E-Commerce Summit: Retail’s winners and losers
The crisis in retail hasn’t played out the same in all sectors of the industry, says Retailers Association chief Paul Zahra.
Thanks for joining the Australian’s live coverage of the 2020 E-Commerce Summit.
Communications Minister Paul Fletcher predicted that the expansion of the 5G network would be crucial for Australian SMEs, particularly when working from temporary locations such as trade fairs.
The acceleration of online shopping has been a gift for retailers who now have access to more detailed analytics of customer’s behaviour. The summit’s speakers said computer data should be coupled with human insight to make the most valuable business predictions.
All panellists agreed that this holiday period would be the country’s biggest online Christmas. Meeting customer’s rising expectations online will be key to success for trading over the holidays.
During Wednesday’s sessions, Prime Minister Scott Morrison said COVID-19’s acceleration of the e-commerce industry would be a cornerstone of the country’s recovery from the pandemic, with innovation in fintech opening up Australia to new markets.
Panellists stressed the importance of delighting your customers during an online experience and offering an equal level of service to what they receive in-store. With fewer points of customer contact in online retail, creating a personalised point of difference is key to success.
- You can find more coverage of the 2020 E-Commerce Summit on The Australian’s dedicated page.
12.04pm: Christmas supply chain
Mr Swindells said the supermarket had worked with the Victorian state government to ensure its supply chains were not disrupted over Christmas.
“The supply chain aspect has been broadly worked through, but the uncertainty is how big this Christmas will be,” he said.
“From a customer perspective, we shouldn’t underestimate the economic challenges that COVID has brought so people want value for money more than ever.... so this will be one of the hardest Christmas periods to execute from a planning point of view.”
eBay Australia & New Zealand Managing Director Tim MacKinnon said the company was noticing searches for Christmas decorations earlier in the year compared to previous years.
“There is inherently a lack of confidence in delivery and we’ve seen express delivery is up for this reason. It’s seen triple digit growth,” he said.
11.58am: Bigger shop, less often
Coles Chief Operating Officer Matthew Swindells said meeting consumer’s rising expectations was key over the Christmas period.
“You can save more customer problems through digital,” he said.
“Most online shoppers are more planned. The COVID dynamic brought a change in consumer patterns, with larger baskets and fewer transactions. This was a worldwide trend.”
The Iconic chief executive Erica Berchtold said the retailer was planning to capitalise on the online shopping momentum this Christmas period.
She said tracking the micro fashion trends of the pandemic was essential to respond to customer’s needs over the holiday period.
11.38am: Get ready for Christmas
The final panel of the day is titled What steps are online retailers taking to prepare for a different Christmas?
- Hosted by The Australian’s Eric Johnston, it will feature
- Erica Berchtold, Chief Executive Officer, The Iconic
- Tim MacKinnon, Managing Director, eBay Australia & New Zealand
- Matthew Swindells, Chief Operating Officer, Coles
11.28am: Transparent transactions
Afterpay chief executive Anthony Eisen said customers’ needs for transparent transactions has been a sustained trend since the company launched after the GFC.
For retailers, he said the platform allowed companies to optimise their digital engagement with customers.
“Where we spend most of the time with merchants is not just with onboarding, but how do we connect customers with merchants?”
“With thousands of SMEs in Australia, Afterpay is their strongest channel to connect with customers based on their preference and their styles in a way that is very effective.”
11.04am: Afterpay’s Anthony Eisen in conversation
The next session will feature Afterpay co-founder and chief executive Anthony Eisen in conversation with The Australian’s David Swan.
It will consider how COVID-19 has shaken up e-commerce and how the fintech company is leading through the crisis.
10.51am: Using machine learning
Mr Giorgio said Australia Post used data to help plan its network and move towards smarter personalisation of customer service.
“We’ve been using machine learning models to plan for our biggest Christmas period... we normally process 9 million parcels a week compared to 13.5 million during our biggest weeks,” he said.
“At the scale Australia Post is operating at, human behaviour is very predictable.”
Officeworks Managing Director Sarah Hunter said data was at the heart of informing the company’s decision making.
“It’s not new, we’re just becoming so much more sophisticated in the data we have available and how we use technology. We can look at colour trends people are purchasing and how you create that right mix and match. You can see that variability in a heartbeat,” she said.
Temple & Webster Chief Executive Mark Coulter added that human based predictions must work alongside computer modelling.
“Data is still a prediction and that has some uncertainty. That’s when the humans come in to say the prediction says this, but we know this is unlikely,” he said.
10.42am: Sophisticated shoppers
Mr Giorgio said the convenience of e-commerce was driven by a higher percentage of frequent online shoppers.
“We typically see e-commerce year on year growth increase by 17 percent. With COVID we saw it grow by 50 per cent,” he said.
“A lot of the growth is coming from Victoria, but all the other states have maintained a higher level of e-commerce even coming out of restrictions.”
“A lot of growth is coming from sophisticated shoppers and they have sophisticated expectations of delivery.”
10.36am How customers think
The next panel is titled How customers think: How companies can use data to better understand their customers and latest shopping trends Hosted by Sky News Business Editor, Ticky Fullerton, it will feature:
- Officeworks Managing Director Sarah Hunter
- Temple & Webster Chief Executive Mark Coulter
- Australia Post General Manager, Data Science & Strategy Silvio Giorgio
10.25am: Focus on photography
Mr McInnes’ Premier Investments reported a dip in its retail business at the beginning of COVID.
“When The WHO announced a global pandemic on March 11, all customers got scared and stopped shopping online for about two weeks,” he said.
“Then we went to shut down our operations in response to pandemic and we started to see, particularly in Peter Alexander, significant uptake and that continued over April and leading up to Easter. We had some incredible weeks.”
Mr McInnes said the brand has adapted “world best practices” of photography for the company’s e-commerce platform.
Mr McInnes said the company reviews its e-commerce analytics to continuously improve the customer experience.
“We see different metrics for total number of items per basket, how long people are navigating the website before they buy,” he said.
Read more: This is our payoff: McInnes
10.12am: Mark McInnes in conversation
Up next, The Australian’s Eli Greenblat will be in conversation with Just Group and Premier Investments chief executive Mark McInnes.
9.58am: ‘Purposeful’ shopping
Mr Zahra said a “decade of retail trends” will be brought forward in the 12 months from the beginning of the pandemic.
“Pre COVID we were doing just 10 percent of total retail sales online. We’ll see that double quite quickly. People are becoming more purposeful about their shopping and what they need to go and buy in-store,” he said.
“They’ll be fewer shop visits, but more purposeful visits.”
Mr Evans said superb customer service remains vital in the online retail landscape.
“If you’re not attentive online, customers can use social media to remind you you’re not doing a good job.”
Read more: Victoria’s strategy ‘exceptionally frustrating’
9.47am: Retail winners and losers
Australian Retailers’ Association chief executive Paul Zahra said winners and losers emerged in the sector’s landscape during the early stages of the pandemic.
“The high street was doing particularly well, while the CBD was doing poorly,” he said.
“Retailers that already were trading online could switch quickly.”
Mr Zahra said the wage subsidy JobKeeper and welfare payments were crucial for retailers.
9.41am: Need to stay nimble
Evans Shoes Managing Director Richard Evans said the family owned retailer had set up an online platform prior to COVID-19 shutdowns.
“The only income we had in April was an online business. It was challenging and we found what we planned yesterday changed the next day ... so we had to stay very nimble,” he said.
Vinomofo chief executive Justin Dry said the wine company had a surge in new customers when the pandemic began.
“In terms of our business, it happened very quickly and accelerated some of the projects we had to get done to enable us to work from home,” he said.
9.30am: Lessons and opportunities
The first panel of the day is titled Lessons and Opportunities: Unlocking the keys to e-commerce success. Hosted by The Australian’s David Swan, it will feature:
- Justin Dry, Chief Executive Officer, Vinomofo
- Paul Zahra, Chief Executive Officer, Australian Retailers’ Association
- Richard Evans, Managing Director, Evans Shoes
9.20am: NBN got us through
Communications Minister Paul Fletcher has told the summit he expects the increase of e-commerce will persist beyond COVID-19.
He said the NBN allowed online businesses and customers to access faster internet speeds during the pandemic.
“When Australians moved to working at home, we had the broadband network to cope with.. and e-commerce also includes services online, things like tele-medicine,” he said.
“If you’re an online merchant, you can be confident everyone has the bandwidth to see your products.”
Mr Fletcher said the widespread expansion of 5G will be beneficial for Australian small businesses.
“With 5G you can connect up a building or a location quite quickly. With a pop-up environment, trade fairs and other temporary exhibitions, you’ll get high speed very quickly,” he said.
“It’s one of the next big developments and it will complement and sit alongside the NBN connectivity.”
Mr Fletcher said investing in skills and training is key to foster entrepreneurship in young Australians.
“We want to help people get the skills they need. In the IT or the tech area, we’ve been working to make these courses cheaper in relative courses,” he said.
“We also have a range of measures in the budget as part of the response to COVID-19 such as being able to write off the full value of new assets you have acquired.”
8.15am: Best year for online commerce
The coming year is set to be the best time yet to launch an e-commerce business in Australia, according to Catch Group founder Gabby Leibovich.
“This is the best period ever for e-commerce and 2021 will be the best year ever to launch an e-commerce business or a digital business,” he said, adding that the jump in online sales as a result of the COVID-19 pandemic had significantly increased the value of online retailers over the past six months.
“The world has completely flipped over,” he said.
“When we sold Catch (to Wesfarmers for $230m) 13 months ago, e-commerce businesses were being valued at a multiple of earnings. Now they are being valued at a multiple of revenue or growth rates.
“With the rise of telehealth, fintech, online education and working from home, there are an abundance of problems that need to be solved.”
The founder of ASX-listed online market place for print on demand products, Redbubble, Martin Hosking, said the big jump in online sales as a result of COVID was now beginning to level out.
“We are off the peaks we saw when everyone was shutting down in August,” he said.
Read more: E-commerce about to consolidate its place
Glenda Korporaal 8.00am: E-commerce accelerates
After months of gloom and doom about the economic impact of Covid-19, Wednesday’s e-commerce summit was an inspiring change of pace, putting a focus on the impact of the big surge in online sales since March.
Australian retailers were slow to embrace online selling years ago. Things had changed a lot by early this year, but the onset of the pandemic has seen a step change in the use of online selling and marketing in the nation.
There was a debate among speakers on Wednesday about whether it has accelerated the move to online selling in Australia by three to five years and how much the big increase in online shopping would go back to pre-COVID levels once travel and movement restrictions had ended.
But, taking a glass-half-full look at the past six months, COVID-19 has forced many changes, including the acceleration of e-commerce — from baby-boomers shopping online for the first time, to the more reluctant bricks-and-mortar retailers that have been forced to look at ways of accelerating online sales.
Read more: Online retail boom offers tonic to businesses hit hard by lockdowns
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