Online shoppers buy more clothing and alcohol, but grocery sales struggle

Australia’s online shoppers are moving beyond traditional purchases such as travel, books and DVDs and are starting to buy more clothing and alcohol, according to a report from Roy Morgan.

Around 6.7 million, or 37.9% of Australians, bought a product or service online in the last 12 months, compared to 34.4% in the previous year.

But the report, found “newer” categories of online purchases, such as clothing and alcohol, experienced significant growth in the number of purchasers.

Yet grocery sales remained steady.

“As we see an increase in the range of products available online together with an increase in the number of people who are comfortable giving their credit card details over the internet, it’s not surprising that so many people have bought something online,” Roy Morgan chief executive Michele Levine told SmartCompany.

“So the question is, why not groceries?”

Levine said that although most purchasers had gotten past the “psychological barrier” of concerns over delivery cost and returns policies, groceries retailers faced barriers in timing their deliveries.

“If people are buying butter and meat, it’s perishable and there are barriers in the cost of technologies like refrigeration and the fact that people may need to plan around delivery times.”

While this remains the main challenge online food retailers face, solutions could include letting customers place orders online and pick them up in person, saving time spent-in store, she says.

Levine says consumers also perceive online grocery purchases as a luxury for the very wealthy.

“They think it’s much more expensive. Currently, the people buying groceries online are very much from the top end of the income scale: double income professionals or executives with two kids who are very cash rich and time poor.”

“If supermarkets can find a way to address this perception, they will be able to tap into a much larger market… the vast majority of people are less wealthy but they are also very busy and tired and could benefit from what logically should be a terrific service.”
Currently, smaller local food retailers such as organic shops and butchers are preferred by online shoppers, she said.

“There is a sort of return to how it used to be in the ‘olden days’ when the milkman delivered to the door… the smaller companies who are smart will take advantage of this.”

In total, almost half of the Australian population – 46.4% – reported at least one online purchase in their lifetime.