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Changes in Consumer Behaviour Abroad, Australian Retailers Take Note
More to Shop Online this Christmas but it’ll be a Faster, Tougher Sell
Tuesday, 2 December 2008 – If Black Friday shopping trends in the US are anything to go by Australian retailers can expect more consumers to shop online this Christmas season. However, new behaviour suggests they’ll be tougher to sell to and won’t hang around online for long.
Black Friday, the day after Thanksgiving, traditionally used as a benchmark for how retailers across the world will fare during the Christmas holiday season, showed an increase in the number of consumers jumping online to pick up a bargain.
While eBay’s PayPal division saw a 34 per cent increase in transactions across the retail sector, Coremetrics’ (digital marketing provider) industry data shows that consumers today are shopping with purpose, spending 20% less time browsing online. Whether hunting for a bargain and/or specific items, consumers are utilising on-site search functions 5.3% more than this time last year to find what they
want faster.
Interestingly, data shows an increase in the number of items purchased per online order, which rose by 2.5% when compared with 2007. However, the average value of orders dropped by more than 6%, showing a preference for cheaper sale items and a consumer need to maximise the dollar. And if retailers are going to make the most of online sales this year, they’d better improve on their US counterparts’ efforts to convert new traffic into paying customers - new visitor conversion rates dropped by a massive 13% this year. (A breakdown on all Coremetrics’ benchmarking data
follows below.)
While Coremetrics’ overall benchmarking data shows consumer tendency to spend less and be more targeted in their shopping approach, when broken down, ecommerce growth is evident in retail sub-verticals. There’s also valuable insight into consumer preference to be taken on-board:
- Traditional department stores experienced a 12% increase in order sessions, a whopping 30% increase in average items per order, and 10% increases in average order value and in shopping cart conversion rate. These numbers suggest that department stores, more than niche retailers, succeeded in finding the right merchandising formula for converting casual browsers into buyers.
- The Gifts sub-vertical registered an increase of more than 5% in shopping cart sessions and an astonishing 57.38% jump in orders session. The average number of items per order went up 6.50%, average order value went up 1.53%, and new visitor conversion rate went up 2.08%.
- The Health and Beauty sub-vertical saw an increase in the percentage of browser and shopping cart sessions (6% and 10% respectively), as well as in average order value (10%). These increases suggest increased interest among consumers in “little luxuries,” a willingness to spend on small, feel-good indulgences as opposed to more expensive splurges.
- The Jewelry sub-vertical experienced a large increase in shopping cart sessions (80%) and order sessions (36%), suggesting that their target shoppers may be more insulated from the economic downturn than consumers at large.
Kevin Mackin, local general manager for Coremetrics, a digital marketing optimisation solution provider, said, “These numbers show that it’s possible for retailers to be successful even in a tough economy, but only if they make it easy for consumers to find what they want and offer good value sale items.
“Consumers will spend this Christmas but they’ll be looking for ways to maximise their dollar and will avoid getting caught up in impulse buying situations. There’s little doubt ANZ will see more people hit the net this year to shop so as retailers we need to better service potential customers and offer products at a competitive price.”
Retail Summary
 |
Black Fri 2008 | Black Fri 2007 | % Change | Analysis | |||||
Shopping cart sessions Out of all sessions, |
10.80% | 10.75% | 0.47% | The number of people who put items in their shopping carts rose by nearly 0.5 percent. | |||||
Order sessions The percentage of sessions in which |
3.49% | 3.55% | -1.69% | The number of people who actually completed a purchase dropped by 1.69 percent. This number combined with the one above it suggests retailers are having a hard time convincing people to make a buying decision. | |||||
Average time on site The average length |
517.27 | 632.33 | -18.20% | Consumers devoted nearly 20 percent less time to online shopping, suggesting shorter consumer attention spans and a more focused approach to shopping. | |||||
Average items per Average number of |
4.56 | 4.45 | 2.54% | People are actually buying 2.54 percent more items per online order than last year. | |||||
Average order value Average value of |
$126.04 | $134.29 | -6.15% | While consumers are buying more items per order, the average value of their orders dropped by more than 6 percent. This suggests a strong preference for lower-cost bargains. | |||||
New visitor Out of all visitor |
2.27% | 2.61% | -13.03% | Retailers in general did a poor job of converting traffic to their sites into paying customers, with a 13.03 percent drop from last year. | |||||
On-site search session Out of all sessions, |
18.44% | 17.50% | 5.37% | The more than 5.3 percent jump in on-site search suggests that shoppers are taking the time to hunt for bargains. This figure can serve as a proxy for offline bargain hunting behavior too. | |||||
About Coremetrics
Coremetrics is the leading provider of digital marketing optimisation solutions. Its solutions generate high return on online marketing investment and continue to pay daily dividends in improved marketing performance. Over 1,000 online business sites, transacting over $15 billion this year, are now using Coremetrics’ Software as a Service (SaaS) solution to optimise online marketing efforts. Coremetrics’ solutions encompass advanced online analytics and precision marketing applications, including search engine bid management, email marketing and cross sell applications to acquire customers more cost effectively, increase conversion rates, and increase lifetime customer value. The company is privately held with funding from Accel Partners, FTVentures, and Highland Capital Partners and is headquartered in San Mateo, California. To learn more about Coremetrics,
visit www.coremetrics.com.au
Media and Analyst Enquires:
Frances Ward
Solid Ink Communications
Tel: +61 (0)413 789 335
Email: frances.ward@solidink.com.au
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