australians believe that the banking market is overly concentrated: three in four survey respondents (72 per cent) said that the big four banks in Australia have too much market power.
  2. PayPal grows online payments market in Australia (22.4.10)PayPal enables online payment for both large and small Australian businesses, including JB Hi-Fi, Roses Only, Dick Smith Electronics, Hoyts, Borders, Flight Centre, Deals Direct, Optus and Telstra.
  3. Feller believes PayPal has room for significant growth in Australia. For one thing, the online spend is only 3% of the total, compared with around 6 or 7% in places such as the US, UK, Europe, and Korea.