Why Overseas Retailers Continue To Steal Our Dollars – With 3 In 4 Aussies Shopping On International Sites
New research has revealed that 74% of Aussies have been sending their hard-earned cash to overseas shopping sites so far this year – with findings further revealing which retail categories our money is going to, the factors that are drawing us to overseas sites, and the factors that will keep us shopping locally.
The findings come from a survey of an independent panel of 1000 Australians commissioned by Cashrewards.com.au, Australia’s leading shopper savings website, which has driven $70 million of Aussie shopping dollars to local and overseas online retailers since January this year.[i] This represents 0.4% of the $17.4b annual e-commerce spend in Australia overall, based on data from the July 2015 NAB Online Retail Sales Index.[ii]
Fashion and electronics driving our overseas spend
Surprisingly, it isn’t gaming, toys, beauty, music or travel that Aussies say they’ve been spending on overseas sites most. Fashion is the biggest drawcard to international sites, with more than 1 in 3 respondents (35%) lured by this category. This was largely driven by 18-24s, two-thirds (61%) of which admitted to purchasing fashion on overseas sites this year.
Nearly 1 in 3 (31%) of all respondents admitted they went to overseas shopping sites for technology. Surprisingly, this was even higher among over-55s (at 38% of respondents).
Books are still a major drawcard for shoppers, with 27% of respondents having purchased books or magazines this year on overseas sites (again, higher among older Australians).
While jewellery and beauty was lower on the list of purchases, the 18-24 age category purchased these goods more than any other age group (21% of respondents, respectively).
A mere 1 in 4 Aussies (26%) said they do not shop on overseas sites.
Motivating factors drawing us to spend overseas
When asked about what motivates them to shop on overseas sites, better prices was chosen by 41% of respondents – again, this was largely driven by younger Aussies (42% of 18-24s and 46% of 25-34s).
A further 1 in 3 (33%) admitted it was product choice, or a type of product not available locally, that drew them to overseas sites.
Nearly 1 in 3 (29%) respondents admitted to being addicted to online shopping or online browsing. This is higher among 18-24 year olds, 43% of whom are addicted to shopping or browsing online, and 30% of whom are addicted to browsing alone.
Andrew Clarke, founder and CEO of Cashrewards, says: “We are in the midst of an evolution in the shopping industry, driven by the consumer search for better prices and greater incentives and rewards on demand. The search for lower-priced items, particularly when the Aussie dollar is languishing against other global currencies, is strongly motivating consumers to become smarter shoppers and more discerning. In the next couple of years, local retailers will need to incentivise and engage consumers in better ways.”
Delivery the largest factor that keeps us shopping locally
Andrew adds: “While our local retailers can’t always compete on price or product range, our survey revealed an area of customer service that local retailers could innovate to win Aussies back, and which overseas retailers would struggle to offer. It is delivery: this was identified as likely the least favourite aspect of online shopping for many Australians.”
Nearly 1 in 2 respondents (47%) prefer to pick up their items in store (click and collect) to avoid waiting for delivery, and 42% revealed that picking up in store is faster than delivery. Thirty-nine per cent of respondents said they would shop online more if click and collect were available more.
“If Aussies receive outstanding service in the delivery stage of the shopping cycle, I believe our local spending will increase.”
Andrew Clarke’s top 7 tips for getting what you want on local retail sites:
- Sign up to local retailer news. Local retailers often hold flash sales at short notice or offer ‘spend and save’ rewards for their subscribers. Often the only want to know about them is to sign up to their eNewsletters or their social media sites. Some offers are only posted on Facebook, others via direct mail.
- In-store pick up. A major benefit of Click and Collect – offered by many local retailers – is that you could exchange or refund on the spot if the product is unsuitable. Overseas sites require you to go through the lengthy process of exchanging via post or courier, the process often taking weeks.
- Set alerts. Use a browser plug-in, such as Page Monitor, to monitor the offers page of your favourite retailers. These will alert you to any changes to the page’s content, usually indicating a new offer.
- Postage adds up. If the overseas item is priced 5-10% lower than local offerings, is it worth it when you take into account international shipping rates – which can be around $35. This cost is even higher if you need to return or exchange. Australian retailers typically charge $10 per shipment, and often it’s free for purchases over $100.
- Cheap, risky purchases may be cash down the drain. Be careful of being lured by too-good-to-true prices. If a cheap item from an overseas site is unsuitable, and the delivery – and particularly the returns or exchange process – is lengthy, chances are we won’t even bother returning. Savings, or wasted cash? Brands like this include Ali Express
- Check reviews. Product quality must be as important as price – and often you can get a good balance from local retailers. Some incredibly cheap overseas fashion sites, for instance, are advertising everywhere but check the reviews and you’ll see most are poor due to poor quality products. Australians expect – and receive – great quality products, and often we still expect the same level of quality at unbelievable prices from overseas retailers.
- Know where to get discounts and rewards: Use cashback sites, which offer up to 20% in cashback or discounts across local retailers – and 300 per cent better value than an airline points-based system that gives four points for every dollar spent. Cashrewards, for instance, has so far given 70,000 Aussies $2.5m in cash back in 2015 alone.
Where have our overseas shopping dollars taken us in 2015? From a survey of 1000 Australians:
|Home items, including appliances||15.6%|
|Food and/or wine||4.0%|
|Toys and gaming||13.3%|
|Baby and children’s items||4.5%|
|Music and entertainment||13.0%|
|Travel and holidays||14.3%|
|Sporting and adventure items||6.4%|
|Books and/or magazines||26.6%|