Online shopping data shows post-pandemic generational wealth divide

The cost-of-living crunch has deepened the wealth divide between younger and older Australians, new data shows.

Higher cost of living has slashed the average online shopping order delivered by Australia Post to a 10-year low.

Australia Post’s annual e-commerce report shows the average basket spend has fallen to $95 – the lowest in a decade, and the figure is not even adjusted for inflation, meaning the purse string tightening is even more drastic.

Across the generations Gen X, baby boomers, “builders” (born before 1945), millennials and Gen Z have the highest to lowest average spend per shop.

However, the proliferation of shopping online means year-on-year overall spend has increased 12 per cent to $69bn.

This increase was driven by a 4.6 per cent increase on essentials spending, with a 3.3 per cent lift in discretionary spending.

Retailers need to prioritise speed of delivery to entice shoppers to spend. Picture: NewsWire / Gaye Gerard

The average basket size of Gen Z, millennials and Gen X is smaller now than pre-pandemic, while the average baskets of baby boomers and builders have increased.

“Consumers had to prioritise spending on essential items – things like health, education, rent and insurance – because those categories had price rises,” Commonwealth Bank senior economist Belinda Allen said in the report.

Households had to spend savings during the period of high inflation, so were regrowing savings buffers, but the recent interest rate cut was cause for optimism, she said.

“They also made very deliberate choices about what brings them joy and were willing to do without in some categories to get those preferred experiences. They are now feeling a little bit more optimistic about the economic outlook.

“It might be later in 2025 before spending looks more normal.”

Shopping on digital marketplaces overtook food and liquor as the most common online shopping order in 2022.

Better deliveries to regional areas continue to accelerate. Picture: NewsWire / Gaye Gerard

PayPal is the most common payment method for Australians, except Gen Z, who prefer digital wallets, the report finds.

Black Friday shopping also broke records in 2024, with spending increasing 10 per cent on the past year to $2.2bn.

So while shoppers hang out for the major sales, the value of the average shop has fallen to its lowest point in 10 years.

The average transaction made online last year was $95, a 2.1 per cent drop on 2023. Retailers are going to have to offer faster delivery times to entice shoppers to spend.

“The next big wave is going to be speed; we expect that Australian consumers will see delivery times from leading platforms and omnichannel retailers reduce significantly over the next one to two years,” digital retail consultant Jordan Berke said in the report.

Some in the industry anticipate subscription schemes from the big retailers.

“I think more of the leading retailers in Australia will start to use innovative paid subscription models that make it more rewarding to keep shopping across their physical and digital channels,” Mr Berke said.