Retailers looking for their next cross-border e-commerce opportunity should look down: Down Under to be exact. Australian consumers are technology-savvy and early adopters of international online shopping. According to the Ecommerce Foundation, 77 percent of the population uses a smartphone, 65 percent shop online, and 40 percent have purchased clothing and footwear from an international merchant.
Australia is a growing force when it comes to e-commerce sales. In 2016, Australia’s e-commerce sales totaled $9.5 billion with sales projected to increase to $15.4 billion by 2021, according to Statista. While this is significantly lower than China’s 2016 online sales of $752 billion, consider that Australia’s population is roughly 2 percent the size of China’s.
With high purchasing power and disposable income, the Australian online shopper offers huge growth opportunities for online retailers. Don’t miss out on the opportunity to capture sales from this high-performing e-commerce market. Here are some tips for attracting the Australian online shopper.
Localize your communications
Language is one of the most important components when providing consumers with a seamless and localized online shopping experience. While this seems like an obvious point, it can be surprisingly easy for retailers to miscommunicate with their customers – even when they speak the same language.
magine what would happen if you weren’t specific with your online advertising in these two scenarios. A “thong” in the U.S. is an undergarment, but in Australia it’s footwear. Similarly, selling a Barbie™ in the U.S. is a doll, where in Australia it could also be interpreted as a barbeque grill (think “shrimp on the barbie”). Not localizing product descriptions is a sure-fire way to lose customers before they’ve even started shopping.
Product seasonality is also a major factor when localizing your online shopping experience. In Australia, seasons are opposite from those in the states. This is extremely important when it comes to promotions and sales. The last thing a U.S. retailer wants to do is promote winter gear to an online shopper in the midst of an Australian summer.
Be prepared for changes in duty and tax exemptions
Australia has historically had one of the most generous customs exemptions in the world for online shoppers with no customs duties or taxes on orders less than AU$1,000 (approximately US$750). That’s anticipated to change on July 1, 2017. To help Australian retailers be more competitive, Parliament is considering legislation that would impose duties, taxes and a Goods and Services Tax (GST) on imported online shopping orders for retailers that sell more than AUS$75,000 a year. One of the provisions includes a requirement to notify consumers about the GST costs of their purchases, which could require merchants to calculate and invoice these costs before the delivery is made.
To fully succeed in this market, it will be critical to proactively calculate and display the various duties and taxes when conducting business in the Land Down Under. Creating a customized online shopping experience is easier with the help of industry tools and solutions like UPS i-parcel. This technology gives retailers the ability to tailor promotions, shipping programs and product availability without complex IT infrastructure. It takes the headache out of cross-border e-commerce, making it easier for retailers to win over customers and complete sales.
Understand shipping preferences and expectations
Consumers in Australia have high expectations when it comes to shipping and delivery. According to a report by SaleCycle, Australia has the highest rate of online cart abandonment in the world. Reasons include high shipping costs, lack of free shipping, and the number of shipping options provided.
However, when it comes to cross-border e-commerce deliveries, Australians are a bit more forgiving and understanding. In fact, 36 percent of Australian consumers expect shipments to take two weeks or longer. The country’s sheer size and transportation challenges in getting an item from point A to point B play a role in setting these consumers’ expectations.
For retailers looking to do business with the sixth largest country in the world, it’s imperative to partner with a global shipping provider that has the expertise, operations and logistics infrastructure to help meet customer demand.
Don’t be left behind
Conducting business across borders may seem like a daunting task – but it doesn’t have to be. By partnering with a third-party logistics provider with cross-border e-commerce expertise, retailers can localize shopping experiences and meet evolving customer demands. The right partner will also help retailers ensure efficiency across the supply chain to keep costs down and customer satisfaction up.
Now is the time to take action, mate.
UPS i-Parcel provides international fulfillment services to eight of the retailers in the Internet Retailer Top 1000, the database of the leading online retailers in North America.Favorite