Aussie retailers shun online shopping

Australians are shunning shopping online over worries about retailers’ return policies and the perceived difficulties in posting items back once they are received.

New research by consultancy firm Leading Edge has found the growth in online buying has stagnated, leaving Australia well behind the rest of the world in the uptake of retailing on the net.

It also found those consumers not already buying goods online have no intention to start anytime soon.

Some of the 1,215 consumers surveyed blamed slow Australian broadband speeds for their lack of interest in shopping online.

However, the majority cited concerns over the return policies of online retailers and logistics such as delivery charges.

Leading Edge director of retail Phil Bonanno said the shoppers’ lack of assurance to be able to return an item after receiving it and the perception of difficulty in retuning an item via the post presented barriers.

“It is perceived as more difficult to return an item and less certain to be able to do so in the first place,” he said.

“You don’t have the fabled return policies that you get in the US, where there are no questions asked.”

He said enticements were important so customers felt as though they were getting a good deal, while removing barriers of concern was equally important.

Mr Bonanno said most local websites lacked innovation, failed to engage the consumer and offered nothing new or exciting.

“Retailer sites in Australia are little more than catalogue pages on the web,” he said.

“Few sell anything online and most offer no integrated services between stores and sites.”

The survey, which included males and females aged 18-64, was conducted in early March.

It showed that even after removing some barriers for consumer acceptance, certain products would still not sell well online.

“Things like fresh produce, poultry and meats are a hard sell,” Mr Bonanno said.

Other categories that should have more robust sales were furniture, electronics and whitegoods, Mr Bonanno said.

Mr Bonanno said the players in these categories could improve their offering three-fold by selectively providing online commerce opportunities, product information and driving conversion rates of in-store purchases.

Mr Bonanno said consumers were given no reason to alter their purchasing habits and spend more online.

He said Amazon.com did a great job of helping customers find what they were looking for using good search technology while providing significant information about the products.

“Amazon also does a great amount of suggestive selling,” he said.

Suggestive selling is suggesting other products a customer may like in relation to what they are buying/investigating.

“Online is the fastest growing retail channel globally, so the opportunities for local retailers are huge,” he said.

According to the most recent population survey by the Australian Bureau of Statistics, 61 per cent of Australians shopped online during fiscal 2007.

The Leading Edge survey found the Australians who were shopping online were doing so at the popular retailers set up specifically for online shopping, such as eBay.

Four out of five Australians who purchased online use eBay, the research showed.

Mr Bonanno said the top players in online retailing were eBay, Amazon.com and Grays online.

Traditional overseas retailers such as the UK’s Tesco, the US’ Best Buy, Wal-Mart and warehouse retailer Costco Wholesale are leading the way, with online sales each exceeding $US1 billion ($A1.1 billion) annually for fiscal 2007, according to company reports and analyst notes.

Mr Bonanno said these retailers had perfected the online off-line integration where customers could buy online and pick up or return in store.

Tesco’s US arm Fresh and Easy has a blog where it communicates with shoppers.

Mr Bonanno said this interaction was important as it gave the retailer direct access to how the consumer felt and helped position the retailer as a group of people, rather than just a business.

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