Online shopping behavior of consumers in the Australian Retail Industry

The paper provides an in-depth overview of the online shopping behavior of consumers in the Australian retail industry. It discusses the issues related to online shopping, marketing-focused solutions, and industry examples. The target market needs to be sub-divided into a number of categories like young generation, middle-aged generation, and old-aged generation. The native retailers need to shift their business operations to online mode and should collaborate with e-commerce biggies so that both are mutually benefitted from the online market consumers.

Running Head: ONLINE RETAIL CONSUMER BEHAVIOR
Online shopping behavior of consumers in the Australian Retail Industry
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EXECUTIVE SUMMARY
The mode of online shopping has changed the business outlook worldwide and the
Australian consumers are taking the most advantage out of it. Though online retailing is yet to
take rapid pace but consumers are already synchronizing with the rest of the world in regard to
online shopping. Most of the online buyers in Australia are from New South Wales, Victoria and
Queensland. The regional parts of the country are still below the metropolitan areas in regard to
online shopping and e-commerce (Jiang and Jones, 2016). The growth of online sales events like
Black Friday and Click Frenzy have changed the consumer’s buying behavior to a great extent.
Major online products include grocery, fashion items, homeware and appliances, media,
electronics, recreational goods, health and beauty essentials, liquor and other specialty foods.
The online retail business, both overseas and local, in Australia is facing a number of problems
and is having direct effect on consumer buying behavior. Conversely it could also be said that
the consumer shopping behavior is one of the main reasons of pitfall of online retail industries.

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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
DISCUSSION AND CRITICAL ANALYSIS................................................................................4
ISSUES RELATED TO ONLINE SHOPPING..........................................................................4
MARKETING FOCUSED SOLUTION FOR THE ISSUES......................................................6
CONCLUSION AND RECOMMENDATIONS............................................................................7
INDUSTRY EXAMPLES...............................................................................................................8
REFERENCES................................................................................................................................9

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INTRODUCTION
The paper provides the reader an in-depth overview of the online shopping behavior of
the consumers in the retail industries of Australia. Australian retail is complex, noisy and fast
paced (Solomon et al., 2014). The shoppers expect higher convenience, value and choices.
Online shopping mode has already taken rapid pace of growth and the Australians are taking the
advantage of online shopping experience to their fullest (Nwankwo, Hamelin and Khaled, 2014).
Online shopping has its limitations as well. The paper will focus in critical examination of the 3
most recent issues related to e-shopping and how they will influence the consumer shopping
behavior, especially cultural influences. Best suited solution of the problems will also be found
out with real world industry examples.
DISCUSSION AND CRITICAL ANALYSIS
In recent times a number of issues have evolved in Australia that forced the e-commerce
businesses to rework on their strategic moves so that the consumer market is not adversely
affected.
ISSUES RELATED TO ONLINE SHOPPING
Though the ‘bricks and motor’ mode of shopping has turned into ‘brick and click’ mode
yet a number of challenges have gripped up the growth of Australian online retail market (Jung
Chang, Yan and Eckman, 2014).
First and foremost, Australia is a relatively small populated country and have small market size.
Demographic constraint has limited the pace of growth of Australian retailers and e-commerce
giant like Amazon has created difficulty for the native e-retail industries (Zhou, Zhang and
Zimmermann, 2013). However not only retail industry but online retailing is also growing at

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slower pace instead of achieving higher momentum (Oliver, 2014). Big e-commerce giants are
not eager to enter Australia due to its smaller demographic count. A greater percentage of people
use general retailing method for shopping and are happy with their buying experience. They are
not able to trust e-retailing so quickly and thus finding it difficult to shift to online mode
instantly (Chen, Su and Widjaja, 2016).
Secondly the buying experience till now was not so smooth. A survey by NSW Department of
Fair Trading has found that almost 40% of Australians face issues while buying goods through
online retailers (Sutton-Brady, Kamvounias and Taylor, 2015). Major issues include late
delivery, damaged products and in some cases the product has not arrived altogether. Faulty
product return turns to be a complex process and sometimes a different product is being
delivered which has no resemblance to the one being advertised. Costing also becomes higher
due to unexpected charges. Level of transparency is much lower and this causes discrepancy
among online consumers (Sirgy, 2015).
Buying from overseas online giants like Alibaba and Amazon, causes problems of
currency conversion and shipping costs. Fraudulent use of credit cards for payment option
creates communication issues and trust issues as well (Zhang and Benyoucef, 2016). Australian
people have less trust on online retailers because of their operational mode. Many issues have
cropped where refund, transaction mode and buying policies did not match the consumer’s
interests and people did not buy the product even after one week of intense research.
When it comes to validating the purchase, Australians trust neutral information sources
more in comparison to retail advertisements. The consumers rely on the review method where
they discuss with family and friends about the product and finalize their buying decision. Less
Australians are impromptu buyers (Sirgy, 2015). Their culture let them do more enhanced

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research of comparing products, product information assessment and product availability check
along with delivery time. Building trust and maintaining relationship is one of the main business
strategies of online retailers. Australia being a culturally diverse country finds it hard in trusting
online retailers and vice versa.
MARKETING FOCUSED SOLUTION FOR THE ISSUES
Geographical and demographic attributes are hard to change, almost static in their nature.
Australian though is a geographically isolated country in comparison to US, Canada and UK but
it is rich in cultural heritage and have small yet diversified demographic. Each demographic
segment needs to be focused upon individually. The target market needs to be sub-divided into a
number of categories like young generation, middle aged generation and old aged generation.
Another categorization includes male and female. Other one includes rural and urban Australia.
The native retailers need to shift their business operations to online mode and should collaborate
with e-commerce biggies so that both are mutually benefitted from the online market consumers
(Zhou, Zhang and Zimmermann, 2013). If the retail industries people used to shop shifts to
online mode then the trust factor will remain intact and consumers will not think twice before
opting for online shopping experience with them.
A single global mode of online retailing should be encouraged so that currency
conversion issues are mitigated to the earliest. Delivering and packaging modes need to be
upgraded so that breakage and resource misuse could be minimized. Logistics should be
strengthened and on time delivery service should be fulfilled by any means. The shopping
experience need to be good which will help in trust building (Yadav et al., 2013). Operational
issues need to be transparent so that chance of frauds lessen.

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Australians trust online advertisement lesser in comparison to peer reviews. So direct
online promotional tools need to be modified and the online modes which are mostly used by the
people need to be focused. Social media platforms like Facebook, You Tube, blogs, twitter,
Instagram, Pinterest and some company specific blogs need to be incorporated more while
promoting online advertisements. Various chat groups could also help in promoting online
marketing of e-commerce (Khare et al., 2016). So, the mode of promotion is to be shifted from
mere online ads in e-commerce websites to social media incorporated promotional modes.
CONCLUSION AND RECOMMENDATIONS
Australian retail shoppers are the most digitally influenced shoppers across the globe.
Online mode of information research has become a fashion before actually buying the product
either from physical stores or through online shopping sites. In B2C e-commerce markets the
trust factor plays a major role in differentiating the consumer buying behavior. Once the trust is
built long-term relationship will be automatically maintained (Malbon, 2013). Online mode of
business needs longer time in developing the trust in comparison to physical store chains.
Quality product delivery in specified time frame is the biggest challenge for e-commerce
business firms. Various marketing tools like e-promotions of online discounts, coupons, buy 1
get 1 free, free talk time, payback points, free membership, movie passes and loyalty bonus
points for engaging other customers, deciding upon target market and e-supply value chain need
to be upgraded so that Australians find it easy and safe to trust e-commerce biggies and could
help them revolutionize the world retail business.

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INDUSTRY EXAMPLES
Amazon in Australia was having limited growth before its recent launch. Previously it
had only Kindle store and Amazon Web Services. The Australians preferred to buy Amazon
products from US Amazon sites for may years and the reason was trust factor. They find US
Amazon site more trustworthy in comparison to new Australian Amazon site. Amazon prime is
not here yet but Amazon has decided to avail a lot of benefits to the Australian customers like
lower cost, shipping benefits, wide product line and larger market place to the small businesses
where local businesses could sell their products on Amazon (Khare et al., 2016). But still the
growth of it has been lagging behind in comparison to other emerging target markets of Amazon.
The customers are less excited about the expansion of Amazon now than they were twelve moths
ago.
Another retail market ruler Marks and Spencer started its Australian operations with a
very aggressive campaign but its operational activities have been lowered by the GST invoices of
Australia which it failed to deposit in due time (Sutton-Brady, Kamvounias and Taylor, 2015).
The effects were not good for its customer base and Australians lose their trust on Marks and
Spencer which resulted in decline of sales figures.
Myer, Australia’s largest department store has started its online retailing mode and is
facing difficulties in its online operations. Supply chain and home delivery services are the most
affected ones. Click and collect option is available in some limited (only 4) stores in the entire
country. The consumer behavior and shopping trends as decided by the company has gone wrong
and trading environment cannot be blamed for this. Australian consumers emphasis on value the
most instead of product volume. And here Myer failed due to wrong customer introspection.

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REFERENCES
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