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Like any market it’s important to understand the values of the people that live there and get under the skin of what is important to them.
Australians are very easy going, so constant chasing/follow ups tends to grate in a business context There’s a very outdoorsy culture because the country obviously is very beautiful and the weather supports an outdoor lifestyle, therefore well being and a work/life balance are important. People want to finish work and go to a fitness class, play a sport or go for a swim/surf or walk. Aussie’s are fiercely competitive more so in a sporting capacity, sport is like a religion and is taken very seriously. Not great losers some might say… There’s a real respect for the land, agriculture is very important The Fair Go is part of the fabric of Australian society, and an official term used to describe fairness to all, and every Australians entitlement to it Australians are big on relationships, which translates into business, the interaction with your contact is important Aussie’s have a bit of a soft spot for an underdog or a ‘battler’, the little guy triumphing over the big guy, the average joe coming out on top. This relates to the fact that, despite their size and being a very developed country, Australia arguably is perceived as the underdog amongst the other large English speaking countries. Historically Aussies have favoured local independents over large chains.
22.5 M people in Oz 6th largest island in the world 1 in 2 are from migrant heritage 90% of the population live by the coast, 78% of them on the east coast and over 5 main cities really – making most of the population urban too Median age is 37.3 Historically Australia has had an ageing population, but for the first time in 2019 there are more gen X, Y and Alpha for the first time, which is significant
On to consumers Here’s a load of stats describing Australian consumers, combined the build a picture of what consumers look like in Oz and how they shop
24.2M handsets in AU, so that’s more than people They’re the 4th largest user of mobile phones globally – ¼ of digital ad spend is on mobile 85% of Australians are connected to the internet, 61% of that is via a mobile connection 1 in 10 items will be bought online by 2020 However 50% of Australians prefer in store – that survey found that the majority there was Baby Boomers, or an older audience 18M are active on social media – Facebook being the preferred social platform 53% of ad spend is digital, this has grown over 50% in the last year. Rapidly growing.
Digital Divide Sheer size of the country means that piecing together an infrastructure to offer a consistent internet offering is difficult. NBN – National Broadband Network is currently the proposition positioned as the best in market, which was built by the government and the franchised off to the private sector. The NBN is the replacement of the old copper wires with new fibre based technology. Fibre based connections on offer are fibre optic, which is what most developed nations would be used to as standard, fibre to the node – so to a fixed contact point in the area near the house, or fibre to the building. NBN is currently being rolled out, but is not available everywhere, so the connectivity and type of access to the internet varies wildly depending on where in the country you live. Some areas in Australia still use dial up! This has resulted in a large portion of mobile only households existing in Australia, although this number is decreasing with the introduction of the NBN.
Independent retailers Australia’s independent retailers are among the best performing in the world second only to North America. Technology such as cloud based retail management solutions have enabled smaller local retailers to thrive and punch above their weight alongside global counterparts. Revenue from independent retailers was 18% above the global average. The appeal for Australians is the personal, local touch and their sense of Australian pride to be supporting home grown. SME sector is large. https://insidesmallbusiness.com.au/featured/australias-independent-retail-sector-among-the-best-in-the-world https://www.kochiesbusinessbuilders.com.au/australias-independent-retailers-outperforming-the-rest-of-the-world/
Early Adopters There’s a new era of consumer in Australia, with the 18-36 demographic having increased by half a million in the last few years, and now representing 26% of the population with this brings the early adoption of technology and ahead of the curve services.
Smartphone stats in terms of adoption http://www.roymorgan.com/findings/6947-technology-early-adopters-are-pioneers-for-many-things-june-2016-201609011503
Housing Housing in Australia has grown dramatically over the last five years, There are more properties on the market now that at any other time since 2012, however not everyone is buying due to the high prices and the failure of wages to move with the higher cost of living. This has meant two things, new apartment blocks springing up in the major cities (particularly Sydney, Melbourne and Brisbane) predominantly for renters, and also an increase in buyers looking and moving to what are dubbed ‘satellite’ towns sitting further out from the main urban sprawl. It is these that have seen the biggest online purchasing growth, with Point Cook in Melbourne driving the most online shopping for the second year running according to a report form Startrack, and the biggest YoY increase (21%) coming from Baulkham hills in Sydney’s far North West. https://acquire.startrack.com.au/pdf/Inside%20Australian%20Online%20Shopping%202017.pdf
Offline Offline media is still a highly consumed medium in contrast to the rest of the world, likely down to a more ‘outdoorsy’ lifestyle. Twice as many generation xers in Australia are influenced by tv ads over ones served on social media. Therefore billboards, print, TV and radio are still formats invested in by retailers. Whilst nearly all major reports show an overall decline in favour online, TV in particular remains critical to discover, building awareness and to long term brand association. This means the marriage of online and offline strategies is important to Australian consumers. Even pureplay propositions advertise offline – to drive customers online, for example pureplay fashion retailer Hello Molly ran their debut TV advertising campaign during the latest season of Love Island.
Australian society is most definitely becoming cashless but also increasingly becoming cardless. More Aussies than ever now use digital payment solutions, 14.5 million Australians aged 14+ (71.7%) use Digital Payment Solutions in a 12 month period.
Bpay A Bill Payment (or BPAY for short) is a fast, convenient and easy way to pay your bills. It is Australia’s most widely used bill payment service which enables bill payers to transfer funds electronically from their bank accounts to billers. It is offered as a payment channel by over 170 financial institutions through their phone and Internet banking services. The service requires the payment recipient to give the aye a biller code and customer reference number which the are then used to set up the secure and automated payment from an online bank account or banking app.
Contactless options include: Apple Pay - Westpac doesn't have this yet Samsung Pay Google pay tap and pay Fitbit pay Pay wave
Banking apps All major banks have their own, very well executed apps which allow payment to a mobile phone number. Great as most restaurants in Australia do not allow split bills.
EWallet Many available to Australians across the usual providers, Apple, Android and Google, however only one major bank has created their own so far.
CommBank has created an app to let you pay anyone at anytime and anywhere. You can also pay your friends using your mobile, email or Facebook contacts and make contactless payments if the facilities allow you to. Contactless payments are also available with an enabled device.
Payment gateways Used generally by consumers requiring more peace of mind when shopping online Paypal POLi is owned by Australia Post, Australia’s national postal carrier, and facilitates payment to a retailer via the shopper’s internet banking. The shopper simply selects POLi as their payment option, and their bank from a list and enters their internet banking login details securely.
AI has been a bit of a buzzword for a while now, however the main ways in which Australian ecommerce has digested AI are:
Smart speakers Australians are adopting smart speakers like Alexa or Google Home at a faster rate than the US currently, with 5.7 million Australians currently owning one. 1.35 million Australians now have a smart speaker and use voice activated assistants to help navigate their daily lives. Australian consumers (16%) predicted to use their smart speakers for shopping in 2019. https://voicebot.ai/2019/03/19/australia-leaps-past-u-s-in-smart-speaker-adoption-google-home-establishes-dominant-market-share/
Supply chain automation Particularly inventory management and fulfilment, important to both independent business, which we know are prominent in Australia and also marketplaces, again also prominent in Australia. More on that in a second.
Chat bots Increasingly being adopted globally by business, Australia is no exception with government agencies like the Australian Taxation Office and IP Australia.
Bundling Of which we’re all familiar with the concept and the business that are able to provide these services, but increasingly used by mu
Australia was the first country in the world to test Google’s Project Wing drone delivery across North Canberra. This has also been adopted by The Iconic and is being promised by Amazon to offer 30 minute delivery timeframes.
There have however been noise complaints, so whilst the initial testing has been overall positive, there may be some regulation to come that will slow down adoption longer term.brocolli
Buy now pay later providers or delay pay mechanisms that have dominated retail in Australia in the last few years. This concept allows customers to buy online, and pay in instalments, thus delaying the overall cost whilst satisfying instant gratification.
In the 12 months to January 2019, 1.59 million Australians used one of the latest 'buy-now-pay-later' digital payment methods and has had a profound affect on online conversion rates, predominantly from the younger demographic. Millennials and Generation Z account for the lions share of users, with Millennials accounting for 40% and the Gen Z 35%,.
Afterpay and Zip pay currently are the most popular in Australia, with Afterpay having launched recently in the UK(under a different name). Visa has announced the launch of it’s own later this year.
Afterpay have created several online shopping events to boost usage throughout the year (AfterYAY) which have become new marks on the Australian retail calendar.
Aussie consumers feel like the brands they purchase from are an indirect reflection of their own values and beliefs. Therefore they want to purchase from brands that share the same standard of ethics they do,
The environment is of particular importance to Australians, with the Barrier Reef coral damage and decline, and widespread, regular drought devastating agriculture and the farming industry over the last five years the environment has a very personal pull on Australian consumers.
Six in ten (58%) Australians believe businesses have a responsibility to ensure their supply chain does not harm the environment. 57% believe businesses have a responsibility to ensure that their supply chain is free from harmful practices such as forced labour, the second highest figures in the APAC region. https://au.yougov.com/news/2018/01/04/businesses-and-environmental-damage/
31% of shoppers admit to not purchasing a product because of unaligned brand values and ethics. This number is on the rise, and its important that retailers selling to Australians can communicate their ethical stance, and demonstrate it within their product or proposition.
Also remember our population is getting younger, and it’s this generation than have the biggest concern for the environment.
Physical and mental well being is part of Australian lifestyle, we touched on it earlier. But it does factor into so many aspects of shopping and lifestyle, and where people spend their money.
Globally the demand for video is increasing. Australia is among the countries with the highest penetration of online video on mobile globally – 43% of online videos are being consumed on mobile devices. With the recent introduction of 5G mobile networks, we expect this figure to continue to grow.
This is demand is reflected in the continued increase in video advertising. Video now represent 40% of display inventory and video ad spend has increased by 26% cumulatively https://www.iabaustralia.com.au/news-and-updates/iab-press-releases/item/22-iab-press-releases/2660-video-and-native-underpin-continued-revenue-growth-for-digital-advertising
Most mobile video consumption happens through social media platforms, in particular in Australia, Facebook. Because of the context of the video consumption, it’s important to strike the balance between engaging content and communicating a sales proposition so consumers don’t feel their personal digital space has been invaded by retailers.
All of these things have had a direct effect on how the affiliate landscape now looks.
Food delivery services have boomed globally, but particularly resonates in Australia due to the number of independent food businesses that exist, and this becomes a convenient way for them to reach a wider audience than they would usually have access to. Revenue from this sector reached 1,681M USD last year, and 35% of that was via that growing population segment of 25-35 year olds. https://www.statista.com/outlook/374/107/online-food-delivery/australia#market-revenue
Health and nutrition, as we’ve spoken about is a huge an ongoing consumer trend in Australia. This category is expanding rapidly, and includes supplements, pills, and vitamins. And also speciality food categories such as vegan (Australia ranks number one in the world for online vegan searches), gluten free, and dairy free. There’s a link between nutrition and the environment too, as plant based goods (no dairy or meat) are associated with a more sustainable and environmentally friendly food source and supply chain, a topic which we know is also important to Australian consumers. https://www.peta.org.au/news/australia-ranks-number-one-in-the-world-for-vegan-searches-in-2018/ Activewear is also a big one, lots of local independent activewear brands, a lot are less fashion led general sports stores and more specific to particular sports. So for examples, a running store, or a yoga store.
Homeware is popular, $2B annually is spent on it for a few reasons: almost all rental properties come unfurnished, so there’s a demand for furniture, soft furnishings, bedding etc. This has also supported the growth of marketplaces, as people will often buy second hand on market places like gumtree, facebook marketplace. There’s also obviously a direct correlation with the housing market, which remains strong.
Travel – Australians love to travel, the most popular destinations for Aussies are: Bali, Indonesia and Thailand. 7.6% of an average Aussie income goes on travel. Also, the country is vast, and so getting to another city often requires a flight rather than a train (trainlines aren’t particularly plentiful) or driving, which can take days. https://www.budgetdirect.com.au/travel-insurance/research/average-holiday-cost-statistics-2019.html
Australia has always had a unique retail calendar, with reversed seasons to other English speaking nations. It has back to school in December and a major sales period in June to mark the end of the Australian financial year where most other financial years end in April.
What’s been interesting though is the increase in self-made shopping events. The main one unique to Australia being Click Frenzy, which happens on or close to the 15th November, and so directly pre cursers Cyber weekend. The event was created by one particular publisher called Click Frenzy who started the event. However this has become a nationwide on and offline flashsale shopping event in it’s own right as a direct halo effect from the main one.
Its become so successful that Click Frenzy have trademarked the term ‘click frenzy’ to prevent people monetizing it’s usage. The frenzy-related events have since expanded into specific verticals, with Travel Frenzy also running in February and August.
Also, peppered throughout the year are sales relating to BNPL providers, namely Afterpays AfterYAY events. They provide a boost in retail during historically slower months such as March and August. Whether Afterpay competitors will follow suit remains to be seen, however there’s no doubt these events have heightened the profile of the brands, and also pushed a lot more revenue through the service both on and offline.
Marketplaces in Australia grew nearly 75% per cent in the past year alone, according to data from Australia Post, and almost 70% of Australians visiting an online marketplace every single month https://www.netohq.com/blog/top-online-marketplaces-comparison
Amazon isn’t as dominant as other markets, which has allowed for competition to thrive.
Department stores are also dipping their toe in, with Myer recently launching their own too.
Another reason for the popularity of marketThe level of independent businesses in Australia also lends itself to marketplaces as they look to leverage the unified commerce advantages of selling at scale and utilising their operational advantages.
Numerous publishers have put forward card linking propositions in the last 24 months to close the online and offline loop with Australian consumers. It’s an important and growing trend given Australians tendency to still shop in store as a region.
Usually the proposition is cashback or point based, and enables the appropriate reward for offline purchases influenced by an online source.
This works by linking a card to an offer online, a purchase being made in store, the POS notifying the offer provider, the offer provider then applying the rewards and providing enough information securely to identify transactions to the networks who manually batch this in as commissionable to the UI.
This concept is still evolving and being adopted, however it’s being steadily adopted by large local retailers such as David Jones and Adairs.
Most widely spent currency in AU besides the AUD currency itself.
ZANE AND SOPHIE
High Growth • 53% of ad spend is digital, this has grown over 50% in the last year. Rapidly growing. • Spend on other channels means there is still much more growth left for digital
Omni Channel • offline still popular / good weather / lifestyle • multiple touch points
Early Adopters • payment methods • smart device adoption
Marketplaces • supports independent • no amazon domination
The Digital Revolution Down Under
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Working in Partnership
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How has the affiliate
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Australia in Stats
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age is 37.3
1 in 4
oversees. 1 in
2 have at least
90% of the
on coast. 78%
on the East
Y, Z and
85.7% of the
22% of the
over half of the
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Largest users of
Mobile handsets in
largest user of
1 in 10
Items will be
bought online by
of Australians still
prefer in store
of all ad spend is
Of all access
of Australians are
connected to the
active social media
of digital ad spend
is on mobile
of households are
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Independent Business Early Adopters HousingDigital Divide
1 2 3 4 5
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Consumer Trends And Habits
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which resonates with a
Delay pay mechanism
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How Has The Affiliate Landscape Been Shaped?
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Food delivery Health and nutrition TravelHomeware
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Self Created Shopping Events
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Card linked to associated offer online
Customer goes in store to purchase
POS notifies the offer provider to add offer to customer card
Enough information to securely identify a transaction is transferred back to the networks to
manually batch into the network UI
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Frequent flyer portals
And loyalty shopping
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High Growth Omni-ChannelEarly Adopters Marketplaces
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