Online Shopping in Australia - PDF

Online Shopping in Australia
With the advancements made in modern technology, Internet is offering more and more
convenience to the people. Therefore, Internet allows a lot of things to be done by the people
without going out of their homes. For example, people can watch movies, paid bills, study online
etc. However, out of all these facilities the most attractive is the facility to shop online. Online
shopping offers several advantages, but as everything has two sides, there are many who believe
that a lot of these advantages are also associated with online shopping. Online retailing has
resulted in a number of changes in the Australian retail trade industry. It represents a shift in the
way transactions are made by the consumers.1 Online shopping industry witnessed a significant
increase during the last five years, and it became the part of mainstream retail industry. The rise
in online shopping has also been fueled by the recent advancements made in the Internet and
broadband penetration along with the acceptance of electronic commerce by the consumers as a
safe and viable alternative to traditional brick-and-mortar stores. Although, there are several who
believe that their market share is difficult in e-commerce, the recent reports revealed that
sufficient growth is being experienced by online shopping and online purchases up by 11.5%.2
The reasons behind the growth of online shopping may be different, but they certainly include
easier comparisons, competitive pricing and the convenience and variety offered by online
1 Liu, C., Arnett, K.P., Litecky, C. (2000) Design quality of Websites for electronic commerce:
Fortune 1000 Webmaster’s evaluations, International Journal of Electronic Commerce & Business
Media, Vol.10, No.2, pp. 120–129.
2 Lundegaard, K M (1997). “New Owner to Streamline Shopping Alternatives.” Washington
Business Journal, http://cgi.amcity/com/washington

shopping. Due to strong brand loyalty and also an increase in the number of sophisticated
consumers, there has been an average increase of 16% in the number of. Parsers that are
generated by each online transaction.3 It has also been suggested that as compared to traditional
retail, the growth in online shopping was 6.9% although the traditional retail sold 2 $61 billion as
against the sale of $18 billion made by e-commerce physical goods. Department and variety
store is the highest category of online shopping. This segment with the 7% growth. Moreover, it
had 30% off the market share and a close second was the fashion segment that had 17% growth
and 22% market share.4 Jointly, these two sectors account for more than half of all the online
shopping.
Online shopping can be described as the process of buying goods and services from merchants
who sell them on the Internet. After the rise of World Wide Web, merchants have tried to sell
their goods to the people who serve on the Internet. Similarly, consumers can visit the online
stores from the comfort of their homes and complete their shopping while sitting in front of their
computer.5 People are attracted to online shopping because it offers several advantages.
Consequently, more and more people, particularly office workers, who cannot find sufficient
time to go for shopping, finding very attractive. Therefore, online shopping provides the most
convenient and effective way of making purchases. In the same way, there are many persons
who opt for online shopping because they just don't like the idea of standing in crowded and
noisy environment.6 However, in case of online shopping, a person simply needs to select the
3 Mahajan, V., Srinivasan, R. (2002). The Dot.com Retail Failures of 2000: Were There Any
Winners?, Journal of the Academy of Marketing Science, Vol 30, No. 4, pp. 474-486.
4 Morganosky, M. and Cude, B. (2000). “Consumer Response to Online Grocery Shopping.”
International Journal of Retail and Distribution Management, Vol. 28, No.1, pp 17-26.
5 Park, K, D Perosio, et al. (1998). What's in Store for Home Shopping. Ithaca, New York, Cornell
University Food Industry Management Program
6 Saga, V.L. and Zmud, R.W. (1994). The Nature and Determinants of It Acceptance, Routinization
and Infusion, IFIP Transaction: Computer Science and Technology, Vol. 45, pp. 67-86

article and then pay for it online. The shopping is finished and the product will be delivered to
the person. For most of the people, shopping is not an anguished and the hard task. They can
remain within the comfort of their home, click on the mouse and within a few minutes they will
get what they want without the need for leaving the comfort of their room or standing in a
queue.7
In this way, we see that online shopping is faster and convenient and it also produces better
deals. The concept of online shopping has been present in Australia for a long time now. Earlier
it was available in the form of television infomercials and commercial catalogs. However, the
concept of home shopping did not achieve the status of such a widespread phenomenon until the
arrival of Internet. As a result of the vast potential of the Internet, which was not present in the
Internet technologies, online shopping has become an integral part of the people of Australia.8
Moreover, it has also been adopted by almost all major brick-and-mortar retailer in Australia. At
the same time, Internet shopping is also provided a competitive edge to certain companies
because this type of shopping allows them to get rid of intermediaries and they can directly sell
their products to the customers.
Price: there are high chances that better prices may be offered to the consumers on the Internet as
compared to the shopping malls.9 There are a lot of Internet companies that operate as online
7 Selz, D., and Schubert, P. (1997). Web Assessment – A Model for the Evaluation and the
Assessment of Successful Electronic Commerce Applications, the International Journal of Electronic
Commerce and Business Media, Vol. 7, No. 3, 1997, pp. 46-48
8 Schubert, P., and Selz, D. (2000). Measuring the Effectiveness of Electronic Commerce Websites
with the Web Assessment Method, in: Hunt, B. (ed.), E-Commerce and V-Business, London:
Imperial College, 2001
9 Schuster, A and Sporn B. (1998). “Potential for Online Grocery Shopping in the Urban Area of
Vienna.” Journal of Electronic Market, Vol. 8, No. 2

retailers only. This means that these companies are not required to pay to the intermediaries like
the distributors. Similarly, these companies are not required to hire people specializing in sales.
Hence, some of the savings can be passed by these companies to the consumers as they offer
reduced prices. Similarly, then it also allows the consumers to compare the prices of a particular
product instantly.10 Therefore they can buy their product from the retailer, who is offering the
lowest prices. Internet companies are also aware of this situation therefore be price their goods
competitively. Similarly, the companies get a larger audience for their products online.
Therefore, generally they put clearance products on sale, and also offered good deals so that they
make clear their inventory faster. The customers are also able to save on taxes, in case of online
shopping because tax is apply only if the online retailer is operating in the same state as the
customer.
On the other hand, high costs have to be borne by shopping mall retailers. Not only they are
required to invest in physical property, but these retailers also have to hire salespeople and other
stuff. Moreover, they have limited audience, confined to the number of visitors in the shopping
mall. Therefore they are under pressure to generate higher sales per customer. This means higher
prices on the average. At the same time, it is more expensive for the visitors to compare prices in
terms of cost and time. And as a result, it has been seen that the. Customers purchasing in the
shopping mall are at a disadvantage.
Variety: the consumers unable to find a large variety of products on the Internet as compared to
the physical retailers.11 The reason is that shopping mall stores have limited variety of products,
in view of the restricted space available. On the other hand, this constraint of space is not present
10 Barnes, S. J. and Vidgen, R. (2001) An Evaluation of Cyber-Bookshops: The WebQual Method,
International Journal of Electronic Commerce, Volume 6, Number 1, Fall 2001.
11 Barnett, M. and Alexander P. (2003). Can e-Grocers Survive the Last Mile., 4th International We-B
Conference, Perth, Western Australia.

in case of online shopping websites. The o storage space on the Internet can be easily expanded
and it is quite cheap. Therefore, online shopping websites can list, much more items as compared
to the physical retailers. Apart from it, it is much easier to move from one website to the other as
compared to moving from one physical store to the other.12 All the websites that are available on
the Internet can be accessed instantly, while a shopping Mart will have limited number of stores,
stalking the product that the consumer is looking for. Due to, this isn't generally the physical
stores mainly keep the products that are in high demand. On the other hand, as space constraints
are not present in case of online websites, they generally list their whole inventory. Perhaps this
is the reason that most of the physical retailers are also operating websites that list all the store
inventories online.
Internet has also allowed consumers to make purchases on international websites that stop local
products.13 On the other hand, foreign products cannot be generally found in most of the
shopping malls. The reason is that the level of demand for such products does not justify the
stocking of these products. Even the international retailers operating in Australia also mostly
stopped the local products to fulfill the domestic taste of the consumers. However, international
boundaries do not limit the Internet. Therefore in this case, it is possible for consumers to
purchase products from other countries without actually having the need for going there.
But it needs to be mentioned that there is several legal obligations imposed on online retailers.
These legal obligations have been designed to protect businesses and customers.14 The first such
legal regulation is related with privacy. Therefore the law provides that if big business saves the
12Belsie, L. (1998). A Mouse in the Bakery Aisle? The Christian Science Monitor,
http://www.csmonitor.com. 2001.
13 Bulkeley, W., Carlton, J. (2004) E-Tailers Who Misjudged the Web are Paying for it, in: The Wall
Street Journal
14 Chaffe, E.E. (1985). Three Models of Strategy, Academy of Management Review, 10, pp. 89-98

personal information and content of the consumers, the businesses required by the Privacy Act,
1988 to make the customers aware of the information that is being collected by the business.
Therefore the businesses required to clearly explain how the information is going to be used.
Another such legal obligation is related to intellectual property. Online retailers may have to deal
with intellectual property issues, while running their business online. These include potential
claims for copyright or trademark infringements.15 The patents are granted by IP Australia which
also registers designs and trademarks and provides protection in case of intellectual property.
Therefore, while establishing the online business, it may be useful to consult IP Australia, which
can help the business in finding its IP rights and obligations.
Spam is the name given to electronic junk mail. Spam is used for sending bulk, unsolicited,
promotional e-mails indiscriminately to large number of e-mail accounts or mobile phone
numbers. However it can be inconvenient and the costly nuisance for the business. According to
the Spam Act, 2003 it has been provided that it is illegal for the business to send unsolicited
commercial electronic messages.16 Therefore, in order to make sure that the business remains
within the provisions of law, it is necessary to follow the three points mentioned below:
Consent: the business should have the consent of sending messages to the contracts.
Identify: the business is required to provide clear and accurate information regarding the
business which includes the information regarding the party sending a message and how such
party can be contacted.
15 Davis, F.D. (1989). Perceived Usefulness, Perceived Ease of Use and User Acceptance of
Information Technology, Management Information Systems
16 Davis, F.D. (1993) User Acceptance of Information Technology: System Characteristics, User
Perceptions and Behavioural Impacts, International Journal of Man-Machine Studies, Vol. 38, No. 3.

Unsubscribe: unsubscribe facility should also be included so that the recipients may opt out of
receiving the message.
Electronic transactions: a major difference is not present between electronic and other
transactions. Consequently, the same laws are applicable in case of the transactions that have
been made on a website as compared to the damages that have been made at the supermarket.
The Electronic Transactions Act, 1999 (Cth) also requires that the electronic or digital signatures
can be used in place of handwritten signature. Similarly a contract can also be created
electronically and the law also allows the parties to keep record of transactions and other
information.
Advantages and disadvantages of online shopping: As is the case with most of the online
activities, certainly there are trade-offs present in online shopping between cost-saving,
convenience, choice and privacy.17 In this part of the assignment, the advantages and
disadvantages of online shopping will be discussed briefly. First of all the advantages of online
shopping include the following:
Convenience: Convenience is one of the most significant benefit present in case of online
shopping. Therefore in this case a person can buy almost anything without leaving the comfort of
their home. Moreover, online retail stores are open 24 hours, and they can be accessed from any
17 Davis, F.D., Bagozzi, R.P. and et al. (1989). User Acceptance of Computer Technology: A
Comparison of Two Theoretical Models, Management Science, Vol. 35, No. 8.

location where there is a stable Internet connection available. These days, a lot of people are
involved in online shopping from their smart phones.
Selection: generally, the online stores are able to provide more variety to the consumers as
compared to the traditional brick and mortar stores. As the online stores are not required to
attractively display all the products on the shelves, it is possible for them to maintain a larger
amount of inventory.18 At the same time, this situation also allows the online retail stores to have
a small amount of each item because they are not required to display them and they can order
more products from this supplier as and when required.
Information: it has been seen that online retailers provide more information to the consumers
regarding the items that are offered for sale as compared to physical store. In case of a brick and
mortar store, generally information is provided only if the consumer asked the sales associate.
However, in case of online shopping the product description generally includes a description
from the manufacture. There is another description by the vendor, mentioning the particular
technical and size details. At the same time there are reviews from professional journals and
magazines.19 The reviews of the people who had earlier purchase a product can also be seen. For
example, the online bookstores generally have the excerpts of the books for the customers to
read. With the availability of all such information, the consumers become informed consumers
that they are not required to perform any extra research before purchasing the product.
18 Freeman, M. (2003). The Current State of Online Supermarket Usability in Australia. 14th
Australasian Conference on Information Systems, Perth, Western Australia.
19 Hiser, J., Nayga, R. M., and Capps, O. Jr. (1999). “An Exploratory Analysis of Familiarity and
Willingness to Use Online Food Shopping Services in a Local Area of Texas.” Journal of Food
Distribution Research, Vol. 30, No. 1, pp. 78-90.

Prices: Due to the reason that online stores are not required to pay rent for a storefront located in
a nice neighborhood of the town and had the same time, they tend to sell much larger quantities
of products, these tools are in a position to sell products at much lower prices. There are even
some sites that only offer clearance items to the consumers. However, the consumers should be
aware of the fact that buying online. Does result in taking away from the local business therefore,
this consideration should always be kept in mind.
As mentioned above, while there are a lot of benefits available in case of online shopping, but it
needs to be noted that certain disadvantages are also associated with online shopping.
Hands-on inspection: The online stores cannot replace the fact that they cannot provide the
experience of actually seeing and testing a particular product that the consumer is thinking of
buying. One example, the shopping of clothes can be very tricky for the consumers who are
making the purchase online.20 The reason is that in this case, they cannot try the clothes before
the purchase them. At the same time, it is possible that there are certain small details that the
consumer feels. They don't like in a product, but that cannot be noticed until the product is in the
hands of the consumer.
Shipping: these are some of the major online retailers are offering free shipping for the products.
However a lot of online retailers require the consumers to make a minimum order cost so that the
consumers may qualify for free shipping or the facility of free shipping is offered to the
consumers only during certain parts of the year. Therefore, generally the consumers should
expect that they will have to pay the additional cost of shipping. Along with the price of the
product purchase by them. Particularly in case of larger items like furniture, this cost of shipping
20 Keil, M. (1991). Managing MIS Implementation: Identifying and Removing Barriers to Use,
Harvard University.

can be considerable. Moreover, if the consumer has decided that they don't like the product, the
consumer will be required to pack up the product again and take it to the post office so that we
may be returned. While there are certain online retailers who offered free returns of the products
but there are certain who need the consumers to pay for return postage. In such a case even if the
consumer have decided against keeping the item, the consumer may still have to pay several
dollars as the cost of shipping.
Wait time:. Another disadvantage associated with online shopping is the fact that the consumers
may have to wait for the delivery of their products. While a significant measure of shopping at a
brick and mortar store is instant gratification, the consumer sees something they like, they pay
for it and then they take it home and use it. However, when the product is purchased through
online shopping the consumer may have to wait for many days or even weeks for the arrival of
the product at their doorstep. Particularly in cases of a time crunch, the consumer may wish they
would have purchased the product from the local retailer.
Privacy: when the consumer makes a purchase online, there's a certain privacy rights to the
online retailer. As a result, the online retailers can track the purchase is made by the consumer
over time.21 In order to provide more suggestions of the things that the consumers may like to
buy, to send e-mails to the consumers containing sale information and sometimes the retailers
may sell the contact information to other companies. Although the same thing is also being done
by certain brick and mortar stores, tracking information of the consumers through their credit
card, but it is much difficult for the traditional stores into this. The reason is that sometimes the
21 King, N. (1990). Innovation at Work: The Research Literature, Innovation and Creativity at Work,
M.A. West and J.L. Farr, Chichester: Wiley, 15-80.

consumers may pay through cash or they may refuse to give their e-mail address. As compared
to this situation, when a purchase is made through online store, the consumer may sign away
certain privacy rights. Due to this reason, it is always a good idea to read the Terms of Service of
the online store.
All companies, including online retailers are required to comply with the Australian Consumer
Law (ACL). However, it is a fact that it can be difficult for the consumers to obtain a remedy,
particularly when the purchase has been made online and from overseas seller.22 In such cases,
the best way to protect the consumer is to be aware of their rights, and only to deal with
trustworthy sellers.. It has been mentioned by a 2017 NSW Fair Trading survey that nearly half
off the Australians buying goods online from overseas sellers face some problems in these
transactions. The main issues faced by the consumers include the products arriving late or not
arriving at all or the product received by the consumer is different from the product that was
advertised. Similarly, 12.8% respondents claimed that they have received a faulty product while
making online purchase from overseas seller. In this regard, the Australian Competition
andConsumer Commission has received around 20,000 complaints related with consumer
guarantees in 2016. One out of five persons was not aware that there are certain rights, while
making an online purchase as in case of brick and mortar store.23 In this way is significant gap is
present between the roles of Australian Consumer Law and what is happening in practice.
The result is that ACCC is cracking down on the overseas companies that are not following the
provisions of the ACL. For example, in December 2017, online electronics retailers BXT
22 Kinsey, J and Senauer B (1996). “Consumer Trends and Changing Food Retailing Formats.”
American Journal of Agricultural Economics, Vol. 78, No. 5, pp. 1187-91.
23 Kurnia, S. (2003). Online Grocery Shopping in Australia. The International Telecommunications
Society Asia-Australasian Regional Conference, Perth, Australia

International and TCF Global admitted that they have breached the provisions of ACL and
provided court enforceable undertakings to the Commission. These retailers have advertised
certain products like mobile phones and their lives as being new, but in reality the products were
refurbished. BXT International was also rebuked as it had informed the consumers that the
company is not bound by the ACL as it is based the overseas.24 Therefore, the ACCC believes
that such proceedings and the considerable penalties imposed in these cases should send a strong
message to all online retailers operating overseas that they are required to comply with the
Australian Consumer Law while they are selling products to consumers in Australia. The ACCC
reaffirms its conviction to take action so that the consumers in Australia achieved the benefit
provided by the consumer Law guarantees, irrespective of the fact that the business selling the
product is based in Australia or overseas.
Therefore in order to comply with ACL, it is necessary that the goods should be a perceptible
quality, matched the description, fit for purpose and match the sample or demonstration model.
Similarly,. It is also necessary that the goods should be supplied with undisturbed possession.
The goods should come with full title and ownership. It is also necessary that the goods should
fulfill any promises made regarding condition, performance and quality like money back offers
and lifetime guarantees.25 If these conditions are not fulfill by the goods, the consumers are
entitled to a refund, replacement, repair or compensation. The remedies available to the
consumers depends on the fact is the product has major or minor failure. However, briefly
speaking, the best way in which the consumers can protect themselves is by dealing with
suppliers that can be trusted and checking the retailer by looking for online reviews. The
24 Kurnia, S. and J. A.-W. Chien (2003). The Acceptance of the Online Grocery Shopping. The 16th
Bled Electronic Commerce Conference, Bled, Slovenia.
25 Kutz, K. (1998). Online Grocery Shopping on Track for Rapid Growth, Andersen Consulting News
Release (online). http://www.shoplink.com., last accessed March 2001.

consumers can also search the complaints registers that are available on the websites of
consumer protection organizations and in this way they will come to know what they should
avoid. Similarly, the consumers should be aware of the retailer websites. These websites also
look like the general online retailers websites. Sometimes they can be so convincing that the
consumers wouldn't know if it is not the genuine website until they have paid on it. 26 The
consumers are asked to be in the usual way, for example using a debit card or wire transfer.
However, the consumers they should not pay on such websites.
26 Liebmann, W. (1998). The Consumer Paradox. Strategic Retail. New York, NY.

Bibliography
Barnes, S. J. and Vidgen, R. (2001) An Evaluation of Cyber-Bookshops: The WebQual Method,
International Journal of Electronic Commerce, Volume 6, Number 1, Fall 2001.
Barnett, M. and Alexander P. (2003). Can e-Grocers Survive the Last Mile., 4th International
We-B Conference, Perth, Western Australia.
Belsie, L. (1998). A Mouse in the Bakery Aisle? The Christian Science Monitor,
http://www.csmonitor.com. 2001.
Bulkeley, W., Carlton, J. (2004) E-Tailers Who Misjudged the Web are Paying for it, in: The
Wall Street Journal
Chaffe, E.E. (1985). Three Models of Strategy, Academy of Management Review, 10, pp. 89-98
Davis, F.D. (1989). Perceived Usefulness, Perceived Ease of Use and User Acceptance of
Information Technology, Management Information Systems
Davis, F.D. (1993) User Acceptance of Information Technology: System Characteristics, User
Perceptions and Behavioural Impacts, International Journal of Man-Machine Studies, Vol. 38,
No. 3.
Davis, F.D., Bagozzi, R.P. and et al. (1989). User Acceptance of Computer Technology: A
Comparison of Two Theoretical Models, Management Science, Vol. 35, No. 8.
Freeman, M. (2003). The Current State of Online Supermarket Usability in Australia. 14th
Australasian Conference on Information Systems, Perth, Western Australia.
Hiser, J., Nayga, R. M., and Capps, O. Jr. (1999). “An Exploratory Analysis of Familiarity and
Willingness to Use Online Food Shopping Services in a Local Area of Texas.” Journal of Food
Distribution Research, Vol. 30, No. 1, pp. 78-90.

Keil, M. (1991). Managing MIS Implementation: Identifying and Removing Barriers to Use,
Harvard University.
King, N. (1990). Innovation at Work: The Research Literature, Innovation and Creativity at
Work, M.A. West and J.L. Farr, Chichester: Wiley, 15-80.
Kinsey, J and Senauer B (1996). “Consumer Trends and Changing Food Retailing Formats.”
American Journal of Agricultural Economics, Vol. 78, No. 5, pp. 1187-91.
Kurnia, S. (2003). Online Grocery Shopping in Australia. The International Telecommunications
Society Asia-Australasian Regional Conference, Perth, Australia
Kurnia, S. and J. A.-W. Chien (2003). The Acceptance of the Online Grocery Shopping. The
16th Bled Electronic Commerce Conference, Bled, Slovenia.
Kutz, K. (1998). Online Grocery Shopping on Track for Rapid Growth, Andersen Consulting
News Release (online). http://www.shoplink.com., last accessed March 2001.
Liebmann, W. (1998). The Consumer Paradox. Strategic Retail. New York, NY.
Liu, C., Arnett, K.P., Litecky, C. (2000) Design quality of Websites for electronic commerce:
Fortune 1000 Webmaster’s evaluations, International Journal of Electronic Commerce &
Business Media, Vol.10, No.2, pp. 120–129.
Lundegaard, K M (1997). “New Owner to Streamline Shopping Alternatives.” Washington
Business Journal, http://cgi.amcity/com/washington
Mahajan, V., Srinivasan, R. (2002). The Dot.com Retail Failures of 2000: Were There Any
Winners?, Journal of the Academy of Marketing Science, Vol 30, No. 4, pp. 474-486.
Morganosky, M. and Cude, B. (2000). “Consumer Response to Online Grocery Shopping.”
International Journal of Retail and Distribution Management, Vol. 28, No.1, pp 17-26.

Park, K, D Perosio, et al. (1998). What's in Store for Home Shopping. Ithaca, New York, Cornell
University Food Industry Management Program
Saga, V.L. and Zmud, R.W. (1994). The Nature and Determinants of It Acceptance,
Routinization and Infusion, IFIP Transaction: Computer Science and Technology, Vol. 45, pp.
67-86
Schubert, P., and Selz, D. (2000). Measuring the Effectiveness of Electronic Commerce
Websites with the Web Assessment Method, in: Hunt, B. (ed.), E-Commerce and V-Business,
London: Imperial College, 2001
Schuster, A and Sporn B. (1998). “Potential for Online Grocery Shopping in the Urban Area of
Vienna.” Journal of Electronic Market, Vol. 8, No. 2
Selz, D., and Schubert, P. (1997). Web Assessment – A Model for the Evaluation and the
Assessment of Successful Electronic Commerce Applications, the International Journal of
Electronic Commerce and Business Media, Vol. 7, No. 3, 1997, pp. 46-48