Australian Consumer Behavioural Survey – 2020 Part 3: Opportunities for growth in local online shopp



Key Takeaways

  • Almost half (49%) of all respondents have increased spending on online shopping since COVID-19 social distancing began. The share of respondents reporting increased online shopping generally decreased with age but rose with income.

  • The growth of online shopping was highest in metropolitan areas. In metropolitan areas over half (52%) reported higher online shopping, while 38% reported the same in regional areas.

  • 70% of all respondents now consciously support local businesses, but 70% would like to support more local businesses but were restricted by a limited online presence. The percentage of respondents that consciously support local businesses generally decreased with both age and income.

  • Developing a stronger online presence was the top factor chosen by all respondents (60%) to make it easier for people to support local businesses. The second and third most popular factors were being more innovative in their offering (54%) and offering home delivery (53%).

  • The survey results underline the importance of local business having an online presence. A clear majority of respondents were keen to see improvements in the online shopping experience. The message to local businesses is that they need to invest in online channels to capture future growth in online shopping.


Background

This survey report on working from home is the third of three reports based on a behavioural change survey conducted by Venture Insights and commissioned by NBN Co (completed 28th April 2020). The aim of the survey was to understand how new needs due to COVID-19 had changed consumer broadband and technology usage.

The survey was conducted nationally across Australia for 1,006 respondents, all with a broadband connection, and with a representative survey sample across demographic and regional groupings.


In this report, we look at trends in online shopping during the COVID-9 shutdown.


Online Shopping and Local Businesses

In response to the COVID-19 lockdown, small and medium sized businesses have been utilising and, in some cases, creating their first e-commerce platforms. This effort has been supported by state and local authorities in some cases, but is principally driven by the need to recover lost sales and revenue arising from movement restrictions and the inability to open business premises. This accelerates the trend towards online shopping. This trend has been documented by the Small Business Digital Taskforce[1], for example, though Australia has been relatively slow to take up online shopping compared to many other developed markets.


The survey questions on online shopping were designed to understand how online shopping habits had been affected specifically by the COVID-19 lockdowns in Australia. In particular, the survey explored how many respondents had increased their online shopping, whether consumers were supporting local business, and what respondents thought online businesses could do to increase engagement.


Increased engagement with online shopping

Unsurprisingly, the survey found that many respondents had increased their online shopping in the wake of the COVID-19 movement restrictions and shutdowns of business premises. About half (49%) of all respondents had increased spending on online shopping since COVID-19. In metropolitan areas 52% reported higher online shopping, while 38% reported the same in regional areas. To put this in perspective, Roy Morgan found in March 2020 that only 31 percent of Australian grocery shoppers were likely to make a purchase online over the following 12 months[2], but only 4% bought monthly, so the survey results reflect a significant increase in interest in online shopping.


The share of respondents reporting increased online shopping generally decreased with age, peaking at 67% for 25-34 years age group and falling to 27% for the 65+ years age group.


The number of people reporting increased online shopping varied in different income brackets, only roughly rising with income. The lowest result was 40% for incomes of under $25,000. The highest was 59% for the $100,000 to $124,999 bracket.


Increasing support for local businesses

70% of all respondents reported consciously supporting local businesses with their online shopping, and 70% would like to support more local businesses but were restricted by a limited online presence. The corresponding shares for metropolitan areas were 71% and 71%, and for regional areas were 66% and 66%.


The percentage of respondents that consciously support local businesses generally decreased with income. While for the income range $0-$49,999, 57% were consciously supporting local businesses, this number was 73%-80% for the $75,000 and upwards income ranges. The same trend was observed regarding their desire to support local businesses.


The percentage of respondents who consciously support local businesses also decreased with age. Respondents in the 18-44 year old brackets were more likely than average to support local business (77-76%), those in the 45-54 bracket were average (70%), while those in the 55 and above age brackets were less likely than average to do so (60-50%). However, their desire to support local businesses was high and also more consistent, especially amongst under-65s. This may point to unmet demand for local online shopping offerings.



What do online shoppers want of local businesses?


Many businesses have commenced or expanded online sales with the COVID-19 lockdown as an alternative means of maintaining sales and revenue, but not all have. There are also gaps in some online offerings. Our earlier report on working from home trends reported significant willingness to continue working from home after movement restrictions are lifted. This signals a potential shift of revenues from CBD outlets to local ones, and an opportunity to address the needs of time-poor individuals in a kore local setting than before.


So the survey asked respondents what initiatives they wanted to see from local businesses to make it easier for people to support them. The top three responses were as follows:

  • The top response was “developing a stronger online presence”, chosen by 60% of respondents. This would include, for example, launching e-commerce functionality on existing passive websites and  expanding the available range of goods and services online.

  • “Being more innovative in their offering” was the second most common response at 54% of respondents, which would include increasing the functionality of websites to include additional functionality such as special offers, coupons and loyalty rewards.

  • Finally, “offering home delivery” was chosen by 53% of all respondents, suggesting that at least some respondents were reluctant to travel to pick up goods. This may either be because of COVID restrictions, may point to a more long-term lack of time, or could be a mix of the two.

These numbers were not significantly different for metro and regional survey respondents. By age, some patterns emerged. The desire for a stronger online presence generally declined with age (with the exception of the 55-64 year old bracket), while the desire for more innovative offers peaked in the 25-54-year-old brackets. Interest in home delivery increased significantly with age.


There were also some trends with income. The desire for a stronger online presence and clearer communication by local vendors clearly rose with income, suggesting that higher income tastes are still not being met by online vendors. There was less interest in innovation in the lowest income bracket, but a higher and more consistent level of interest in higher income brackets. However, interest in home delivery was consistent across income brackets, and no clear pattern with alteration of operating hours.

[1] See for example, Small Business Digital Taskforce, Report to Government March 2018. Downloaded at https://www.industry.gov.au/sites/default/files/small_business_digital_taskforce_-_report_to_government.pdf?acsf_files_redirect, 9 June 2020.

[2] “31% of Aussie Grocery Shoppers to Purchase Online in 2019” https://powerretail.com.au/news/31-of-aussie-grocery-shoppers-to-purchase-online-in-2019/, downloaded 9 June 2020.


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