Big lessons to be learnt from online shopping bonanza: it’s in the mail

An explosion in online shopping has been the sleeper COVID hit, with parcel volumes coursing through Australia Post up 61.8 per cent on the same time last year.

Merima Mahmic, night-shift manager at Australia Post’s Alexandria depot in Sydney, with new sorting machines recently installed to handle the booming surge of parcels flooding into Australia. Picture: Britta Campion

An explosion in online shopping has been the sleeper COVID hit, with parcel volumes coursing through Australia Post up 61.8 per cent on the same time last year.

This huge bump has been fed by a two-day sale from Amazon, in which parcel volumes were 38.8 per cent higher than recorded during the same sale last year.

Australia Post executive general manager Gary Starr said businesses and retailers could learn big lessons from trends picked up through postal data.

He noted that businesses needed to consider two tipping points on people’s online shopping decisions: shipping costs and ease of returns.

“Where do I set a free shipping threshold? Can I lower that? It lowers the decision of people’s critical click at checkout? We have seen retailers experimenting with that,” he said.

“The return process needs to be easier. Obviously Australia Post offers a range of street post boxes and the post offices; there are many ways a customer can return or receive an item.”

He said businesses needed to consider designing packaging to seamlessly pass through the postage system and reduce shipping times and improve customer satisfaction. An understanding of packaging or products within parcels could affect its delivery instructions.

“If you use black plastic for packaging it reflects off the barcodes, if you put sticky tape it makes it hard to read, if a package can’t be read three times it’s sent for manual sorting,” he said.

“If you have thousands of products rejected each day it slows down the sorting.”

Mr Starr said Australia Post ­advised businesses to consider their supply chains in light of ­global disruptions wrought by the outbreak of COVID-19.

“Interconnections and managing supply chains in a global context becomes really important,” he said. “Many of our customers are thinking about where do I manufacture, what are my dependencies, how do I get things out of a country and how do I create resilience.”

Parcel growth across the network in the first six months of the pandemic grew 75.8 per cent as Australians stayed home.

The explosion in online shopping has seen some categories of goods sail past others. Food and liquor volumes across the postage network have grown 97 per cent in the year, while home and garden are up 95 per cent.

The trend is even stronger in Victoria where food and liquor volumes are up 187 per cent and home and garden up 158 per cent.

Mr Starr said the trends wrought by COVID, which have already reshaped the landscape of Australian retail and delivery, were likely to continue and accelerate.

He said Australia Post was ­experiencing significant growth in shipments to regional and rural areas as shoppers cut off from metropolitan shops went online.

The flight of many work-from-home employees to coastal or ­regional towns had also shifted Australia Post’s work, with the postal service looking to invest in further distribution capacity in those areas.