What, where and how Aussies bought online in 2018
Drawing on billions of dollars of transaction data from its more than 3000 merchants, as well as retail industry partners Google, PayPal, eBay, Sendle and SmartrMail, Neto revealed that the vast majority of product categories saw significant year-on-year online sales growth in FY18.
Fashion saw the biggest sales boost during the period at 57 per cent year-on-year, and homewares, with 55 per cent year-on-year growth, came in a close second, followed by motor parts at 49 per cent. Total sales for Neto merchants across all categories increased on average by 30 per cent year-on-year.
Consumers also spent more per transaction in FY18, with average basket size increasing 5 per cent to $130. Consumers spent the most on food and alcohol and tools and hardware purchases in the year, while they increased their spending by the biggest margin on homewares and electronics purchases.
When it comes to how they paid, Aussies used PayPal for over half of all purchases transacted on Neto’s platform. They used credit cards, which include debit cards, for 39 per cent of online transactions, and buy now pay later (BNPL) options like Afterpay, ZipPay and Openpay for 7 per cent of transactions.
In addition, a third of all total online sales value came through marketplaces like eBay, Amazon and Catch, though this percentage will be much higher for some customers.
One of the most interesting findings, according to Murtagh, is the shifting peak buying period for online retail.
“Interestingly, the busiest time of year for our merchants was November—the beginning of the holiday season,” he said.
“This is more evidence of evolving consumer shopping behaviours with many Australians planning ahead to factor in delivery timeframes over the busy Christmas period. As ecommerce growth continues it will be interesting to see how, over time, this shopper behaviour impacts retailers staffing and trading hours in the traditional December ‘peak’ period.”
Growth by Retail Vertical
● Fashion experienced rapid growth with 57 per cent year-on-year sales growth and a 7 per cent increase in average basket size to $113. Payment methods are split PayPal 40 per cent, credit card 45 per cent and BNPL at 15 per cent.
● The value of the Homewares market in Australia currently sits at $1 billion and is booming with total sales growing by 55 per cent and its average basket size up 25 per cent to $138. Payment methods are split PayPal 50 per cent, credit card 44 per cent and BNPL at 6 per cent.
● Currently valued at $484 million in Australia, the online Motor Parts vertical is enjoying accelerated growth. Total sales for Neto merchants grew 49 per cent year-on-year and the value of transactions grew to $145, up 5 per cent from 2017. There was also a significant growth in the number of merchants at 37 per cent year-on-year. Payment method split is PayPal 72 per cent, credit card 23 per cent and BNPL 5 per cent.
● Health and Beauty had strong sales growth at 37 per cent year-on-year and a small jump in average basket size to $113, up 5 per cent from 2017. Payment methods split between PayPal 38 per cent, credit card 56 per cent and BNPL at 6 per cent.
● Pets and Animals overall sales jumped 35 per cent year-on-year, with Australia having one of the highest rates of pet ownership in the world. Payment methods split is PayPal 49 per cent, credit card 33 per cent and BNPL at 18 per cent.
● The Sports and Recreation vertical covers any exercise, sporting and fitness equipment, apparel and accessories, as well as camping and fishing goods. It’s worth $449 million in Australia and growing at 28 per cent for year-on-year sales with an average basket size of $143. Payment method split is PayPal 46 per cent, credit card 40 per cent and BNPL at 14 per cent.
● Gifting merchants had an average sales growth of 23 per cent year-on-year, with seasonal spikes due to gifting holidays and events such as Valentine’s Day, Mothers’ Day, Fathers’ Day and Christmas. Interestingly while overall volume of sales increased, average basket size decreased 8 per cent to $120. Payment method split is PayPal 26 per cent, credit card 69 per cent and BNPL at 5 per cent.
● Total sales for Neto merchants in the Electronics and Hi-Fi category grew 22 per cent year-on-year. Value of the overall market is $3 billion with the average Australian household having 17.1 devices. Basket size increased to $116, up 18 per cent, the second highest category for growth after Homewares. Payment method split is PayPal 67 per cent, credit card 30 per cent and BNPL 3 per cent.
● The Toys and Hobbies industry, consisting of a range of traditional games and toys, electronic toys, arts and craft products, and hobby equipment is currently worth $942 million in Australia, with e-commerce representing $70 million of that. Total sales for Neto merchants grew by a healthy 21 per cent, with a basket size of $117. Payment method split is PayPal 57 per cent, credit card 36 per cent and BNPL 7 per cent.
● Tools and Hardware reported another year of steady growth with total sales up 19 per cent year on year, and average monthly sales growing by 12 per cent. Tool and hardware purchases tend to be larger, more expensive items, and accordingly the average basket size of $162 was the second highest of all the verticals. Payment method split is PayPal 65 per cent, credit card 33 per cent and BNPL 2 per cent.
● Food and Alcohol has the highest average basket size of $168 and year-on-year sales growth of 14 per cent. Payment method split is PayPal 26 per cent, credit card 72 per cent and BNPL 2 per cent.
● Supplements and Nutrition was the only category to not grow in overall sales volumes year-on-year, falling 26 per cent. Payment method split is PayPal 76 per cent, credit card 20 per cent and BNPL 4 per cent.