Older shoppers plug into the internet as e-commerce booms

Older shoppers are increasingly turning to online shopping as heavy restrictions across the country limit movement and business opening hours.

Industry experts believe COVID-19 helped accelerate the shift to online shopping and helped propel that sales channel by a few years in just a few months. Picture: iStock.

Older shoppers are increasingly turning to online shopping as heavy restrictions across the country limit movement and business opening hours, with these savvy greying consumers feeling more comfortable going digital, especially in categories like furniture and housewares.

The reporting season of fiscal 2020, which came to a close at the end of last month, was dominated by COVID-19 and its impact on earnings and dividends, but an equally dominant theme for the retail sector was the explosion in online shopping.

This was evident in the results of companies like online furniture retailer Temple & Webster, which revealed its online sales were up by more than 160 per cent in July and August, a particularly high achievement given traditionally furniture was seen as a “hard sell” online as customers wanted to see, touch and feel the product.

Personal grooming retailer Shaver Shop posted a 103 per cent rise in online sales over fiscal 2020, Super Retail Group booked a near 50 per cent rise in online sales and Myer witnessed huge demand in beauty products in Melbourne during the early weeks of the stage 4 restrictions, with online orders growing by 310 per cent, including a 430 per cent increase in skincare, 330 per cent increase in fragrances and make-up and online homewares sales growing by 530 per cent.

e-commerce summit graphic for TAUS business

Woolworths, the nation’s biggest retailer, reported that its online sales across all its divisions were up 39.1 per cent to $3.523bn in 2020 and now make up 5.5 per cent of total group sales, up from 4.2 per cent in 2019.

Industry experts believe COVID-19 helped accelerate the shift to online shopping and helped propel that sales channel by a few years in just a few months, with consumers now more savvy when it comes to shopping from their phones, tablets or laptops.

“Pre-COVID consumers would spend around 9.5 per cent annually online. We knew that over the next five years it was projected to go up to around 15 per cent and we are seeing that happen much more quickly now, to the point many of our traditionally bricks-and-mortar stores that have been able to adequately pivot online are seeing quite incredible increases in terms of their online sales,” said Dominique Lamb, chief executive of the National Retail Association.

The latest NAB Online Retail Sales Index showed rapid acceleration in July, up 6.7 per cent on a month-on-month, seasonally adjusted basis. In year-on-year terms, the growth in the NAB Online Retail Sales Index of 62.2 per cent broke the previous record set in April. NAB estimates that in the 12 months to July, Australians spent $37.4bn on online retail, around 11.1 per cent of the total retail trade estimate and roughly 28.6 per cent higher than the 12 months to July 2019.

Ms Lamb said the online sales boost since COVID-19 had also featured two key demographic segments, younger and older people, who were now at the forefront of shopping online.

“Some of the demographics that shifted from bricks and mortar to online include that older demographic and millennials, and anyone who received the stimulus — for example, those older people who received that $750 payment, we saw a really big spike and move to online.

“And there has been a massive consumer shift in the sense that they have become more patient about receiving items (in the mail) as of course there have been delays and issues with supply chains, but also they feel more comfortable shopping online and they are willing to engage with those brands.

“(Older) shoppers, they are trying new things, engaging with digital content.’’

The NAB Online Retail Sales Index for July found that homewares and appliances were the largest sales category in the index, representing roughly a quarter of sales, and growing at a more moderate pace for the month, but in year-on-year terms this category is currently the fourth-fastest category and contributed strongly to the headline result.

The three most populous states represent just over 80 per cent of all online sales, slightly above their share of the population. Of these, Victoria recorded the strongest growth in the month, well above growth in the other states, which NAB sees as not surprising given Victoria was on much stricter COVID-19 regulations. In year-on-year terms, online sales in Victoria are nearly double what they were in July 2019.

NAB senior economist Brien McDonald said there had been periods recently when online sales growth had moderated, such as in 2019, but the trend over the past decade was that online sales had grown faster than traditional bricks-and-mortar sales. He said retailers were helping to push along that growth as they pivoted to online and offered innovative and compelling digital platforms.

“Once we got the stage 4 restrictions in Victoria, businesses reacted quickly to that, working out ways they could sell to the public without the public being in the store, and the ones (retailers) that didn’t adapt might start to look around and see how they can — and that might cause that structural change to accelerate.’’