Retail is now reported to be at the weakest level since the 1990s recession (ABC, 2019). With weak consumer spending you might think that it isn’t the best time to be starting an eCommerce business.
Retail is reported to be at the weakest level since the 1990s recession. Is this the right time to start an eCommerce business?
Consumer spending accounts for almost two-thirds of Australia’s economic activity – retail is important! The economic perspective is that wage-growth and conservative household spending is responsible for the slump. Recent data highlighting negative growth in retail prompted the government to implement interest rate and tax cuts for economic stimulus, of which hasn’t proved to be working.
Regardless of overall negative growth, online purchases have seen 13% year on year growth across states and territories in both metropolitan and regional areas – 20% is the national average according to Australia Post. Consumer spending suggests a shift from traditional retail to online retail. Worldwide eCommerce sales are projected to reach 6.542 trillion in 5 years time. So perhaps it’s not traditional economic stimulus we need, but a greater focus on eCommerce – digital transformation for retail and the utilisation of new technologies. Traditional retail is bound to suffer with or without government intervention in the market. For eCommerce, the future looks bright for all those who can keep pace. Surging eCommerce is being driven by BNPL (buy now pay later) payment options, marketplaces and sale events.
Marketplace purchases have grown 31.2% year on year. Marketplaces are essential for driving growth in eCommerce. Amazon, eBay, AliExpress, Etsy and Rakuten are examples of global marketplaces that are leading the way.
Sale events have changed traditional sales and marketing dramatically. 2018 for the first time, saw Australia embracing America’s Black Friday and Cyber Monday disrupting our traditional Christmas shopping calendar. Our peak period has shifted to November. Australia also has online sale events such as Click Frenzy that have been inspired by this trend.
How you capitalise on eCommerce trends is becoming increasingly critical for success as consumer spending in retail shifts online. The opportunity of eCommerce that’s being elevated by marketplace platforms, events and payment options that increase consumer purchasing power means that now is a great time for eCommerce. At Workit Spaces we’re looking ahead to give our eCommerce network the technology to innovate and cutting edge capabilities to thrive in the age of eCommerce. We need to be thinking about how we can work together to form our own sale events and platform to capitalise on marketplace trends.