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SAMPLE: State of
Ecommerce in
Australia and New
Zealand
in association with hybris software
Published April 2014
All rights reserved. No part of this publication may be
reproduced or transmitted in any form or by any means,
electronic or mechanical, including photocopy, recording
or any information storage and retrieval system, without
prior permission in writing from the publisher.
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Contents
1. Foreword by hybris software ........................................... 4
1.1.
About hybris software ................................................................. 5
2. Methodology and Sample ................................................ 6
2.1.
2.2.
2.3.
Acknowledgements ..................................................................... 7
About Econsultancy .................................................................... 7
About the author ......................................................................... 8
3. Ecommerce Landscape .................................................... 9
3.1.
3.2.
3.3.
Market value and growth ............................................................ 9
Consumer behaviour ..................................................................14
Mobile commerce ....................................................................... 15
4. Key Players ......................................................................17
4.1.
4.2.
B2C..............................................................................................18
B2B............................................................................................. 20
5. Trends and Developments ............................................. 22
5.1.
5.2.
5.3.
5.4.
5.5.
The retailer mindset shift .......................................................... 22
Multichannel commerce moves to the forefront ...................... 28
Showrooming: threat or opportunity? ...................................... 30
Delivery and fulfilment still seen to hinder the industry .......... 31
B2B commerce in ANZ .............................................................. 32
6. Strengths, Weaknesses, Opportunities and Challenges
(SWOT) .......................................................................... 34
6.1.
6.2.
6.3.
6.4.
Strengths .................................................................................... 34
Weaknesses................................................................................ 34
Opportunities ............................................................................ 35
Threats ....................................................................................... 36
7. Recommended Resources.............................................. 38
8. Appendix ........................................................................ 39
8.1.1. Type of ecommerce technology ............................................. 39
8.1.2. Ownership and decision-making ........................................... 41
8.1.3. Respondent profiles ............................................................... 42
State of Ecommerce in Australia and New Zealand in association with hybris software
Page 3
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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2014
1.
Foreword by hybris software
We’re pleased to present this report from Econsultancy, commissioned by hybris software, an SAP
company, on the state of ecommerce in Australia and New Zealand. The first of its kind in the
region, we have commissioned this research to further understand the state of ecommerce in
Australia and New Zealand, for both B2C and B2B organisations. We wanted to explore what is
being done well, and what the challenges and growth opportunities are for those businesses trying
to build and execute on an ecommerce strategy.
One of the biggest influencers of the global growth of ecommerce has arguably been mobile
technology and Australia and New Zealand are no exception to this. Indeed, Australia has the
highest smartphone penetration in the world. It comes as no surprise (but some relief) that the
research found that a mobile-optimised transactional website was top of businesses’ wish lists in
2014.
Domestic B2C commerce sites in Australia and New Zealand are increasing at a significant rate
and it’s now becoming widely acknowledged that a market which has historically been berated to
be slow to adopt ecommerce is now surging into a new era of maturity. However, a significant
amount of revenue is still going overseas.
B2B commerce has certainly not taken off in the same way B2C has in the region, but we expect
this to grow dramatically over the next 12-24 months. Two factors are driving this – first, cost
pressures are forcing organisations to find ways to streamline operations, reduce expenses and
drive a more profitable customer. Second, as business buyers are demanding a more personalised,
seamless shopping experience when making purchases on behalf of their companies, suppliers
must take action to cater for this phenomenon known as the “consumerisation of B2B commerce”
or risk losing out to companies that are faster and easier to do business with.
Customers do not think in terms of individual channels, but interact with their favourite brands
and suppliers across multiple touch points. Providing a consistent experience across all of these is
critical as customers want to interact with companies whenever and however it suits them. Only
organisations that make it easy for customers to do business with them, regardless of whether
they operate B2C or B2B, will survive.
This is an exciting time for ecommerce in Australia and New Zealand as organisations identify
new opportunities and forge new competitive advantages. I do hope you enjoy reading this report
and find it as insightful as we have.
Graham Jackson
Senior Vice President – APJ & China
hybris software
State of Ecommerce in Australia and New Zealand in association with hybris software
Page 4
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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2014
1.1.
About hybris software
hybris software, an SAP Company, helps businesses around the globe sell more goods, services
and digital content through every touch point, channel and device. hybris delivers
OmniCommerce™: state-of-the-art master data management for commerce and unified
commerce processes that give a business a single view of its customers, products and orders, and
its customers a single view of the business.
hybris’ omnichannel software is built on a single platform, based on open standards, that is agile
to support limitless innovation, efficient to drive the best TCO, and scalable and extensible to be
the last commerce platform companies will ever need. Both principal industry analyst firms rank
hybris as a ‘leader’ and list its commerce platform among the top two or three in the market. The
same software is available on-premise, on-demand and managed hosted, giving merchants of all
sizes maximum flexibility.
Over 500 companies have chosen hybris, including global B2B sites W.W.Grainger, Rexel,
General Electric, Thomson Reuters and 3M as well as consumer brands Toys“R”Us UK, Lorna
Jane, General Pants, Target Australia, Bridgestone, Levi's, Nikon, Galeries Lafayette, Migros,
Nespresso and Lufthansa.
hybris is the future of commerce™. For more information, visit www.hybris.com.
State of Ecommerce in Australia and New Zealand in association with hybris software
Page 5
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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2014
2.
Methodology and Sample
The aim of this research was understand how ecommerce is evolving in Australia and New
Zealand, looking at key trends and developments, region-specific issues, as well as exploring the
opportunities and challenges.
The methodology involved three main phases:
 Phase 1: desk research to identify relevant issues, examples and trends.
 Phase 2: a series of in-depth interviews with a range of digital marketing and ecommerce
practitioners.
 Phase 3: an online survey of client-side (in-house) organisations and agencies, vendors or
consultancies (supply-side), designed to better quantify feedback around some key questions.
Three in five (61%) survey respondents work for client-side organisations, whilst 39% work for
agencies, vendors or specialist consultancies. For more detailed profiling of respondents, see
Section 8.1.3.
When asked to describe their business, two-thirds (66%) of respondents said they transact both
online and offline, while just over a quarter (28%) of respondents only transact online.
Company respondents
Figure 1: How would you best describe your business?
Respondents: 122
State of Ecommerce in Australia and New Zealand in association with hybris software
Page 6
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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2014
2.1.
Acknowledgements
Econsultancy would like to thank the following people for their contributions to this report:
 Nick Mead, Country Manager ANZ, Hewlett Packard Snapfish Division
 Lawrence Ladomery, Online Marketing Manager, QSR International
 Iain Johnston, Managing Director, Carnegie Group
 Caroline Everitt, Ecommerce Manager, Devonport Chocolates
 James Payne, e-Business Strategy and Development Manager, Coca-Cola Amatil
 Adrian Bortignon, Managing Director, Kongo Group
 Peter Noble, CEO, Citrus
 Chris Vincent, GM, Asia Pacific, Practicology
 Matt Hampshire, CEO, contiigo
2.2.
About Econsultancy
Econsultancy’s mission is to help its customers achieve excellence in digital business, marketing
and ecommerce through research, training and events.
Founded in 1999, Econsultancy has offices in New York, London and Singapore.
Econsultancy is used by over 600,000 professionals every month. Subscribers get access to
research, market data, best practice guides, case studies and elearning – all focused on helping
individuals and enterprises get better at digital.
The subscription is supported by digital transformation services including digital capability
programmes, training courses, skills assessments and audits. We train and develop thousands of
professionals each year as well as running events and networking that bring the Econsultancy
community together around the world.
Subscribe to Econsultancy today to accelerate your journey to digital excellence.
Call us to find out more:
 New York: +1 212 971 0630
 London: +44 207 269 1450
 Singapore: +65 6809 2088
Other related Econsultancy content
State of Digital Marketing in Australia
https://econsultancy.com/reports/digital-marketing-australia
Australia User Experience Report
https://econsultancy.com/reports/australia-user-experience-report
Australia Cross-Channel Marketing Report
https://econsultancy.com/reports/australia-cross-channel-marketing-report
State of Ecommerce in Australia and New Zealand in association with hybris software
Page 7
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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2014
2.3.
About the author
Jake Hird is currently the Strategy Director for Santoku, a digital
transformation agency, where he is tasked with delivering
strategic planning and insight to clients, around a full range of
digital marketing topics and capabilities.
Coming from a background of online commercial research,
development and account management, he was previously
Director of Research and Education for Econsultancy in Australia,
and has authored multiple industry reports, contributing
significantly to a body of knowledge that marketers around the
world have come to rely on.
His international experience spans a wide spectrum of industries across media, entertainment,
travel, finance and FMCG and over the years, he’s worked with some of the world’s best known
brands.
He holds a Masters in Digital Marketing Communications and is well known and respected by
many senior marketing professionals. He frequently comments on digital marketing
developments and is often called upon to provide insight on changes in the digital landscape.
State of Ecommerce in Australia and New Zealand in association with hybris software
Page 8
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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2014
3.
Ecommerce Landscape
For the last few years, the ecommerce landscape in Australia and New Zealand has increasingly
been under international focus. This is due to a number of factors, including a strong local
currency in the global market and an almost unprecedented consumer adoption of online
shopping and associated technologies.
Additionally, major domestic retailers have generally been perceived to be struggling to increase
their digital presence in the region – and international retailers have capitalised on this by
aggressively operating in the marketplace.
More recently, local retailers have stepped up their efforts, with varying degrees of success.
However, several issues, such as hindering administration policies (for example, the Australian
online GST threshold) and complex and difficult fulfilment logistics have all been cited to be
preventing marketplace development.
3.1.
Market value and growth
Ecommerce in Australia
Due to a variety of factors, the ecommerce markets in Australia and New Zealand show positive
momentum. In Australia, the value of the market was estimated to have been around AU$27
billion in 2010, but by the end of 2013, analysts reported that it had grown by more than 35% and
is now worth over AU$37 billion.1
However, the rate of growth is…
What the experts say
“Perhaps one of the biggest challenges within the Australian marketplace in adopting online is the inherent
conservatism of retail businesses traditionally as well as it being a…”
SAMPLE
1
Forrester Research
State of Ecommerce in Australia and New Zealand in association with hybris software
Page 9
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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2014
3.2.
Consumer behaviour
According to research conducted by Morgan Stanley, the vast majority (86%) of Australian
consumers have made a purchase online and it’s expected that this will continue to increase as
time progresses.
This has been demonstrated to mirror the emergence of ecommerce in more established markets,
such as Europe and the USA, although the rate of development has been…
Source: AlphaWise, Morgan Stanley Research
State of Ecommerce in Australia and New Zealand in association with hybris software
Page 10
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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2014
4.
Key Players
There are a number of notable online retailers in the Australian landscape, but as many analysts
are quick to point out, the criteria for selecting the ‘top’ ecommerce websites can vary, depending
on what’s being assessed. It’s also widely observed that a large proportion of the top retailers are
far from being large, established retailers and many are pure-play businesses.
James Payne of Coca-Cola Amatil expands on this:
“A lot of the large organisations are slow to adapt and evolve. There are definitely quick
wins to be had by smaller, more agile or niche players.
“Just look at the online…
State of Ecommerce in Australia and New Zealand in association with hybris software
Page 11
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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2014
5.
Trends and Developments
5.1.
The retailer mindset shift
One of the most notable shifts in the Australian and New Zealand ecommerce markets is that
retailers appear to be taking the online opportunity much more seriously than in previous times.
It’s public knowledge that many domestic retailers are beginning to invest heavily into
ecommerce capability – sometimes millions of dollars and for the most part, are seeing
substantial reward through growing online sales revenue.2
However, there is still some resistance t0 ecommerce in the region, especially from…
Figure 2: Do you believe your / your clients’ ecommerce activities are supported
at a senior level within the company?
Company respondents: 94
Agency respondents: 61
http://www.businessinsider.com.au/digital-investments-for-david-jones-and-myer-pay-off-as-onlinesales-skyrocket-2013-8
2
State of Ecommerce in Australia and New Zealand in association with hybris software
Page 12
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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2014
5.2.
Multichannel commerce moves to the forefront
Cross-channel, omnichannel and multichannel approaches to retailing have all recently been the
subject of much debate in the Australian and New Zealand ecommerce industry. Interviewees
were extremely quick to point out that although multiple sales channels are being given large
focus, the strategies tying this together are somewhat lacking. This was also further evidenced by
the survey data.
“Customer journeys are significantly changing. Retailers need to be aware of this,” explains…
Company respondents
Figure 3: Do you agree or disagree with the following statements relating to
ecommerce?
Respondents: 96
What the experts say
“Omnichannel is the word on every retailer’s lips, the focus being on multichannel fulfilment. This is a particular
challenge in Australia, with a…”
SAMPLE
State of Ecommerce in Australia and New Zealand in association with hybris software
Page 13
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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2014
6.
Strengths, Weaknesses, Opportunities
and Challenges (SWOT)
6.1.
Strengths
One of the key strengths of the Australian and New Zealand ecommerce marketplace is the
continuing growth of consumer spend, meaning that retailers have a lot of scope to develop their
presence.
Further to this, the recent strength of the…
What the experts say
“Australia is very much a market in transition and we expect a lot of…
SAMPLE
6.2.
Weaknesses
Unfortunately, alongside the expected weaknesses found within any ecommerce marketplace,
such as security issues, the Australian and New Zealand markets equally have a few further issues
that may not be found widely elsewhere.
The first – and perhaps most important – is the cited resistance to…
What the experts say
“The lack of experience and the high cost of entry (to get systems up to scratch) have meant that while businesses
have seen online as a key area for growth they haven’t really…”
SAMPLE
State of Ecommerce in Australia and New Zealand in association with hybris software
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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2014
7.
Recommended Resources
Reports
Technology for Ecommerce Report
https://econsultancy.com/reports/technology-for-ecommerce-report
Ecommerce Platforms Buyer’s Guide
https://econsultancy.com/reports/ecommerce-platforms-buyers-guide
Building an Ecommerce Team: A Best Practice Guide
https://econsultancy.com/reports/building-an-ecommerce-team
Ecommerce Best Practice Compendium
https://econsultancy.com/reports/ecommerce-best-practice-compendium
Mobile Commerce Compendium
https://econsultancy.com/reports/mobile-commerce-compendium
Digital Marketing and Ecommerce Trends and Predictions for 2014
https://econsultancy.com/reports/digital-marketing-and-ecommerce-trends-and-predictionsfor-2014
Ecommerce Statistics
https://econsultancy.com/reports/ecommerce-statistics
Blog posts
Australia: Traditional retailers are heading online... and e-tailers are heading off
https://econsultancy.com/blog/62736-australia-traditional-retailers-are-heading-online-and-etailers-are-heading-off
30+ interesting stats about mobile commerce in APAC
https://econsultancy.com/blog/64306-30-interesting-stats-about-mobile-commerce-in-apac
Australian companies face challenges delivering great digital user experience
https://econsultancy.com/blog/63156-australian-companies-face-challenges-delivering-greatdigital-user-experience
Australian ecommerce: Nine stats you might have missed
https://econsultancy.com/blog/62132-australian-ecommerce-nine-stats-you-might-have-missed
Five ways to drive international sales online
https://econsultancy.com/blog/64559-five-ways-to-drive-international-sales-online
State of Ecommerce in Australia and New Zealand in association with hybris software
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8.
Appendix
8.1.1.
Type of ecommerce technology
Figure 11 shows that over half of companies surveyed (57%) are using a customised package /
solution as their ecommerce technology, as opposed to packaged applications (23%) and ondemand SaaS (17%).
Further analysis of the data found that smaller companies are more likely to use…
Company respondents
Figure 4: What type of ecommerce technology is your company using?
Respondents: 102
State of Ecommerce in Australia and New Zealand in association with hybris software
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8.1.2.
Ownership and decision-making
Respondents were also asked which department primarily makes the decision around which
specific ecommerce technologies should be used.
The chart below shows that ecommerce or digital…
Figure 5: Which department primarily makes the decision about which
ecommerce technology to implement?
Company respondents: 96
Agency respondents: 61
State of Ecommerce in Australia and New Zealand in association with hybris software
Page 17
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8.1.3.
Respondent profiles
Figure 6: Which of the following most accurately describes your job role?
Respondents: 205
Figure 7: In which country are you based?
Respondents: 205
State of Ecommerce in Australia and New Zealand in association with hybris software
Page 18
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