Home Strategy Online sales catching on with Aussie consumers as more SMBs embrace e-commerce

Online sales catching on with Aussie consumers as more SMBs embrace e-commerce

Online sales of products and services in Australia are increasing, with more than half of the country’s small and medium sized businesses now using e-commerce, according to newly published research from Sensis.

The research reveals that 54% of SMBs are now using e-commerce, with 95% making most of their online sales to customers in Australia.

The study surveyed 1000 Australian small and medium businesses and 800 Australian consumers about their online experiences and found that more than 7 in 10 Australians (71%) made purchases online this year, up 10 percentage points from last year.

“For those using e-commerce, online sales have grown from 32% to 43% of their total sales over the past four years. And while a quarter are selling to overseas customers, only 2% are making most of their sales to this group,” says Sensis commercial director Rob Tolliday.

“Selling online has become increasingly important as fewer shops have a physical store front and those that do have to battle with major overseas retailers who have landed in the key shopping strips.”

Sensis says that, overall, the most popular items bought online are airline tickets (up from 47% to 53%), clothing, accessories or shoes (up from 51% to 57%) and hotel reservations (up from 47% to 53%), with the average consumer spending $3300 for the year (down from $4400).

“While sites such as Amazon offer consumers more choice, the falling Aussie dollar has seen overseas purchases remain steady, with less than a quarter of online purchases being made on overseas sites,” Tolliday said.

And, Sensis says that more transactions are occurring online, but businesses and consumers remain concerned about hacking – with 69% of businesses and 85% of consumers worrying someone might interfere with their online transactions.

“We’ve all had a Nigerian Bank offer us a large sum of money in exchange for personal details and the issues with the recent census no doubt increased people’s concern about the safety of their information online. Businesses using e-commerce need to ensure their online sales environment is trustworthy and legitimate,” Tolliday warns.

Other key findings from the 2016 Sensis eBusiness report are:

•    More than six in ten (61%) small and medium businesses now have a website (up from 56%), and 43% of those are optimised for mobile devices (up from 35%);

•    Almost six in ten (59%) believe it is important to be on page one of a Google search (up from 46%);

•    Only 19% of businesses have a digital business strategy (up from 17); and

•    Expenditure on software and hardware was down from $9830 to $9111 last year, with expectations it will fall further to $8342 this year.

According to Sensis, of those businesses that don’t have a mobile friendly website almost two thirds have no plans to upgrade.

“This is a risky strategy, given Google’s search algorithm preferences mobile friendly sites and customers now expect a seamless digital experience on any device,” Tolliday says.

“Businesses not already online often feel overwhelmed and aren’t sure where to start. The best thing to do is to create a simple digital business strategy. This will help them choose the right products and services to target their customers, while only spending what they can afford.

“While your website can be a crucial destination for your customers, not all businesses have one. Of those businesses without a Web presence, almost one in five are listed in a directory, some are featured on third party websites and others are on social media. So your strategy can be tailored to your budget and marketing priorities,” Tolliday concludes.

Sensis offers five reasons why it says businesses need to optimise their website for mobile devices:

1.    Customers now spend most of their time on mobile devices

The Sensis survey found that 78% of Aussies now own a smartphone, and 73% use it to search the internet. Consumers expect a seamless digital experience on their mobile and if they don’t get it from your site, they will bounce to one of your competitors

2.    Search Engine Optimisation

Almost six in ten businesses surveyed said that being on page one of a Google search is important. Therefore, Search Engine Optimisation (SEO) is crucial and Google now preferences sites optimised for mobile in its search results

3.    Social platforms are preferencing sites that load quickly

Facebook recently announced it will push websites with slow times to the back of queue on its platform. Their research shows that 40% of users leave a site after a single click, frustrated by sites that take longer than three seconds to load

4.    There is no point advertising on mobile if your site isn’t up to scratch

Around a third of SMBs now advertise online (32%), with a similar number advertising on social networks (34%). While digital advertising is a great way to reach your customers, there is no point advertising online if you are driving customers to a website that is not up to scratch

5.    It’s probably cheaper and easier than you think

The average SMB only spent $3,300 last year building and maintaining their website. And you can get a new, fully optimised website for even less than that. Given the impact of not upgrading, it’s an investment every business needs to make.

This table shows the growth in the use of ecommerce by small business:

Proportion of SMBs using online marketing services
2015 2016
Website 56% 61%
Social media advertising 31% 34%
Digital display advertising 35% 32%
Search Engine Optimisation (SEO) 28% 32%
Search Engine Marketing (SEM) 18% 16%
App 6% 7%

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).