Well duh, experience makes a difference

If you read up a newspaper recently you would have read that some fashion importers and wholesalers have stitched up deals to prevent Australian consumers buying goods cheaper on international websites and that consumers are up in arms.

Australian retailers should be concerned. Almost 50% of Australian shoppers appear to be focused on getting the best price regardless of location. The latest ACMA research report (http://engage.acma.gov.au/commsreport/e-commerce/) into online shopping in Australia, reported that the number of online shoppers buying mostly from overseas had jumped to 19%, and that 29% of shoppers buy from overseas and Australian retailers equally.

Some retailers have countered that they are being unfairly penalized by imported goods worth less than $1,000 avoiding the 10% GST they have to charge on all goods regardless of value. Myer even went as far as to open an online store based in Shenzhen to level the playing field with CEO Bernie Brooks saying “We just want a level playing field. We will take jobs offshore and we will ship product out of China through our internet site; it’s a bloody shame.”

I think the focus on price is too narrow and more retailers should be focusing on delivering what customers are asking for – value. That 53% of Australians buy from a website based in Australia is a massive opportunity for retailers. If they build it, the buyers will come. Australian consumers prefer buying from an Australian retailer if the price and service is right. They want free shipping, warranties, guarantees, a local number they can call, and the right product.

With online sales accounting for less than 5% of total retail sales the online boom is in its infancy. Australian retailers should embrace true multi-channel business models covering both bricks and clicks. Australian consumers have proven they have a keen appetite for value and are not afraid of going online to find it. They have also demonstrated that they are happy to pay more for good service. Australian businesses should invest in improving customer experience by updating their websites and training staff rather than locking customers out of importing cheap goods from overseas.

What do you think?