Affordability is the top priority when shopping online for 80% of surveyed Australians, according to the new ‘Delivery Benchmark Report’ by ShipStation.
This shift in priorities is driving a surge in online marketplaces and overseas brands, with 62% of respondents turning to major online platforms like Amazon and 41% purchasing from overseas options like Temu in the past 12 months.
With almost half (49%) of those surveyed planning to shop more with online marketplaces and 44% with overseas brands like Temu and Shein in the next 12 months, Australian retailers are feeling the pressure. The majority of surveyed retailers (88%) believe that selling online has become more challenging due to competition, with 42% naming keeping up with consumer trends as their biggest challenge.
“For many retailers right now, it feels like a race to the bottom to match the low price and speed of overseas retailers such as Temu and Shein,” says ShipStation ANZ VP and Head David Boyer.
“To compete and keep up, retailers will need to shift their operational strategy and look at how they can find efficiencies that address both the cost pressures and needs for fast delivery.”
A disconnect
The research suggests retailers could be out of sync with what consumers actually want.
While 92% of surveyed retailers believe sustainability and ethics, such as eco-friendly practices, are important to stand out to consumers, less than half of the consumers surveyed (45%) consider this important when choosing where to shop.
Similarly, while 88% of surveyed retailers are prioritising personalisation to attract consumers, 49% of surveyed consumers think personalised offers and recommendations are important factors.
Speed of delivery is another area where there is a gap between what retailers are offering and consumer expectations. While 38% of surveyed retailers think delivery speed is most important to consumers when it comes to the online experience, only 17% of consumers consider it important.
In fact, while speed is often emphasised, only 11% of surveyed Australian consumers actually expect their orders to arrive the next day, compared to 19% globally. 25% expect items in two days, 30% are content with three to four days, and 24% will wait five to seven days.
In Australia, cost outweighs speed, with 40% of surveyed consumers prioritising delivery cost above all else (compared to 33% globally) and a significant 63% would abandon a purchase if shipping fees are too high (compared to 59% globally). Premium delivery holds little appeal, with 42% of respondents refusing to pay extra for faster shipping, and only 3% willing to invest in sustainable delivery.
Social shopping
While social commerce, where consumers can discover, browse, and purchase products directly from social media platforms, has been talked about as a trend for several years, adoption in Australia still lags behind other countries in APAC, says ShipStation.
This could, however, change in the next 12 months, with 73% of surveyed consumers planning to buy more often from Instagram, TikTok, or Facebook posts in 2025.
Despite the low uptake among consumers, over half (52%) of surveyed Australian retailers allow customers to buy products directly from their social media, making them the leading retailers in terms of social commerce adoption, followed by the EU (50%) and North America (33%).
A barrier to wider adoption could be due to concerns about how platforms and sellers handle customers’ personal and financial data. For two-thirds of surveyed online shoppers, brand trust is essential, with quality service, customer care, and a strong social media reputation being extremely important/important when making purchase decisions.