Convenience is king for Australian Internet buyers

The recently released Australian Netbuyers Survey by market research organisation APT Strategies Pty. Ltd. provides some interesting observations on the behaviour of online buyers:

Convenience is the dominant reason for buying online,

Australians prefer local suppliers,

Buying a known brand from a known retailer is important,

Online buyers find out where to buy mainly through the Web.

672 Australian Netbuyers responded to a survey immediately after they had purchased goods and services online from a number of e-commerce Web sites including: Ticketek, FAI, Greengrocer.com.au, SOFCOM shopping mall and Travel.com.au.

The respondents closely matched general Internet user demographics: greater proportion of men than women, aged between 25 and 44 years with an average income of $50-70,000.

The convenience of the Web draws “Cash rich, time poor” Netbuyers

One of the key findings of the report was the importance of convenience of purchase above all other factors. 96% of Australian Netbuyers stated that convenience was a reason for purchasing over the Internet. With 60% of respondents earning $60,000 or more, the Australian Netbuyers are “cash rich, time poor” looking for ways to reduce the time spent on the relatively mundane activity of buying.

Buying groceries, online banking, booking airfares and entertainment all featured strongly in the survey, possibly because of the convenience of purchasing over the Internet compared to physically shopping for these goods.

Not only do they want to save time, but Netbuyers also were interested in the greater availability of information that a Web site can provide, including: product information, technical information and pricing. The early phases of the buying process: looking at different options, finding suppliers, comparing features and prices are all highly suited to the multimedia capabilities of the Internet.

Researching travel information is a typical example, where information can be sourced from a wide range of Web sites on travel destinations and attractions, flight details, package tours and hire cars. Many sites also offer the means to book these items online.

Many also stated they preferred not to have to deal with the pressure of sales staff, possibly more relevant during the early stages of the buying process.

Interestingly, lower prices did not feature strongly, indicating that price is not a major issue, especially considering the demographics of Australian Netbuyers.

Netbuyers prefer Australian sites

Almost all Australian Netbuyers had purchased from Australian Web sites (96%) followed by US Web sites (49%) indicating a preference for a local provider, yet also showing that US organisations can be a threat, especially if their have strong brands.

Australian Netbuyers would be concerned with physical delivery costs and timeframes from overseas site, especially considering the preference for lower cost items (Only 8% purchased items over $300).

Sales tax and duty implications may also arise as a liability in any overseas transactions, although currently they do not apply for Internet purchases.

Other countries did not fare well (all less than 10%) indicating that Australia is well placed in the e-commerce market, especially in the Asian region, and that there could be opportunities for e-commerce provision in this region.

Netbuyers want familiar brands and retailers

The knowledge or recognition of brand name is one of the key factors that Australian Netbuyers are looking for when purchasing online, with 82% stating that it was either very important or quite important.

A strong brand provides reassurance of purchasing a product over an unknown medium such as the Internet. This is good news for marketers that have invested in their brand presence, but it doesn’t mean that new brands, with the appropriate investment, can’t eventually achieve the same results.

A known retailer is also important with Australian Netbuyers, perhaps looking for the comfort factor of a retailer with a physical location in case something goes wrong. Australian retailers such as Coles-Myer, David Jones and Woolworths have an advantage provided they commit early to e-commerce, otherwise overseas organisations promoting strong global brands may take the lead. New local entrants such as Greengrocer.com.au may also claim market share at the expense of these incumbents.

Australian Netbuyers are looking for sites that can provide information on their products and services to support the purchase decision. They don’t want to have to wait to get this information, hence efficient Web site design and construction are important to reduce the download time and speed of transactions.

Where do Netbuyers get information?

The World Wide Web featured strongly (68%) as the preferred source of information about products and services sold online, indicating to potential advertisers of products sold online to focus their efforts on Web sites and particularly those that lead the Australian Netbuyer to the purchasing centre. Examples would include search engines, portals, indexes and other high volume sites.

The print media also figured strongly (59%), especially amongst women, whilst men preferred the World Wide Web. Radio and TV fared less well, as their fast paced transmission does not lend itself to remembering Web site addresses.

The future

The future offers a lot of opportunities for vendors and retailers with well known brands, yet they could be threatened by new entrants who can better exploit the convenience of the Internet as a sales medium.

Global retailing will become more prevalent as multinationals spread the power of their physical distribution chains and global brands into the e-commerce arena. Whilst US based companies are well placed to take advantage of these changes, Australian companies should also benefit in specific markets like Asia, especially if they have existing relationships.

The innovators and early adopters in the e-commerce world are cash rich, time poor and likely to be well educated, but over time this will move to broader sectors, especially once more universal access terminals such as WebTV are available.

Companies wishing to increase the level of awareness of their e-commerce sites should consider the medium of the web as the main source of information for Australian Netbuyers, backed up by the print media, through advertising or editorial content.

For further information contact APT Strategies at info@aptstrategies.com.au