The rapid rise of online marketplaces is transforming Australian retail, with research from Manhattan Associates revealing that nearly 40% of Australians now shop weekly on platforms such as Amazon, eBay, Temu and Shein.
The convenience and speed of these platforms are driving a major shift in consumer behaviour, with 80% of shoppers saying their use of online marketplaces has reduced visits to traditional retail stores.
In response to this growing demand, marketplaces are investing heavily in local logistics infrastructure. Such investments highlight how marketplaces are competing as much on logistics capability as on price.
Convenience has become the defining factor for shoppers, with one in three Australians saying ease of use and delivery speed are the main reasons they turn to marketplaces. Manhattan Associates’ research also found that 44% would choose Amazon over Temu even if the same product cost more, simply because Amazon could deliver it faster.
“Speed and reliability are now as influential in the purchase decision as price,” said Raghav Sibal, Vice President, APAC at Manhattan Associates.
“Two-thirds of consumers told us they’re satisfied with marketplace delivery times, which shows that fulfilment performance has become a critical driver of loyalty. Traditional retailers that can match that level of consistency will be in a strong position to compete.”
‘Trust’ a challenge
Despite their popularity, marketplaces face a challenge around ‘trust’. Nearly half of Australians believe that product quality on these platforms is lower than that found in traditional retail stores, suggesting that perception still plays a powerful role in shaping loyalty.
Returns are another pressure point. Two-thirds of shoppers say an easy returns process is critical to their experience, yet more than a third have encountered issues with refunds or product returns. Together, these findings highlight the importance of building confidence through clear product information, reliable fulfilment, and frictionless post-purchase service.
Traditional retailers must differentiate
While marketplaces dominate in convenience, stores continue to offer something marketplaces can’t replicate through trust and tangibility. Forty-two percent of Australians say the ability to see and touch products draws them into stores, while 24% value immediate product availability.
If retailers can combine those physical advantages with the same speed, precision and visibility that marketplaces achieve through advanced fulfilment, they can compete on every stage of the customer journey, says Mr Sibal.
“Unified supply chain technology allows retailers to bring together the best of both worlds – the immediacy and connection of in-store retail, with the speed and efficiency of digital commerce,” he said.
“That’s where the future of retail competition lies.”
