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Collecting Australia’s most important data

Rose Yip, Head of E-commerce Data Analytics at Australia Post tells Brittany Coles about her online shopping market insights and how the enterprise uses the power of data and analytics to strengthen the national supply chain.

“Australia Post really has become the ‘Business Keeper’ of the national economy,” Christine Holgate, Australia Post Group Chief Executive Officer and Managing Director said in July, following a new analysis that found Australia Post powered an estimated $2.4 billion e-commerce boom during the height of the COVID-19 crisis through its parcel delivery service.

An email or text that reads “your delivery is coming today” makes millions of Australian’s eyes light up and eagerly wait at their front door like a puppy in the window. In fact, over 5.2 million households shopped online in April alone and received their parcel from an Australian Post courier. Little do consumers know, up until their package was delivered in their hands, that parcel was part of various data touchpoints that helped shape an analysis into the current state of the e-commerce industry.

Rose Yip, Head of E-commerce Data Analytics at Australia Post

Rose Yip, Head of E-commerce Data Analytics at Australia Post says the term “unprecedented” has been worn out, especially used for describing the growth of e-commerce since the COVID-19 pandemic first hit our shores. “I’m going to use the word surreal to describe the data we have encountered since the moment state governments ordered stay at home restrictions,” she says.

Rose says data analysis is extremely crucial at this very point in time. What the new norm means for supply change is likely permanent change.

“Back in the day, we used to prepare for the Christmas peak well in advance. This happened overnight, and now the supply chain has to manage living Christmas every day,” she says.

The Deloitte Access Economics analysis released in July found that during the peak COVID-19 period from the three months to May 2020, Australia Post facilitated an additional $2.4 billion in e-commerce compared to the same time last year, with communities in regional and remote Australia accounting for almost a quarter of the business. A month prior to this new market research, Australia Post released its annual Inside Australian Online Shopping Report.

Rose says the report is now in its fifth year and believes it’s the most important one compared to previous annual reports because it provides businesses with a macro view into the acceleration of e-commerce. The report’s findings are collected from near real time data from parcels, Rose says every single touch point the parcel goes through until the customer receives it, creates a valuable data point.

With Victoria now in its second lockdown that is set to continue until mid-August, Rose and the data analytics team at Australia Post expect a further widening of thriving e-commerce activity, that some would continue to label as unprecedented demand.

Busiest period in Australian online shopping history

Sales peaked at 135 per cent YOY over Easter, making the holiday weekend Australia Post’s biggest period in online shopping history. Rose claims from a data point of view, the e-commerce boom virtually happened overnight in early April.

“It was certainly an interesting time,” Rose says in regard to the unexpected surprise that Easter period overtook the 2019 Black Friday/Cyber Monday shopping event as the busiest period in Australian online shopping history.

“Due to constant change, we had to start looking at numbers daily. To constantly see numbers climbing before your eyes, we reached a phase where it definitely peaked around Easter,” she says.

The traditional peak period which includes Black Friday and the pre-Christmas rush is now overshadowed with the number of purchases in the 30 days to April 30 up 6.8 per cent when compared to the 30 days to 18 December 2019.

Ben Franzi, Australia Post General Manager Parcel and Express Services stated in the annual online shopping report that Australia Post predicted that by 2025 online shopping would account for 16–18 per cent of total retail spend, but the recent growth its seen suggests the pandemic has brought this forward.

The Deloitte Access Economics analysis found the number of parcel deliveries increased by 26 million on the 2019 figures, with activity in regional Australia increasing at a faster rate than metropolitan areas. According to findings in the analysis, food, liquor, homewares and appliances stood out as the top categories for growth in Australia Post parcel deliveries in the COVID lockdown, while variety stores and fashion retailers gained sales momentum during the three-month period.

Rose says as the COVID lockdown replays in Victoria with effects felt across the nation’s supply chain, the only channel businesses can rely on during this time is online. “Our annual report this year gives businesses a macro view of what’s going on right now, but more importantly in understanding the speed of e-commerce and what it means for them.” The second half of 2020 has to be focused on ensuring temporary measures become sustainable for businesses situated in the supply chain.

How Australians want their goods delivered

It would appear that the pandemic hasn’t only changed Australians’ online purchase frequency; it has also impacted when they’re buying and how they’re receiving their goods. In April 2020, 91 per cent of all deliveries went to homes. This was a 9 per cent increase in share compared to the whole of 2019. 10 per cent of deliveries in 2019 were delivered to workplaces. In April 2020, that proportion was only 4 per cent.

Rose says whilst we will see workers gradually make a return to the office, social distancing measures may mean that flexible working remains prevalent, making choice, convenience and flexibility in delivery even more important. “As stay at home restrictions ease, we will most likely see an increased demand for alternate delivery options,” she says.

“It’s going to be likely that most workers will have flexible hours, working from home and also at their office. Even though alternate deliveries are still adjusting to changing consumers’ lifestyles, it’s going to be popular moving forward.”

Findings in the 2020 report suggest Click and Collect also continues to grow, as it alleviates the cost versus expediency dilemma for sellers and buyers.

“The number of Click and Collect shoppers grew by seven per cent between July 2019 and March 2020 when compared to the 2019 financial year,” the report states.

 

Rose believes with activity in regional Australia increasing at a faster rate, the centre of attention not only should be on the demand side, but also needs to be on the supply side. “If you think about businesses that want to leverage online customers, you can sell from anywhere, so e-commerce growth is an absolutely massive advantage for regional areas,” she says.

The tragic bushfire season that affected the states of New South Wales and Victoria before the peak of the pandemic has enforced a strong economic drive towards supporting local goods. “Local has become a big focus for Australia as a whole, I think it has shone a light on the importance of local supply,” Rose says.

“We survey about 2,000 customers a month to form qualitative data to get a complex understanding behind buyer behaviour, including what they are finding challenging which you can’t get from pure numbers alone.”

The 2020 report revealed that very remote Australia registered more than 56 per cent growth YOY in April 2020, compared to 10.8 per cent in 2019. According to the report, Victoria grew 111 per cent YOY in April, compared to 19.9 per cent in 2019 and the Australian Capital Territory and New South Wales grew by an astonishing 102 per cent and 98 per cent YOY respectively.

In terms of Australia’s online shoppers’ hotspots, Point Cook in Melbourne’s west retained its position as the number one spot for online shopping for the fifth time and seven of the nation’s top 10 suburbs recorded growth above the national average.

However, despite the location, one factor is universal across the sunburnt country and it’s that people want to know what’s happening with their parcels and the challenge is adapting to consumer demands.

It’s Christmas every day until Christmas day

“This industry-wide shift has been as dramatic as it has been swift, and will no doubt alter future buying behaviour. While the current acceleration we’re seeing may begin to steady, many of the changes we’ve seen are likely here to stay through the rest of 2020 and beyond,” the report states.

Rose says she’s lost count how many times she has been asked and thought about the foreseeable future for e-commerce growth in Australia leading into the traditional peak holiday period in November and December this year.

“My gut feeling at the moment is that if we can sustain the volumes we are fulfilling now, especially in the second wave period for Victoria, my sense is that e-commerce will undoubtedly stay strong,” she says.

“April was a very surreal period; I think a lot of the data we have seen in recent months will hold through towards the end of the year and go into 2021. I think a lot of shoppers will be shying away from physical stores, I can imagine shoppers will continue to avoid crowded shops for as long as possible.”

 

Prior to joining Australia Post, Rose was a Director at Deloitte Analytics, specialising in customer and strategy, product assessment and network planning. She always had a curious mind and thirst for data solutions and is proud of her team at Australia Post who continue to help businesses maintain their competitive advantage by identifying market opportunities through leadership publications, such as the Inside Australian Online Shopping report.

“This year’s report has certainly been a beneficial tool that businesses have been looking out for. Our biggest priority was keeping it as relevant as possible and focusing on current numbers to help provide up to date insight and make plans for businesses navigating through the new norm,” Rose says. “Analysing data as close to real time as possible is so important, we are already monitoring trends from hotspot suburbs in Victoria who are in lockdown.”

Back in April, people were thinking by July the economy would be on the road to recovery but as more businesses leverage consumer demand by expanding product offerings to include face masks and even hand sanitisers, there is no sign of normalisation ahead anytime soon.

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