Pandemic rises for online shopping; buy now pay later may stick

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Nearly a third of Australians will never again shop the way they did before COVID-19, according to a survey from Cashrewards.

The Cashrewards On-line Shopping Survey analysed current shopping habits and future intentions. Cashrewards spokesperson Bernard Wilson said female seniors, though reluctant to embrace online shopping, “increased their tendency to shop online more than any other group”.

“They still strongly prefer to touch and try items before they buy them and they have more time on their hands, so convenience is much less a drive for them than the ongoing threat of COVID-19 should it become a seasonal threat,” said Mr Wilson.

Australian ecommerce spending increased 29 per cent from March to April this year when lockdowns began, reported adnews.com.au. It confirmed that there were over 200,000 new online shoppers in April 2020 and more than a third of them purchased items online more than once.

The Conversation reported that in April online sales made up 11.1 per cent of all physical retail sales, compared with 7.1 per cent in March 2019.

Prior to the pandemic, Australians preferred “bricks and mortar” shopping rather than waiting for deliveries. But the pandemic has changed everything, with 30 per cent of 1200 consumers surveyed in September saying they’ll never return to their previous shopping patterns. Popular reasons for continuing to shop online included ease in price comparison (76.2 per cent), convenience (68.9 per cent) and not missing out on coupons and cashback offers (33 per cent).

A stunning 68 per cent of consumers intend to use new brands and retailers they engaged with online during the pandemic.

“Some groups of shoppers, particularly busy mums and younger and middle-aged men buying bigger items like tech, sports and outdoor goods, have really enjoyed the benefits of increased online shopping during COVID-19 and they are most likely to continue their higher levels of online shopping,” said Mr Wilson.

The survey revealed that 85 per cent of Australians will be avoiding “unnecessary public place shopping” while the pandemic continues.

More than half of Australian shoppers are still avoiding physical stores (57 per cent), suggesting it will take more than the removal of lockdowns to rebuild consumer confidence in shopping at stores.

But many retailers are embracing opportunities offered by the changes.

“A number of retailers have made once-in-a-generation investments in their online shopping and delivery capabilities, which have transformed convenience for customers. Whatever their motivations, whether positive or due to ongoing COVID-19 concerns, it seems clear that Australians have experienced a permanent shift to online shopping,” said Mr Wilson.

Jamarr Mills, head of business planning at Essence, agrees. He told Adnews that despite the pandemic-created recession, this is an “exciting time for business” because the growth in ecommerce has caused “an influx of new customers, new product category insights and new purchase behaviour data”.

“No matter how retailers return, ecommerce will have more value for businesses and consumers post-lockdown than before.”

Online shopping during the pandemic fuelled a huge rise in the use of buy now, pay later (BNPL) services such as Afterpay and Zip, which were preferred to credit cards (down 7 per cent) and cash (down 37 per cent).

“Afterpay enjoyed its best-ever quarter as locked-down shoppers flocked to alternative payment services during the pandemic,” The New Daily reported. 

Australians bought $2 billion of the $3.8 billion of goods and services purchased with Afterpay in the three months to the end of June. That was a 127 per cent sales increase on the same period last year.

Afterpay customers bought home, entertainment, and fitness-related goods at the onset of the pandemic, furniture and home office supplies in April and clothes and jewellery in May.

Sally Tindall, research director for consumer comparison site RateCity, said Australians preferred BNPL services because of their interest-free repayments.

“Platforms such as Afterpay have been an extremely attractive choice for younger Australians who are wary of credit cards,” she told The New Daily.

“With no complicated sign-up process, no interest charged and no fees to pay if you meet your instalments, these platforms are likely to keep on growing.”

A Credit Simple survey found 36 per cent of respondents were using BNPL for the first time during the pandemic, and 64 per cent said they would continue using BNPL services after the pandemic.

Many categories previously underrepresented in online purchases have boomed during the pandemic. There was a 600 per cent increase in spending on sporting goods in March, when social isolation measures kicked in. The big rises in April were consumer electronics (up 108 per cent), home improvement (up 76 per cent), and beauty and personal care (up 45 per cent).

Have you shopped more online since the pandemic?

Will you go back to shops as much once the pandemic is under control?

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Written by Will Brodie

8 Comments

Total Comments: 8
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    0

    The problem I’ve found living in regional Qld is that since the Pandemic the local chain stores don’t have the stock, or the size, colour that I want. This has forced me into purchasing online. Even for basic items. You might wait a few days for delivery but it saves me going into the shops who seem to just be stocking their warehouses with the full range. They have made returns much easier too. I use PayPal which is very safe

    • 0
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      The lack of stock is a nationwide issue Sundays even in metropolitan Sydney and continues to be so. All due to the fewer planes and container ships arriving from overseas. It is a tangible example of how much Australia relies on overseas manufacturers.

  2. 0
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    I have shopped less in total since covid.Online shopping has been zero.I do look forward to spending the money I have saved once retail is back in full swing.

  3. 0
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    Just or the record I’m shopping just the way I did before and during covid19.

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      I am the same, Mark. I shall continue exactly as I was doing before and I do my shopping with cash as long as it is possible. Had a power failure this morning and because I had the cash in my pocket I was able to do my purchases. ATMs were dead and most of the shops were closing. Convenience is good but necessity dictates!

  4. 0
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    I was already shopping on like of groceries before the pandemic because of a back injury. I like it but its not perfect. Its easy to get the wrong size. I would never buy clothes on line because you cane really tell the material or what an item will look like when you put it on.

  5. 0
    0

    I get my supermarket groceries delivered once a week – it’s a great saving in time and effort. I shop for one or two extra food items or fruit that I want to choose myself about once a week. My DH buys his basics from UNIQLO on line. I’ve found an on line clothes shop and a shoe shop on line where I am a perfect fit for their sizes. I buy bed linen, hats, gloves, small hardware items, furniture, carpets, perfume, non-prescription pharmacy goods etc. etc. all on line. No going back to dragging around the shops for me. Now, I always check on line first for any item I may need. However, you can’t replace the garden centre for browsing although I have successfully purchased plants on line.


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