Online retail has jumped 24%: Australia Post

The number of Australians jumping online to shop continues to increase, with new research from Australia Post showing the total online spending in 2018 topped $27.5 billion, a 24 per cent increase for the year.
Australia Post has released its annual Inside Australian Online Shopping Report – an overview of Australia’s eCommerce market that provides key insights into who is shopping online, and what they’re buying.
It shows that Australians are embracing online shopping at an accelerated rate – with the online goods spending for 2018 reaching 10 per cent of total retail – two years faster than expected.
Australia Post general manager for parcels and express services Ben Franzi said the report also shows that 73 per cent of Australian households shopped online in 2018 – some 7.6 million Australian households.
“Australians are getting online more and more, and changing the face of shopping. With it, they are also expecting faster service and delivery – with next day deliveries growing by 31.7 per cent, with more than 62 per cent of these fashion-related purchases.”
Mr Franzi also said the way Australians are shopping online is also changing, with smartphones increasingly being the medium of choice.
“Use of the smartphone to make online purchases increased 28 per cent for the year – to now make up more than 26 per cent of all purchases. It now sits comfortably alongside the laptop (32.8 per cent) and desktop (27.3 per cent), both of which fell for the year.”
Fashion continues to be the leading category, accounting for more than a third (35 per cent) of all purchases, with more than 20 per cent growth year on year. Variety stores, health and beauty and homewares and appliances also attracted lots of online shoppers.
Marketplaces such as eBay and Etsy, together with newcomers Amazon, Catch Group, Kogan and Myer, continue to be popular.
“Australians appreciate the convenience that comes with being able to access goods from a variety of sellers in one place – it is quite literally a market, replicated online and providing an abundance of choice for consumers.”
The convenience of Buy Now, Pay Later (BNPL) options such as AfterPay has also sparked joy for consumers, especially amongst  millennials – those born after 1981 – who have become the fastest adopters. Unlike a credit card there is no service fee for customers who pay on time.
When it comes to overall volumes, the November/December period was the busiest time of the year – as Australians sought to snag a bargain ahead of Christmas.
“The five weeks from 11 November to 15 December accounted for almost 15 per cent of all online purchases. The peak for this period was the Black Friday / Cyber Monday sales, which accounted for the biggest online shopping week in Australia’s history, recording growth of over 28 per cent, year-on-year.”
Cross-border e-commerce is also booming with New Zealand (29 per cent), China (15 per cent) and India (11 per cent) the leading purchasers of Australian goods online.  Fashion is the leading category, followed by health & beauty and baby products which are in demand, due to Australia’s great reputation for producing clean safe and premium-quality products.
The number one online buying location was once again Point Cook in Melbourne’s western suburbs, which topped the list for the fourth year in a row. The top twelve locations are again dominated by suburbs that have an influx of young families.
Top twelve online shopping locations by postcode:

  1. Point Cook VIC
  2. Toowoomba QLD
  3. Mackay QLD
  4. Liverpool NSW
  5. Cranbourne VIC
  6. Gosford NSW
  7. Hoppers Crossing VIC
  8. Campbelltown NSW
  9. Bundaberg QLD
  10. Wyong NSW
  11. Rouse Hill NSW
  12. Cairns QLD

Australia Post establishes safety partnership with the Australian Trucking Association

Australia Post has announced a four-year partnership with the Australian Trucking Association (ATA) with a focus on safety on the roads.

The announcement coincides with National Road Safety Week, and includes a $200,000 sponsorship pledge for the rebranded Volvo ATA Safety Truck.

According to Australia Post, the partnership will have a focus on educating drivers on how to share the road safely with heavy vehicles through hands-on informative, small group presentations and virtual reality technology.

Australia Post Group Chief Operating Officer Bob Black said the new arrangement showcases Australia Post’s focus on road safety education, especially among younger drivers.

“We are always looking for ways to keep our people and communities safe. Every year over 1,200 people are killed and 35,000 seriously injured on our roads,” Bob said.

“Last year we experienced 768 road injuries across our workforce nationally. That means every workday three posties are injured in motor vehicle accidents – that is three posties too many.

“This is an important partnership to help end road incidents and trauma – especially involving heavy vehicles which are a big part of our network.”

Australian Trucking Association CEO Ben Maguire said the ATA was thrilled to have Australia Post’s support for this educational and behavioural change campaign, with the new truck set to be on the roads in October 2019.

“Official estimates show that about 80 per cent of fatal multi-vehicle crashes involving trucks are not the fault of the truck driver. 25 per cent of occupants involved in a casualty crash with a truck are aged 26 years or younger, however this age group only represents only 10 to 15 per cent of the driver population,” Mr Maguire said.

“Australia Post’s support for this project demonstrates a commitment to road safety and a shared vision of zero fatal or serious injury crashes on our roads.”

A dynamic view of the operations inside the parcel facility Australia Post online shopping

Online shopping unstoppable: Australia Post

Australian shoppers will be just as likely to open their wallets for online shopping as they will in-store in a decade’s time, with new research by Australia Post revealing that by 2030, it is expected that one-in-two purchases will be made digitally.
The survey of almost one thousand small and mid-size Australian businesses across retail, manufacturing, logistics, financial services, education, health and utilities found that almost half (49 per cent) expect online retail to reach parity with bricks and mortar retail sales in 2030.
The findings come as online shoppers are invited to celebrate their favourite online retailer by voting in the Australia Post ORIAS People’s Choice Award. Voters have the chance to win the ultimate online shopping spree, an opportunity to spend $10,000 in 60 seconds on a range of products across travel, technology, fashion, homewares and leisure.
Australia Post general manager of segment development & marketing Rebecca Burrows said consumer habits have changed significantly over the past few years, with retailers evolving to find new ways that encourage people to buy.
“People want an in-store experience but in the comfort of their own living room – they want to see, touch and try. Trends such as Augmented Reality (AR) are bridging the gap between online and in-store shopping, and AI-driven personalisation and biometric payments are all shaping the way we shop. Leading retailers are also embracing mobile commerce and voice-activated shopping. It is those in tune with customers and willing to embrace the latest online technology trends who will have the winning strategy.”
One company doing this is fashion-tech company GlamCorner, a contender for this year’s Australia Post ORIAS People’s Choice Award.
Co-founder & CEO Dean Jones said GlamCorner’s vision is to revolutionise the way Australian women think about their wardrobes by providing a smarter and more sustainable alternative that is better for the community and the environment.
“One of the most important initiatives we’ve implemented over the past 12 months has been in direct response to customer feedback. We’ve introduced a monthly subscription box service, which gives our customers near-unlimited access to three pieces of designer clothing each month for formal occasions, workwear or everyday wear,” he said.
“The service is growing at an exponential rate, contributing significantly to the 30 tonnes of clothing we process each month. As a result, our customers are telling us their wardrobes are shrinking, while they still have a fresh new look every day.”
Voting for the Australia Post ORIAS People’s Choice Award for 2019 runs from 1-31 May via www.auspost.com.au/shoppingspree.

The secret to online customer satisfaction

Retailers who move quickly to invest in next-generation customer service technology are more likely to lead the battle for sales in a tightening economic environment, according to two of Australia’s most innovative online retailers.
The insights come as the search for Australia’s favourite online retailer kicks off, with the Australia Post ORIAS People’s Choice Award providing online retailers with a platform to elevate their brand, gain industry recognition, build trust, and grow customer loyalty.
One of last year’s winners Koh, credited the updating of its customer service software – ahead of many of its competitors – with helping it double revenue over the past 12 months.
Founder Adam Lindsay, who recently launched the eco-friendly cleaning products company into the UK, said the focus was on giving both existing and new customers what they want.
“If you don’t service existing customers properly, you’ll have to deal with a leaky bucket – and therefore spend more time and money on acquiring new customers,” Mr Lindsay said.
Kogan.com, which took out the 2018 Award for best large online retailer, reiterated its commitment to embracing data-driven insights to improve its customer service capability.
Director of customer care Daniel Beahan said Kogan.com considered itself a statistics business masquerading as an e-commerce company.
“Data is key to unlocking our customer expectations and it is our mission to understand the wants and needs of our customers better than any other online retailer,” Mr Beahan said.
“Company growth relies on us delighting our active customer base time and time again, and our mission remains to make the most in-demand products and services more affordable for all Australians.”
Last year’s winners highlighted a customer-first focus, an ability to change and be nimble, the importance of personalisation to create a tailored customer service experience, the continued embrace of social media platforms like Facebook and Instagram to drive awareness and advocacy, and the harnessing of data and analytics as all being key to online retailers.
The launch coincides with an Australia Post report that found the number of purchases online has grown by more than 20 per cent for the year, with online shopping now making up 9 per cent share of traditional retail spend in 2018.
Australia Post general manager of enterprise Andrew Chamberlain said Koh and Kogan.com exemplified e-commerce-savvy businesses that embraced innovation to enhance online experience, ultimately driving customer loyalty and sales.
“In considering potential winners of the Australia Post ORIAS People’s Choice Award, one of the key things consumers look at is a personalised experience that supports ease of purchase – an area in which both Koh and Kogan.com are excelling,” Mr Chamberlain said.
Registrations for the Australia Post ORIAS People’s Choice Award for 2019 are open now, with applications to close 31 May. Voting takes place from 1 May-31 May.

Parcels save Australia Post profits

 
 
Performance highlights for the six months to 31 December 2018:

  • Group revenue was flat against last year at $3.6 billion, masking significant changes.
  • Group parcels contributed $1.9 billion, up 9 per cent, adding $25 million in profit.
  • Group letters at $1.1 billion, down 10 per cent, reducing profit by $102 million.
  • Group expenses contained at 2 per cent growth, including $121 million in productivity gains.
  • Reported profit before tax at $154 million, down 36 per cent, included positive one-offs. Profit after tax $118 million, down 45 per cent.
  • Australia Post is expected to make a modest full-year profit in FY19 given the continued impact of letter decline, economic headwinds and seasonality.

Australia Post has announced a profit before tax for the first half of $154 million, down 36 per cent year-on-year. This included $30 million of one offs. Underlying profit before tax was $124 million, down 38 per cent. Group revenue was flat at $3.6 billion.
The largest business segment, domestic parcels, performed strongly with revenue growing by 10 per cent, up $147 million, well ahead of the general retail market, which grew 2.9 per cent in the period. Group parcels profit grew by $25 million to $127 million. In December, Australia Post delivered a record 40 million parcels, up 12 per cent.
All Community Service Obligations were met or exceeded and customer service standards remained high for letters and parcels, including through extreme weather conditions across the country during the Christmas peak.
Group chief executive officer and managing director Christine Holgate said she was pleased with the continued strong performance of the parcels business, however, significant challenges remain for Australia Post with letters revenue now declining at the fastest rate in its history.
“Although we delivered 10 per cent growth in domestic parcels, well in excess of the growth rates of the economy and in a period of very strong competition, this could not make up for the profit decline in the letters business,” Ms Holgate said.
“Letter revenues are down 10 per cent or $125 million, which reduced profit by $102 million in the half.  This is after saving an estimated $50 million in delivery costs as posties carried 40 per cent of our parcels.
“Since the last increase in the Basic Postage Rate in January 2016, more than three years ago, our costs to deliver letters are up 10 per cent. The number of new delivery addresses has increased by 500,000, yet letter volumes have declined by 800 million.
“Australia Post will deliver more than two billion letters to almost 12 million homes and businesses this year. Although it is shrinking, letters is still viewed as a critical service by the overwhelming majority of Australians.”
Australia Post is an entirely self-funding business. Last financial year, Australia Post incurred an estimated cost of $404 million in delivering the letters service in accordance with its legislated community service obligations.
Group expenses were held at two per cent growth in the first half, underpinned by total productivity savings of $121 million. Independent research shows that Australia Post has improved its Total Factor Productivity at twice the rate of the overall economy and reserved letters at three times the rate.
Ms Holgate said the business was also making good progress on delivering on its strategic initiatives including:

  • Securing the historic Bank@Post agreement with CBA, Westpac and NAB, protecting critical banking services in Community Post Offices, particularly in regional and rural Australia. A further seven financial institutions have already committed to new Bank@Post terms: Suncorp, Resimac, Auswide Bank, AMP Bank, Maitland Mutual, Transport Mutual and ME Bank.
  • The first new major agreement with its important licensee partners in 26 years, providing technology and aligning payments to parcels and other growing services.
  • $64 million of investment in the operational network, including new processing equipment in Sydney, Melbourne and Brisbane enabling automated sorting of an additional 100 million parcels.
  • The fastest growing parcel product, Express, expanded in a trial to a further 500 postcodes.
  • Acquisition of remaining 60 per cent stake in Aramex Global Solutions, which provides end-to-end cross-border logistics and eCommerce solutions, supporting the international growth strategy.

“We have invested in both capability and capacity, without which our teams could not have delivered the Christmas Peak.  Our people were exceptional as they delivered through the most challenging weather conditions, including floods, bush fires and hail storms,” Ms Holgate said.
“Our Net Promoter Score with our customers is at a record high and complaints on Australia Post entities to the Postal Industry Ombudsman were down 31 per cent, although we recognise we still have much more work to do.
“The progress we have made against our strategic initiatives, coupled with the unwavering commitment of our extended workforce to serve the community, means we remain confident that Australia Post will play an important role for many years to come.
“Australia Post is on track to deliver a modest profit for the full year, in the face of ongoing market pressures in the traditionally quieter second half. Australia Post will release its full results in August.”

Australia Post to operate largest electric vehicle fleet

A new order for an additional 1,000 three-wheeled electric delivery vehicles (eDV) by Australia Post is set to make it the nation’s largest electric vehicle fleet operator.
Australia Post group chief operating officer Bob Black said the 1,000 eDV boost its existing fleet of electric postie vehicles – including electric pushbikes – and creates a range of benefits for posties, customers and the environment.
“We are proud to soon be operating Australia’s largest fleet of electric vehicles, and hope this will set the standard across Australia,” Mr Black said.
“With parcel volumes growing – on average, close to 10 per cent each year for the last three years – and letter volumes declining, we’re always looking for ways to ensure our posties continue to play an important and sustainable role in the community.
“These vehicles offer additional carrying capacity, so our posties can deliver more parcels than ever before directly to the customer’s door – and can perform additional functions, such as collecting mail from street posting boxes.”
Along with delivery benefits, Mr Black said the electric vehicles also offer added safety and environmental protections.
“The eDV are safer than the traditional motorcycle. They are easier to see on the road, more stable, have increased rider protection and lower on-road speeds, all of which reduce a postie’s exposure to incidents and serious accidents.
“We started trialling eDV in 2017 and we’ve since deployed them in all states. We have worked closely with our posties to make improvements along the way.
“Our posties love the eDV because they demonstrate our commitment to providing safer and more sustainable employment into the future, given consumers are sending fewer letters and relying more and more on their postie to deliver their parcels.
“They will also help us achieve our commitment of reducing our carbon emissions by 25 per cent by 2020.”
Deployment of the additional 1,000 vehicles is expected to start from June across all states.
Along with the additional 1,000 eDV Australia Post will also roll out an additional 4,000 electric pushbikes, bringing its total to 5,980 over the next three years.
 

40 million parcels for Christmas

For the first time ever, Australia Post delivered more than 40 million parcels during December, making it the biggest-ever month for parcel volumes for  the organisation.
The growing popularity of online shopping and online sales events, as well as strong Christmas Eve and Boxing Day sales, contributed to an 11.7 percent increase from the previous December.
Australia Post chief operating officer Bob Black said it was all hands on deck over the Christmas period with more than 3,000 extra staff employed across the network to handle the huge volumes.
“We made more than 40 million parcel deliveries in December, and our hardworking posties delivered more than 40 per cent of these, as well as more than 210 million letters,” Mr Black said.
“Our busiest day was Monday 17 December, when we delivered a record three million parcels across the country – by far the biggest day in our history.
“What we didn’t expect was to have a lot of shoppers race to the finish line to post their festive parcels, with our people delivering a whopping 2.7 million items on Christmas Eve – our next busiest day of the month and equal second busiest day in history.”
Mr Black said Australians were embracing online shopping like never before, with Australia Post revealing last year that online purchases had grown by almost 20 per cent in 12 months.
“Our research found that people were buying up to 19.2 per cent more items online. By 2020, we expect one in 10 items will be bought online.
“Online shopping is building momentum as a channel of choice, where customers can make the most of online deals and choose customisable delivery options with Australia Post. This means online shoppers can buy the brands they love no matter where they live,” said Mr Black.

Australia Post to go it alone

Australia Post has decided to secure full ownership of Aramex Global Solutions (AGS), which provides end-to-end cross-border logistics solutions to a portfolio of iconic global e-commerce merchants.
Australia Post has reached in-principle agreement to purchase from its joint venture partner Aramex PJSC the 60% of AGS it does not already own for approximately US$20 million.
AGS has grown strongly since it was established by Australia Post and global express delivery and logistics company Aramex two years ago, with revenue up more than 60% since 2016 to approximately A$138 million* in 2018. Australia Post’s exclusive delivery of parcels for AGS in FY18 generated A$40 million of revenue.
AGS enables Australian consumers to shop online globally, connecting international retailers directly with Australia Post’s last-mile delivery and customs clearance capabilities. In addition to delivering significant parcel volumes inbound to Australia, AGS has an established presence in key global e-commerce trade lanes, including Asia, the UK, Europe and the US, providing a valuable platform for continued expansion.
Executive general manager international services Annette Carey said: “As a wholly-owned subsidiary of Australia Post, AGS provides an established platform to accelerate our international growth strategy.
“Combining our postal capabilities with AGS’s bespoke e-commerce capabilities enables Australia Post to engage directly with international retailers, providing unique customer service to capture strong growth in cross-border e-commerce markets.
“Today’s agreement with Aramex reflects changes to the strategic direction of both organisations, including Australia Post’s commitment to positioning itself as a global provider of cross-border e-commerce.”
The strength of cross-border e-commerce markets and a highly regarded management team, led by CEO Nabil Zaghloul have underpinned the growth of AGS, which is now handling more than two million international parcels a month.
“At AGS, we’re very excited to benefit from Australia Post’s culture, long-term vision and ongoing investment” said Mr Zaghloul. “Through partnerships with China Post and major Asian e-commerce marketplaces, we can leverage our platform into new markets.”
Transaction completion is expected to occur in the coming days. Australia Post has plans to rename and rebrand AGS to reflect the change in ownership in the near future.
* Reflective of revenue generated in the eleven months ended 30 November 2018 and an estimated revenue for December. Full year revenue is expected to be US$99m or c.A$138m. (AUD/USD = 0.7194 at 18 Dec 2018).
 

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