Five things every marketer needs to know

The shifts in consumer behaviour because of the pandemic are unparalleled, to the point where the word ‘unprecedented’ has become a cliché in its own right. Natalie Stanbury looks at how consumers have embraced online shopping like never before. 

Seventeen million Australians visited a major retailer online each month and a total of $48.6 billion was spent 
on online retail in FY21. 

IAB’s Australian Ecommerce Report 2021 looks to understand the shifts and what emerging trends mean for marketers. The report delves into changes in online shopping behaviour. It specifically focuses on direct-to-consumer brands, loyalty programs and buying triggers.

The report took a nationally representative sample of 1000 Australians aged between 18 and 70 who had shopped online at least once in the previous 12 months. The research was conducted in June 2021, at a time when most Australians were out of lockdown and people had resumed some of their pre-COVID lifestyles. 

 Here are five key insights that the report delivered:

 Reward programs remain attractive to shoppers – but trust is a significant concern

 

Reward programs offered by retailers are still important to shoppers, with nine in 10 online shoppers signed up to at least one shopper rewards program. Of these, 45 percent have four or more cards. 

 The research also highlighted consumer concern around how brands are using their loyalty program data. Fifty-four percent state they are very or somewhat concerned with how retailers are using the personal data supplied via loyalty programs. For a further 14 percent, the level of concern relates directly to how much they trust that particular retailer. Nearly a third don’t know if the retailer shares their loyalty program data with other companies. These findings highlight the need for retailers to build strong levels of trust with their customers – particularly with their most loyal shoppers. 

Convenience is driving online shopping

 

The report finds that convenience is by far the number one reason for people to shop online, with 76 percent of respondents naming it as their biggest reason. Deals and discounts are another key reason for purchasing online. Free delivery is named as a reason to buy online for 50 percent of customers. Along with this, lower prices (45 percent) and discounts (37 percent) are among the other most common reasons. 

As we move into a post-lockdown world, positive, convenient omnichannel experiences will need to be a key focus for brands looking to reinforce the behaviours triggered by the pandemic. Convenience now means a lot more than just being available online, as it did in the past.

Direct-to-consumer brands are thriving

 

Direct-to-consumer brands have proven popular throughout the pandemic. Half of online shoppers have purchased a direct brand, with a third purchasing from multiple direct brands within the 12 months preceding the report. 

Direct brand shoppers are proving more adventurous when it comes to trying new brands. Fifty-nine percent are open to buying brands that aren’t well-known. 

Direct brand shoppers are also more likely to be on the lookout for brands doing new and interesting things and are more likely to get excited about trying new brands. 

When it comes to awareness of direct brands, Hello Fresh comes out on top with 76 percent of direct brand shoppers saying they are aware of the brand. Catch is the second most well-known brand (63 percent), followed by Marley Spoon (58 percent), Booktopia (57 percent) and Koala (45 percent).

Ethical and sustainable propositions resonate strongly with direct brand shoppers

 

The research flags local, sustainable and ethical brands as the biggest winners for direct-to-consumer brand shoppers. Direct brand shoppers are more likely to buy from companies that they feel have behaved well during the COVID-19 pandemic at 56 percent. This is compared to 39 percent of non-direct brand shoppers. 

Sustainability proves important, with more than half of direct brand shoppers saying they prefer to buy from brands that they know are sustainable. Purchasing from brands with ethical credentials is also important for 54 percent of direct brand shoppers. 

The consumer shift towards local, sustainable and ethical brands provides an opportunity for brands to develop a sense of community and connection, helping them to authentically showcase their values.

Innovation and personalisation are proving more popular in 2021

 

When compared to the same data from 2020, brand proof points such as innovation, personalisation and Australian-owned are now more compelling reasons to make a purchase. 

In 2021, over a quarter of consumers say they are compelled to buy products from direct brands they think are ‘innovative’. This compares to just one percent in 2020.

Personalisation has increased in importance from just five percent in 2020 to 12 percent in 2021. In response, marketers should focus on amplifying their communication of these brand proof points. 

Clearly, consumers expect more from their favourite brands than mere ‘hygiene factors’. For marketers, it’s vital to not just meet these high expectations but exceed them. 

Natalie Stanbury is the research director, IAB Australia.